What does COP 26 mean for small and medium Essex businesses and climate change?
The world converged on Glasgow recently to discuss climate change and the various pledges being made in order to protect the planet. Whilst the environment clearly affects us all, what do any of these discussions mean for climate change for small and medium businesses (SMEs) here in Essex? Decisions made at COP26 will have an impact on SMEs, even though they are barely represented in the discussions.
What is expected of SMEs?
The Department of Business, Energy and Industrial Strategy (BEIS) has been encouraging SMEs to look at their environmental impact. Essex businesses could do some of the following to help with climate change:
- Pledge to reduce their environmental impact
- Increase sustainability
- Cut carbon emissions
BEIS has asked businesses of up to 250 employees to join the UK Business Climate Hub to commit to reduce carbon emissions by 50% by 2030 and to reach “net-zero” by 2050. The UK is in fact the first major economy to legislate that this target will be attained.
The Federation of Small Businesses (FSB) has published a report on climate change and SMEs. It is estimated that UK SMEs account for almost a third of all UK greenhouse gas emissions. What is clear is that SMEs will be expected to proactively take steps to play their part in meeting governmental targets.
Who pays for the improvements?
While many businesses may wish to reduce their environmental impact, the capital investment required is often beyond their. This is especially true as they slowly emerge from the COVID pandemic and the economic impact on their business.
The FSB report notes that over half the small businesses it surveyed said that grants or low interest loans would be a strong incentive to become more energy efficient. Just less than a third said a discount on business rates would also encourage them to pursue greater environmental efficiency.
It is clear that SMEs are hoping that COP26 will lead to greater financial support to help them. Many are concerned that small businesses will bear the burden of climate costs in order to keep up with the policies heralded by global corporations who have greater access to resources and the flexibility to be sustainable.
Some commentators argue there are opportunities for financial growth by using innovative products and ideas to overcome environmental issues. These could attract outside investment, by consumers and potential employees actively seeking to align themselves with SMEs with “green credentials”.
What are the action steps?
It is clear then that SMEs cannot afford to ignore this move towards sustainability and net zero. SMEs can take simple steps now to increase energy efficiency, for example, which may lead to savings on energy bills in the short term. There are also marketing and PR opportunities for SMEs to advertise their green credentials which can lead to new customers and enlarged reach.
How can we help?
TSP is a Legal 500 Leading Firm with its Corporate and Commercial Team being recommended. Team leader Mary Anne Fedeyko is highlighted as a Leading Individual. If we can assist with questions you may have about your business, please contact the team.
- Email: info@tsplegal.com
- Phone: 01206 574431