Green Finance

What should SMEs do to become net zero?

9 May 2021

The UK recently agreed to legislate a new target to reduce emissions by 78% by 2035. It’s the most ambitious target for cutting carbon in the world, and will require everyone to play their part. So, what can SMEs do to scale back emissions and finally become net zero?


Businesses of different shapes and sizes, including well-known names such as Tesco, Barclays and Facebook are announcing net-zero commitments.

Are you ready to pledge your commitment to achieving net-zero emissions

If the answer is yes but you're unsure of how to start (or need a little inspiration), you’ve come in the right place. 

Measure, reduce and offset

Before you commit to “net zero”, you’ll need to build a picture of your business’ current carbon emissions. Only then can you create a workable plan of action. 

Step 1: Measure

The first step is to identify your carbon footprint. Assess all parts of your business, including your supply chain. Carbon Trust has a handy SME carbon footprint calculator that helps UK SMEs measure their corporate emission footprint following the greenhouse gas (GHG) Protocol Guidance.

Before you start, you’ll need details of the following relating your business:

  • Fuel consumption

  • Energy consumption

Step 2: Reduce

Once you have a breakdown of your business’ carbon footprint, you can start to identify where reductions can be achieved. 

You might start by implementing more efficient operational processes.

It can be more challenging to reduce carbon through your supply chain. Be prepared to switch to a greener energy supplier or business finance lender, for instance. 

Step 3: Offset

Although urgent, reaching net zero can be time-consuming. 

You can compensate for some of your business’ emissions by investing in projects that reduce emissions or absorb CO2, such as supporting renewable energy generation, planting trees or providing energy-efficient cooking stoves to communities in developing countries.

Wind energy

On 1 March 2021, Aviva plc committed to achieving net zero operations and supply chain by 2030, and net zero investments by 2040.

Let’s take a closer look at some of the things you can do as an SME owner to become net zero. 

1. Invest in energy-efficient technology

If you use a premises, switch to energy-efficient technologies such as LEDs. Did you know that LEDs consume approximately 11 times less electricity than halogen lights?

Investing in a smart meter is also the smart thing to do. By enabling your business to use energy more efficiently, you can save money on bills. Using a smart meter can also save you time because readings are sent directly to the energy supplier. 

2. Generate your own renewable electricity

Switching to a renewable energy supplier is a great move, but you can also go the full way and generate your own electricity. Depending on your budget and the amount of space you have, you could invest in solar panels or wind turbines, for instance.

There are startups out there that are making it easier and cheaper for businesses to generate their own zero carbon electricity and meet their sustainability goals. Ripple Energy does this by enabling you to co-own a new British wind farm.

3. Assess your supply chain

Don’t ignore your supply chain. 

Let’s say you run a small food and drinks business. You’ll have to factor in any emissions involved in growing produce, disposing of packaging – and everything in-between. That’s why working with transparent suppliers is key.

According to McKinsey, the typical consumer company's supply chain creates greater carbon emissions than their own operations, accounting for more than 80 percent of greenhouse-gas emissions.

When it comes to working out sustainability in your supply chain, the packaging company BillerudKorsnäs recommends asking your suppliers the following:

  • Are you maximising the space you use in containers, shipping vehicles and packaging? 

  • Are you considering the global impact when choosing partners for fulfilment, manufacturing and supply?

  • Do they have sustainability goals that align with that of your organisation?

4. Electrify your fleet

Increasingly, both consumers and organisations are turning to electric vehicles to meet their travel requirements. This rise in demand is being driven by environmental concerns and government initiatives such as ultra-low emissions zones. 

Fortunately, there are a number of government grants and electric car leasing options out there that make it easier for SMEs to make the switch. 

The bottom line

Going green is the only way forward, and when it comes to the financial imperatives, the evidence says it all.

Researchers at NYU Stern Business School discovered that sales of consumer products marketed as “sustainable” grew more than seven times more quickly than those of “conventional” products between 2015 and 2019.

If you require business finance to get your green project off the ground, use Funding Options to see what you could be eligible for. 


Leon JS
Leon Jayasinghe

Senior Strategic Partnerships Manager

Leon is a Senior Strategic Partnerships Manager at Funding Options where he plays a key role in driving commercial performance and strategic initiatives for the organisation. Leon leads Funding Options' green finance strategy, revenue diversification propositions and holds relationships with key partners.

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