The environmental portion of Environmental, Social and Corporate Governance (ESG) has many challenges for UK businesses, not least for those SMEs looking for a route to net zero. The government has set the midpoint of this century as the target for the UK reaching net zero. It says that SMEs are often keen to tackle climate change but find it difficult to know how to reduce their carbon footprint.
The net zero challenge ties in with meeting the E of ESG, which assesses how firms perform as a steward of nature, and how they utilise natural resources in the course of doing business. Now the government is helping SMEs with finding the relevant advice and support by launching the UK Business Climate Hub.
Collaborating across the Hub
The UK Business Climate Hub is a collaboration between the UK government, businesses and business groups across the UK. It includes a free carbon calculator and a suite of new tools to help businesses measure, track and report on their emissions.
It also offers detailed advice on environmental topics, including sourcing products from green suppliers and reducing emissions from freight and logistics, as well as the most cost-effective ways of installing solar panels and electric vehicle (EV) charging points.
Minister of State for Energy Security and Net Zero, Graham Stuart, said: ‘The UK has cut its emissions more than any other major economy in the world. More and more businesses are recognising the business benefits of reaching net zero and we’re determined to empower them to do so.
‘The new UK Business Climate Hub is a one-stop-shop for businesses to find practical advice to reduce their carbon footprint and save on their energy bills.
‘Whether it’s fitting a low-carbon heat pump, generating energy with solar panels, or reducing the emissions from shipping goods, the new support will ensure businesses can drive towards net zero.’
Research shows that such measures can significantly save companies on their overheads. For example:
- Switching to EVs can not only cut running costs but also lower servicing and maintenance costs by around 40% compared to petrol or diesel cars.
- With up to half of companies’ overall electricity bill coming from lighting, making changes such as switching to LED bulbs can help shave up to 40% off bills.
- Giving drivers fuel efficiency training can aid companies in saving an average of 15% on fuel use and carbon emissions in transporting goods.
- Generating green energy with a wind turbine and selling it back to the grid.
£40 billion green economy
In 2020 the UK was estimated to already have over 400,000 jobs in low carbon businesses and their supply chains across the country, with turnover at £41.6 billion. Over 80,000 green jobs are currently being supported or are in the pipeline because of new government policies since 2020, with that expected to increase to as many as nearly half a million by 2030.
However, in order to reach the net zero target, every business in every sector will need a clear plan. That’s why the government hopes the UK Business Climate Hub will be a valuable tool for business leaders looking for guidance and support in this process.
Seven steps to sustainability
Finding the right path to net zero may appear daunting, but the government recommends seven simple steps that can start your journey today.
- Understand the basics - find out everything you need to know about what net zero means and why it matters.
- Involve your team - get staff positively engaged and bring in external support to reinforce your plan.
- Make the SME Climate Commitment - make a commitment to climate action, access tools to reduce emissions and disclose your progress.
- Make a plan - measure your current carbon emissions and start to plan to reduce them.
- Take action - take steps to reduce your emissions by theme or by sector.
- Find finance and support - find sources of funding and support on green loans, grants and other incentives.
- Look beyond your own business - get product certifications and labels, build a green supply chain, reduce business travel and more actions to reduce emissions.
How Mercia can help
The drive to net zero and related ESG issues open up new opportunities for accountancy firms.
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