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Almost a third of small and medium firms in the U.K. have no plans to implement a sustainability strategy, despite a government commitment to achieve net zero carbon emissions by 2050, according to new industry research.
A survey of 1,021 firms, conducted by YouGov for energy firm World Kinect Energy Services, found that while 40% of U.K. small and medium enterprises (SMEs) don’t yet have a sustainability plan in place, 30% don’t have any intention of adopting one.
That contrasts with 53% of SMEs who have plans in place to comply with 2050 emissions targets. But only 34% of firms said they had actually achieved any of their sustainability goals. Meanwhile, more than a quarter of the firms surveyed said the coronavirus pandemic had affected their plans to adopt more sustainable measures.
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“While it is alarming that nearly 40% of SMEs in the UK do not have a sustainability plan in place, it is even more alarming that 30% of firms do not intend to develop a sustainability strategy whatsoever,” said Therese Gjerde, World Kinect’s senior director of global sustainability. “SMEs are often perceived by both themselves and the public as small and therefore not so relevant in this context, but collectively they represent a large group and a significant emitter and to this end, they need to be an integral part of the net-zero transition.”
At the start of 2020, Britain had 5.94 million small firms, defined has having 49 or fewer employees. Small firms make up 99.3% of private sector businesses in Britain, and SMEs have been estimated to account for 45% of the country’s business energy use.
The survey indicated that 29% of SMEs see the coronavirus pandemic as a barrier to progress on sustainability goals, with many companies focusing on financial survival during an economic downturn of historic proportions. Some 47% of SMEs in manufacturing and hospitality said financial concerns were a barrier to more sustainable practices, while 58% of respondents from the hospitality sector said they had had to shelve sustainability plans in the face of the pandemic.
The findings seem to highlight a disparity between ambition and reality on sustainability in British business. In a survey of U.K. businesses last year, the Enterprise Trust think tank found almost two thirds (61%) of firms thought the move to a greener economy presented “positive opportunities.” Only 8% of respondents disagreed.
Beverley Cornaby, senior programme manager for The Prince of Wales’s Corporate Leaders Group at the Cambridge Institute for Sustainability Leadership, told Forbes.com that firms which aren’t proactive on sustainability were in danger of being left behind.
“It is hard to imagine a business decision that won’t be affected by sustainability, to some extent,” Cornaby said. “Companies that build trust with their customers based on bona fide sustainability credentials are likely to be more resilient as a result.”
Making the business case for sustainability, Cornaby pointed out that emerging supply chain and investment rules will mean companies small and large will ultimately have to comply with sustainability requirements.
“Increasingly, SMEs who want to supply to multinational corporations will have to compete on sustainability, and even finance providers and investors will increasingly require information on sustainability performance,” she said. But she added that such requirements presented a carrot, as well as a stick, to SMEs. “Sustainability will help unlock new opportunities for businesses who find ways to engage a new generation of consumers wanting products and services that are ethical and seeking brands they can trust,” she said.
With businesses confronting the twin pressures of coronavirus and a Brexit process that has thrown British trade into turmoil, Cornaby said it was vital that the U.K. government should support SMEs in developing and implementing practical sustainability plans.
“Policymakers should see these findings as an opportunity to identify the type of support SMEs need from government,” she said, suggesting the development of a national SME net zero strategy to engage firms on a transition to net zero. “It is essential the government supports SMEs to make sustainability work for them and not become yet another challenge.”