The six key questions about going net zero as an SME
This crucial move not only helps in the fight against climate change, it can also provide benefits for your business. We take a closer look
What is ‘net zero’? It has become a buzz phrase, but there are many misconceptions around it. As an SME owner, confusion about this topic can delay the essential actions you can take to help tackle global warming and future-proof your business.
Here, we answer six key questions about going net zero.
What does net zero mean?
For some, the first barrier to going net zero is understanding exactly what it is.
Net zero means not contributing to a net increase in greenhouse gases (GHG) in the atmosphere. The goal is that the total GHG emissions produced are counterbalanced by the removal of GHG from the atmosphere. You can contribute to this objective by cutting your company’s GHG emissions, say by switching to cleaner energy sources; and removing GHG from the air, for example, by planting trees.
Net zero is often confused with the phrase ‘carbon neutral’. The former addresses all GHGs – including methane, nitrous oxide and hydrofluorocarbons – in addition to carbon dioxide. So it’s a much more comprehensive target, and a crucial one, given that methane, for example, has a 20-year global-warming potential that is up to 86 times that of carbon dioxide.1
Is going net zero expensive?
Some SME owners may fear going net zero could dent their profits because of the upfront costs involved – for example, in switching to electric-vehicle fleets. But, as Mark Carney, former Governor of the Bank of England, has said: “Companies that don’t adapt will go bankrupt, without question.”
Going net zero will make you more resilient and cost-effective, ensuring your long-term viability. Shamanth Pereira, Founder of high-performance hygiene and cleaning brand Something Co, says: “The first misconception about achieving net zero is that it’s costly. On the contrary, it allows you to future-proof your business. For example, the European energy crisis has demonstrated the implications of over-reliance on fossil fuels.”
Besides, there are many ways to go net zero that bring relatively quick wins in energy efficiency, such as insulating your office.
Shouldn’t we focus more on pressing short-term problems?
SMEs certainly face many more immediate challenges. But climate change is the biggest threat we all face. Many countries and companies have set targets to achieve net zero by 2050 because it takes time to wean society off its fossil-fuel habit developed over many decades. It also takes time to fund and build the necessary infrastructure.
Peak performance strategist Abigail Ireland, Co-founder of the Third Planet Collective movement, says: “Psychologically, 30 years is too far off for us to feel a personal and urgent connection. We might think we can wait to cut GHG on the assumption that we can accelerate their removal later, when innovation will make it easier. That risks even greater atmospheric pollution, making the task even harder. Climate change is already having catastrophic effects and we need to act today.”
Chris Marais, Head of Content at St. James’s Place, says that one way to overcome the timing challenge is to set interim targets. “At SJP, operations have been net zero since 2018,” he says. “Our next target is to be climate positive by 2025. For our partners and supply chain, we have a net-zero target of 2035, and for our investments, it’s 2050.”
Is it all greenwashing?
Some businesses fear going net zero can lead to negative perceptions because of cynicism among the public about greenwashing – in other words, overstating sustainability credentials. But a genuine intention to move towards net zero will pay dividends by demonstrating commitment, accountability, forward-thinking and purpose beyond profit.
Abigail says: “Don’t jump on the bandwagon – believe in the individual, business and societal impact of acting in a pro-planetary way. Align what you say and do and make it flow through your communications, values, employee behaviours and ways of working. Demonstrating authentic behaviours will enhance your reputation, and engagement with staff, customers, suppliers and investors.”
Will going net zero make a difference?
Climate-change challenges can seem overwhelming. No one can solve the problem alone – but we need to recognise that everyone needs to play their part to avert its worst impacts. What’s more, going net zero presents huge opportunities for you to make a bold mark and enhance the reputation of your business.
Chris says: “Becoming net zero is non-negotiable. Becoming financially secure is only worthwhile if we have a healthy and sustainable world in which to enjoy it.”
How can I become a net-zero business?
There are many simple actions you can take to start your journey towards net zero, by calculating your emissions and taking steps to reduce them. You can start with tools like those at Zero Carbon Business, SME Climate Hub and the Science Based Targets initiative.
At SJP, we’ve found that splitting our targets in different parts of the business – such as operations, Partner businesses and our supply chain – makes the task more manageable.
How we can help
We exist to give all our stakeholders – including clients, employees, partners, shareholders and society – the confidence to create the future they want in a world worth living in. Speak to us today to find out more about our approach to responsible investing and how it can assist you in achieving your financial goals while helping to build a more sustainable future.
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1Methane Management: The Challenge, United Nations Economic Commission for Europe, accessed November 2022
SJP Approved 30/11/22
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