Net Zero: An ambitious goal set by the UK government to completely eliminate greenhouse gas emissions by 2050. In fact, it’s not just a goal. It’s a legally binding commitment laid out by the Climate Change Act 2008 (2050 Target Amendment) Order 2019.
According to the regulations, all businesses, companies, and organisations must cut emissions by 100% and that includes SMEs.
Net zero targets are particularly significant for SMEs because they produce 67% of the UK’s greenhouse gas emissions. This is because, despite the best intentions, the current business climate makes it difficult for SMEs to implement carbon reduction strategies, let alone achieve marked results.
There are many reasons behind the struggle, but there are also net zero opportunities for SMEs to not only catch up with larger enterprises, but to take the lead in green public procurement.
Let’s look at the net zero challenges SMEs face and how they can turn them into advantages.
Net Zero And SME Sustainability
We’ll start with carbon neutral vs. net zero.
- Carbon neutral: Offset carbon emissions produced, for example, solar panels on the roof to make up for suppliers that don’t use recycled or recyclable packaging material.
- Net zero: Cut carbon emissions until they’re all gone.
Carbon-neutral goals are easier to achieve and sustain than net-zero targets.
However, carbon-neutral initiatives don’t necessarily entirely offset carbon dioxide production. They’re a good start, but SMEs must take the next steps towards perfect zero emissions and that requires a net zero business strategy.
How Does Net Zero Benefit SMEs
The long-term benefits of reducing emissions are enormous. Who doesn’t want lower operational costs, a growing customer base, a sustainable supply chain, competitive advantage, and – significantly- tax benefits?
The problem is that it’s difficult to see the benefits of net zero strategies when the current financial climate prioritises things like salaries, wages, utilities, and other overheads.
As is often the case, you need money to save money.
Fortunately, carbon-neutral efforts can be used as stepping stones to reach net zero emissions, so SMEs with recycling and waste reduction procedures and policies are already a good way down the path to the government’s goal.
SMEs in public sector procurement also have environment-based social value projects in place, which gives them an even greater start than companies without proper social value programmes.
SMEs can also boost their net zero efforts by choosing suppliers that are on their way to business operations that are 100% carbon emission-free. A green supply chain makes you look good too, and can potentially give you a competitive advantage when bidding on government tenders.
The UK Government, Public Sector, SMEs & Net Zero
The GoZero report from the UK Energy Research Centre shines a light on the challenges SMEs face on their net zero journey, and how the Government can provide the assistance they need to succeed.
The government must provide the same going-green incentives to SMEs as they do to larger businesses, including subsidies for low-energy lighting (LED) and the adoption of renewable energy (solar).
Government bodies and other stakeholders must focus on support through initiatives like the UK Business Climate Hub. The Hub is actually a partner in the global SME Climate Hub initiative, which enables SMEs to take charge of and commit to climate action strategies.
Assistance includes tracking carbon emissions, sourcing products from green suppliers to keep their supply chain green, cost savings for EVs (Electric Vehicles), and generating enough green energy to sell back to the national grid.
Empowered SMEs
SMEs that are empowered net zero-wise have several opportunities to lead the public sector on the journey to reduce emissions by 100%.
What do empowered SMEs do?
1) They network
Healthy networks are part of public procurement, anyway, but now criteria must include green and energy efficient operations. Skilled networkers are worth their weight in gold, here. Not only do they network on their company’s behalf, but they can also be a bridge between two or more other industry players.
2) They innovate
Necessity is the mother of invention, right? Competition for contracts in the public sector drives innovation. All SMEs need to do is adjust their focus so that the solutions they come up with are green.
3) They multiply
SMEs make up 99% of businesses in the UK. They are everywhere and with their social value initiatives, they can make a real difference on the ground. For example, introduce and maintain low-carbon lifestyles to people in their local communities and other businesses in the area.
Their innovation (services, products, technology) and networking can really come into play here. This is a great advantage over larger enterprises that are restricted by approval policies and broader social value projects that have an impact on the macro-level.
Government support
SMEs can’t ring in the changes on their own. They need the government to step in and set a foundation to make it all possible.
To start with, the public sector can get a chivvy on so SMEs have access to advanced technology and systems that streamline the green-going process and help them reduce emissions.
Technology is great but it’s still not enough support for SMEs to reach their full potential.
They need to learn how to incorporate all their practical advantages into business models and best practices. It requires a change in mindset and that might require assistance from a business or transition coach to successfully manage the switch. Training opportunities like this should be subsidised or incentivised to encourage SMEs to develop and implement net zero strategies.
Without support like this, cutting carbon emissions might still be too big an ask of SMEs in public procurement.
ISO Net Zero Guidelines
The International Organisation for Standardisation (ISO) has set global net zero guidelines for ISO certifications. The guidelines for sustainability certification include high-level principles and actionable guidance.
For example, when it comes to global greenhouse gas emissions, ISO covers switching to renewable energy sources and low-carbon products. It also covers carbon offsetting, identifying areas for improvement, tracking progress, and stakeholder engagement.
The net-zero guidelines work with the ISO 14000 environmental standards, including ISO 14090: Adaptation to climate change, ISO 14064-1: Greenhouse gasses, and ISO 14068-1: Climate change management.
Practically-speaking
This boils down to things like clearly communicating sustainability requirements for suppliers, keeping lines of communication open to capitalise on collaboration opportunities, and rethinking packaging material and logistics.
Find Public Sector Tenders With Supply2Gov
We’ve seen that SMEs can turn challenges into opportunities and take the lead in the UK’s drive to achieve net zero by 2050. Supply2Gov (S2G) helps you complete the process by providing you with an ongoing, updated list of government tenders in your field of expertise – so you can reach your target audience in its target area.
We also supply a selection of support services and resources to help you navigate public procurement successfully, especially when using your green credentials to good effect.
Contact us now to find out more about contracts and opportunities in the public sector that enable you to increase your share of the marketplace.