Half of smaller businesses owners in the London don’t understand how common environmental terms such as ‘net zero’, ‘carbon neutral’ and ‘zero footprint’ apply to their businesses, according to new research commissioned by the British Business Bank.
The Opinium survey of senior decision makers in smaller businesses in London found that half believe the language, terminology and information around emissions reduction is overcomplex.
The survey found three in five (61%) want information to help them assess whether reducing their carbon emissions make financial sense for their business and just over half (54%) want advice on how to measure their businesses’ carbon footprint.
The British Business Bank’s #GreenToGrow campaign, launching today, aims to demystify and alert smaller businesses to the commercial benefits of investing in decarbonisation. Resources include a new ‘Green Decoder’, an online guide co-created with Nottingham Business School, Nottingham Trent University to help smaller businesses decipher the terminology surrounding decarbonisation.
The British Business Bank’s online Finance Hub also provides a series of guides and information about sustainability issues and how smaller businesses can start their journey towards net zero.
‘Carbon jargon’ terms misunderstood in London include:
- Greenhouse Gas emissions: 88% of smaller businesses do not have a full understanding of the term and what it means for their business
- Decarbonisation: 81%
- Net Zero: 66%
- Carbon neutral: 69%
- Carbon footprint: 61%
Steve Conibear, UK Network Director, South and East of England at British Business Bank, said: “Smaller businesses are far too often put off by the overcomplex ‘carbon jargon’ that comes with reducing emissions. By helping decipher some of the terminology around decarbonisation the British Business Bank hopes to show smaller businesses that simple, incremental changes, such as switching off equipment when not in use can make a difference in their net zero transition.
“This will become an increasingly important businesses requirement. Given that many consumers now consider sustainability when they make a purchase, by becoming greener, smaller businesses can enhance their competitive edge and expand their customer base.
“Our new mission at the Bank is to continue to drive sustainable growth across the UK, and to enable the transition to a net zero economy, by improving access to finance for smaller businesses. This new #GreenToGrow campaign will help more businesses in London find the information they need to move toward transition.”
Dr Muhammad Mazhar, Senior Lecturer in Sustainability, Nottingham Business School, Nottingham Trent University said, “Smaller businesses are key to our economy and have significant carbon emissions impact. They can act as agents for change to meet the UK government’s net zero targets. Most smaller businesses are at the initial stage of their carbon management journey and will benefit from the support provided through the British Business Bank’s #GreenToGrow campaign. Smaller businesses have been overlooked in the past and this is changing. The business case for carbon management is stronger than ever and smaller businesses have an opportunity to act now to remain competitive.”
Smaller businesses have a big role to play
The British Business Bank’s Smaller businesses and the transition to net zero report, published in October 2021, found that smaller businesses account for half (50%) of total emissions from UK businesses. Two in five in London (43%) believe, however, that a reduction in their carbon emissions will not make a significant difference to the environment and over three in four (76%) believe large corporations are responsible for most of the business carbon emissions in the UK.
Finance as an enabler to ‘net zero’ transition
Just one in twenty (5%) of smaller businesses say reducing their carbon footprint and environmental impact is their number one priority for 2022. The Smaller businesses and the transition to net zero report also found that more than a third (35%) cited costs as a barrier for reducing their carbon emissions, particularly upfront capital costs (21%).
So far, 11% of the smaller business population – equating to around 700,000 businesses in the UK – have accessed external finance, in the form of loans or equity, to support ‘Net Zero’ actions, with 22% – equivalent to around 1.3 million businesses – saying they are prepared to access external finance to support ‘Net Zero’ actions in the next five years.