The net zero confidence gap: Two-thirds of UK SMEs struggle with sustainable pathways

The recent net-zero barometer by BSI reveals significant findings after surveying 1,000 senior decision-makers from small and medium-sized enterprises (SMEs).

The study found that awareness of the significance of transitioning to net-zero is at an all-time high, with 82% of respondents acknowledging the importance of setting and achieving net-zero targets – three times the number who agreed in 2020. However, an awareness-action gap was also discovered.

Many SMEs have already addressed easy-to-implement measures such as reducing waste (44%) and installing energy-efficient lighting (38%), while only 17% reported having made no significant changes to enhance sustainability.

Despite these efforts, the survey found that 50% of SMEs still lack a net-zero plan or policy, and a mere one-fifth of these businesses measure and report progress in reducing emissions using standardized methods. This indicates that numerous companies have not yet integrated the net-zero transition into their strategic planning, even as customers and investors increasingly demand it.

BSI identified the primary obstacle for SMEs in developing and executing a credible net-zero plan:

The need to allocate resources to address the cost-of-living crisis
Increases in energy prices

As a result, only one-third of the surveyed SMEs expressed extreme confidence in achieving net-zero, citing challenges such as insufficient government support and the desire to avoid greenwashing.

BSI's director-general of standards, Scott Steedman, explained that SMEs need guidance to develop a credible and realistic path amidst economic pressures. By understanding their current position and the implications of the transition for them and their stakeholders, SMEs can benefit from having a comprehensive roadmap for achieving net-zero in their operations and supply chains. Steedman emphasized that with appropriate guidance, including the use of standards, SMEs are well-equipped to meet this challenge.