Net Zero Targets Jeopardise SME Future

There is a very real threat to SMEs that they could lose sales and contracts from larger businesses, as bigger organisations look to deal with net zero compliant only firms.

A mere 3% of SMEs have measured their carbon footprint in the last 5 years, British Business Bank has revealed, and so, emission lowering targets are not being set or met. 

Companies the world over are now making a conscious effort to be greener. This not only includes their own emissions and responsibilities but also affecting the contracts they have with smaller companies, running right down through supply chains – where many SMEs come in.

Certainly, with this week’s UN climate change conference, Cop26, being hosted in Glasgow currently, this threat is even more real, at the forefront of big business’s mind, and dangerous to the future of SMEs.

Perhaps your SME does not deal with large corporations and therefore net zero is not a top priority?  However, the chances are you are involved in supply chains with big businesses at the top.  They will start making demands of that chain; thus, you will need to act, and fast or risk losing contracts.  As Chief Impact Officer for the British Business Bank, Shanika Amarasekara, warns, “What’s going to happen in the future is that they (SMEs) will be part of supply chains of larger businesses that are going to be making those demands.”

The threat is that it will be necessary for smaller businesses to prove they are actively reducing their carbon footprint to hold onto or secure new contracts. 

Shanika continues, “It’s becoming a license to operate.  It is going to become the competitive differentiator for smaller businesses.” 

Of course, much of this net zero commitment comes at a price.  However, there are some tailored, SME finance deals to help you meet this demand, to protect not only our planet but the future of your business too. 

Extremely reasonable business finance is available to help you upgrade to greener, more environmentally friendly operations.   And when it’s arranged through my team and I, here at Capital Corporate Finance, it is arranged faster and at better rates than going direct. 

What’s more, with access to the entire UK lending market – as we are an independent broker - we can approach more lenders than you are probably aware even exist – traditional options, dynamic lenders, alternative finance and multifaceted solutions.

As the British Business Bank has discovered, more than half of SMEs are not ready to prioritise their carbon emissions, even though SMEs are responsible for just under a third of the UK’s greenhouse gasses. Yet, some SMEs are making the move – with 11% already having committed to finance to help them, with another 22% seriously considering their financial options.

It’s time to think about your tomorrows today – so call me, Carole Roe, Founder and Managing Director, of Capital Corporate Finance on 07785 596053 or email me on carole@capitalcorporate.co.uk.