SMEs Overlooked at COP26 – But There’s No Net Zero Without Them

Date: November 29, 2021

What a disappointment Cop26 was.


There was a rather bitter taste left in people’s mouths by the climate conference — and it can only have been coal.


Despite valiant efforts to paint a rosy picture of the agreed text, the reluctance by some nations to agree to ‘phase out’ rather than ‘phase down’ coal was an open wound in diplomacy terms.


China, Australia and India had continued to object to what, by then, had already become a watered down pledge originally intended to close the book on this fossil fuel sooner rather than later.


Tensions were running high. It’s not every day you see a government minister fighting back tears, as COP26 president Alok Sharma did as the second-rate deal was agreed. It was hard not to feel sorry for him. He looked like a man who truly, genuinely cared.


By the time the conference was over, lots of intentions had been aired, big business had been made to feel good about itself again and there had been lots of talk of private finance riding to the rescue. But SMEs were still left scratching their heads again.


In the run up to the conference hopes among small businesses had been high.


The FSB declared that SMEs were hoping Cop26 would deliver financial support to help them get to net zero. They were left disappointed. Its report said 56% of these firms were concerned about climate change but only a third of them had a plan to do something about it. Of those that hadn’t taken action, around a quarter said they were concerned about the return on investment. The affordability problem remains.


Indeed, there was no mention of SMEs or small businesses in the COP26 text at all. There’s been no significant announcement that directly addresses SMEs since delegates returned home either. Why not?


In a country where 6million SMEs make up 99% of UK enterprises and emit an estimated 43 to 53% of business-driven greenhouse gas emissions (British Business Bank), why the blindspot?


Big business has had the run of play when it comes to announcements but the UK clearly can’t get to net zero without small businesses.


All SMEs have seen is posturing so far. In May, Prime Minister Boris Johnson and Business and Energy Secretary Kwasi Kwarteng urged small businesses to “lead the way”.


The Government’s Together for our Planet ‘Business Climate Leaders’ campaign “encourages small businesses to pledge to cut their emissions to net zero by 2050 or sooner while helping them grow, adapt and seize new opportunities”.


Its website is big on advice but doesn’t address the financial pain SMEs face in fulfilling their commitments. It features a list of things that will all cost small businesses money — lots of money in many cases.


But getting to net zero by 2050 is already a legal requirement for SMEs, not that you’d realise it from the campaign literature. This is the carrot. Later will come the stick. And when it does, the fear is that it will inevitably prove extremely expensive for those businesses that can least afford it.


Green investment funds, grants that don’t amount to much in percentage terms when switching to electric commercial vehicles and loans for sustainable improvements are all well and good.


But SMEs don’t want to feel like the road to net zero is a chance for big business to ride them and make profit while they do the right thing. We’ve got to do better than that.

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