Small Businesses Lead the Change on Net Zero

UK small businesses are out-performing their larger peers by making the environment a priority amidst the global emergency on climate change – with nine in ten (89%) small business owners actively working towards net zero.

At a time when climate groups have called out major corporations on net zero promises – and when the UK Government has come under scrutiny for not having planned the ‘means’ for which to achieve the ‘ends’ on Cop26 net zero targets – UK small businesses are steaming ahead in figuring out the means for themselves; by working on climate plans today, rather than pushing targets further into the future.

New research from Novuna Business Finance has found that, encouragingly, more than one in ten small businesses (13%) believed that they are already operating at new zero. A further 31% have a net zero plan in place and are working towards it, while 45% of enterprises are taking steps towards carbon reduction.

Further, the action taken – or being taken – suggests that small businesses are being responsive to their staff and customers who are increasingly demanding climate action. Small business leaders said their staff have been net zero advocates on: adopting car sharing (16%), reducing business travel (15%), repurposing rather than throwing away (13%) and recycling (11%). While pressure from customers has focused attention on using less packaging (12%), re-evaluating the sustainability of suppliers (10%), using less plastic (9%) and putting the case forward for electric vehicles (7%).

These findings suggest that the closer the connection smaller enterprises have with their customers and staff (combined with their size), the better positioned they are to respond to climate change and sustainability issues more generally.

In addition to listening to customers and staff, small business owners are also willing to accept responsibility for driving positive action. When asked who starts the change on net zero,  38% of respondents said they can be the change in their supply chain and influence the behaviour of others. A further 27% of small businesses said individuals within the business needed support in taking positive action at work and at home. Whilst 27% did feel that Government and big business should be leading change for society and 19% would like more support from Government, the majority of smaller enterprises are getting on working towards net zero (89%).

Industry sectors where small business is already net zero:
Legal                                                  20%
Hospitality and leisure                       19%
Real estate                                        18%
Construction                                      16%

Industry sectors where small businesses have net zero plans in place:
Media and marketing                       45%
Manufacturing                                  39%
Medical/health + IT telecoms           36%
Finance and accounting                   34%

Jo Morris, Head of Insight at Novuna Business Finance commented: “We know from years of working together and through the extensive research we have done, that the UK small business community is an incredibly resilient bunch. Though the climate crisis is a daunting prospect for us all, it is so encouraging to see the action being taken within the community to implement change. Having been reliant on fossil fuels in industry and at home for so long, this move to net zero is a really challenging one for many of us all over the world – and the recent heatwave has only brought further urgency to the need for us all to adapt new planet-positive approaches to life and business.

“With extreme weather now affecting communities all over the world, there really is no time like the present. We all still have a long way to go on the journey to net zero, but it is becoming apparent that there is much to learn from the UK small business community who have already started creating ripples that will continue to drive change”.