How to become a net zero business

Awareness of climate change issues among small businesses is growing, as is the wish to join in climate action. However, many small businesses struggle to overcome barriers to reducing their carbon emissions. Understanding these barriers and finding practical solutions is critical to becoming a net zero business.

Key barriers to business net zero actions

Costs

Upfront capital costs to upgrade items such as machinery and vehicles can be difficult for small businesses to fund. The inability to purchase at scale can mean higher costs per unit for low-carbon raw materials, products, and services.

Ongoing costs can also place a burden on your business and add to worries about remaining competitive on price, especially if your competitors are not taking similar actions.

You should aim to attract customers who value net zero commitments, or business customers which need low-carbon suppliers as part of their own value chain reporting, by marketing your climate actions. You can also gain a competitive advantage in tendering for contracts, more of which are requiring verified net zero commitments.

Feasibility and credibility

Small businesses can often struggle to find net zero solutions that work for them. It can be difficult to accurately define (and therefore tackle) your carbon footprint, especially Scope 3 emissions across your value chain. Lack of access to accurate or cost-effective monitoring and verification tools can affect the credibility of your green claims and progress to net zero. An over-reliance on carbon offsetting could open your business to accusations of greenwashing.

Free carbon footprint tools are available to get you started, but you may benefit from the expertise of professional carbon footprinting service providers.

Capacity and skills

Many businesses are busy focusing on day-to-day tasks making it hard to devote significant time and resources to fundamental business change that may not positively impact profitability in the short term.

It can be challenging to see how small changes in your business can make a difference on a global scale. Also, to make a change, you may need investment in staff training or recruitment to fill dedicated roles focusing on net zero priorities.

The coronavirus pandemic showed how the short-term effort of making necessary changes to business operations can bring long-term benefits in terms of efficiencies and new ways of working. Setting medium-term goals, and quantifying the potential benefits of change, can provide focus.

Willingness and resistance

People within your organisation, and your supply chain, may have strong views opposing the science of climate change and, in contrast, do not see it as a problem. Key staff may resist business change based on short-term impact on revenue or the diversion of investment from profitable carbon-intensive activities.

Climate literacy can help people to understand wider issues, but as a business owner it’s important to set a clear and understandable direction that can help to attract and motivate staff who can deliver on your net zero ambitions.

Contractual obstacles

Your business may be limited in your scope for action by existing contracts such as with a service provider, supplier contract or a building tenancy agreement. These partners may be unwilling or simply unable to make the necessary adjustments to meet your net zero requirements.

You should approach your partners to discuss what’s possible in the short term and until your contract expires. You may be able to convince them of the joint marketing benefits of making positive actions on greenhouse gas emissions reductions.

If you ultimately need to find new providers, suppliers, or alternative arrangements for premises, you should weave these timescales into your net zero plan.