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How can policy better support SMEs in the pathway to Net Zero? (Energy Saving Trust)

1. Outline

The Climate Change Committee (CCC) commissioned Energy Saving Trust to conduct some work to better understand the actions needed from small medium enterprises (SMEs) to meet the Sixth Carbon Budget, evaluate climate policies in place that impact on SMEs and suggest new or strengthened policies. The research involved SME interviews focussing on four low-engagement, high-emission sectors (horticulture; manufacturing of wearing apparel; electrical, plumbing, and other construction installation activities; restaurants).

2. Key messages

The key recommendations from the report:

  • A UK government plan for SME decarbonisation to enable more joined-up, cross-departmental policy making to address the common net zero challenges that small businesses face – particularly upfront financing and time and knowledge constraints. This plan must include better coordination of activity delivered through regional development funding, both between regions and with national net zero policies.
  • A clear regulatory timetable as a central part of the plan. SMEs respond to coming regulation, with investment planning made in line with the known timeline. Thus, government should establish firm dates for future low carbon standards, set as early as possible (and expressed more strongly than as ‘ambitions’). This will reduce SMEs’ decarbonisation costs and risks.
  • A joined-up support framework. This should couple ongoing awareness raising with a single contact point for SMEs. The contact point should provide access to financing support, information on regulations, footprinting and audit services, as well as peer learning networks.