Net Zero for Small Business

Net zero for Small Business

As a Small or Micro Business, we need to minimise our environmental impact and we have a vital role to play in helping the UK achieve its Net Zero Target. Yet it can seem overwhelming and be hard to know where to start, so we are sharing this blog from the Federation Of Small Businesses which explains how we can make a difference and some of the things we can do.

Author: Federation of Small Businesses

Empowering small businesses on the journey to net-zero

Setting up and running a small business requires entrepreneurs to think outside the box, take on new challenges, and face issues that had not been apparent when scoping out the original business plan. Whilst small businesses have been asked to tackle a number of such challenges over the decades, none are more threatening than the impact of climate change. However, in the face of many competing priorities, taking action on sustainability has been a ‘nice to do’ challenge for small businesses, who often find themselves cash-, resource- and most importantly time-poor. Now, however, with increased levels of environmental awareness and the pressing need to reduce our impact on the environment before it’s too late, this is no longer a ‘nice to do’, but a ‘need to do’.

The consequences of not acting on climate change are well-documented, and meeting this challenge will require the efforts of every part of society, including small businesses. Governments across the UK have set the key target of achieving net-zero by 2050, or 2045 in Scotland, as well as a number of milestones along the way, such as gas boiler and diesel vehicles, bans in coming years.

Recognising their role in combating climate change, small businesses themselves are already taking action to mitigate their impact on the environment. From the installation of basic measures such as LED lighting, through to becoming fully self-sufficient microgenerators, small businesses are as varied and as creative as ever in their drive to reach net zero.

If the UK is to reach its net-zero targets, then we must establish a net-zero economy. However, to create a net-zero economy across the UK, small businesses once again will have to go further and do more. Yet they will only be able to do this if they have adequate support from governments across the UK, and their local authorities. Too often, mixed and poorly-targeted messaging in an already confusing landscape has undermined both the environmental and economic benefits of some of these changes to small businesses. A “one size fits all” approach to messaging, or policy will no longer suffice.

The policy framework must provide the necessary incentives, and overcome the barriers that small businesses face. We can no longer afford to be taxing businesses for making environmental improvements such as installing solar panels on their building through increased business rates, and we must enable them to invest in the environmental and economic improvements that most suit their business. Zero-emission vehicles (ZEVs) and changing transport habits are also undoubtedly critical to achieving net-zero, and while the uptake of these options is encouraging, upfront cost and infrastructure are still significant barriers to most day-to-day businesses.

Government must also face up to the reality that a total switch to ZEVs without changes to our taxation system with leave a huge hole in our public finances, and it must be honest with businesses and those switching as to how that will be met. Whilst we must do all we can to encourage businesses to switch to ZEVs by 2030, we must also have a frank conversation about the future of vehicle taxation and replacing the lost revenue from fuel and Vehicle Excise Duty.

There are many steps that governments across the UK can take and barriers that must be removed. Our report looks at the great strides business have already made in the net-zero journey, and importantly identifies where policymakers must do their part to enable small businesses to reach net zero.

Key Findings

Climate change and small businesses

56 per cent of small businesses believe our planet is facing a climate crisis

28 per cent of small businesses said it will be extremely difficult to transition to a net-zero economy

36 per cent of small businesses have a plan to combat climate change, but only 30 per cent have made changes to their business as a result of that plan.

69 per cent of small businesses don’t know how to measure how much carbon emissions their business produces.


67 per cent of small businesses have taken steps to address their energy usage, some of which include:

Installing a smart meter (22%)

Installing energy-efficient appliances (37%)

Switching to a renewable energy provider/tariff (26%)

18 per cent of small businesses have invested in microgeneration.

14 per cent have installed solar panels

4 per cent have installed a heat pump

Of those that have not yet taken steps to address their energy usage, 29 per cent of small businesses say energy is not a significant cost, 24 per cent say that the return on investment takes too long or is too uncertain, and 22 per cent highlight the lack of capital (savings) as a reason why they are unable to invest.

Actions to reduce waste and increase recycling

Small businesses have taken a number of steps to increase recycling and to reduce waste, including:

64 per cent have increased recycling in their business

50 per cent have taken steps to eliminate waste wherever possible

47 per cent are avoiding plastic products if an alternative is available

Changing small business transport habits

36 per cent of small businesses in accommodation and food services state they have switched or plan to switch all or some of their fleet to zero-emission vehicles

29 per cent of small businesses in the construction sector state they have installed a workplace charging point for electric vehicles

Of those small businesses which have not yet taken steps on their transport habits, some of the key barriers are:

Inefficient or unavailable public transport due to location (45%)

Zero-emission vehicles are currently too expensive (57%)

Lack of infrastructure to support electric vehicles (43%)

Check out the full article and find further resources here