There are nearly six million SMEs in the UK, making up 99 percent of all businesses. To reach Net Zero by 2050 and limit global warming to 1.5°C, it is critical that small businesses are committed to climate action and taking bold steps to reduce their emissions.

Amazon and Planet Mark have teamed up to call on government to help smaller firms become more sustainable, including through the creation of a government-backed Net Zero Resource Hub for small and medium-sized enterprises (SMEs), to help them access funding and advice on calculating their emissions etc. Specifically the organisations make the following recommendations in their Recommendations for Supporting Small and Medium-Sized Enterprises (SMEs) on the Road to Net Zero report:

A Voice in Net Zero Policy

Sponsors

SMEs require a voice in Net Zero policy development which directly or indirectly affect them and the supply chains they are part of. Giving smaller firms more of a voice would offer them more control in how they comply with measurement or governance requirements related to Net Zero. The report also calls for these types of policies to be well-coordinated at regional and national levels to avoid confusion and reduce compliance complexity.

Roadmap for Progress

Clear timelines are needed for the development of SME emissions measurement requirements. Businesses would benefit from a clear plan on when SMEs would be required to report a minimum threshold of emission scopes – helping SMEs to prepare, as well as aiding larger businesses to plan their own Net Zero strategies and targets. Barriers to measurement also need to be removed, for example, making it mandatory for commercial landlords to share energy, water and waste data with tenants to allow them to calculate emissions and create reduction plans.

Financial Incentives

Looking at funding, Planet Mark and Amazon call for Net Zero regulation to be paired with financial incentives for SMEs. This would help businesses plan ahead, accelerate the deployment of low-carbon solutions and properly assess their upfront financing and resourcing needs and could be funded through green tax incentives. Funding should be made more easily available for innovative low-carbon products and services. For example, if a funded pilot project is successful, bridge-funding from both private and public sources is necessary to help these ideas scale commercially.

Partnering for Impact

Large organisations have an important role to play in supporting SMEs in their supply chains on their own decarbonisation journeys, and can better support smaller firms through provision of knowledge, financial support and guidance.