Expert Comment: ‘The Path to Net Zero is far from Easy’

In the news this week, a YouGov survey on behalf of Veolia has shown that less than a third of UK businesses have a strategy for reaching net zero and 42 per cent of companies are feeling “overwhelmed” by the steps needed to achieve the goal.

Here, Thanos Papadopoulos, Professor of Operations Management, and Dr Maria Elisavet Balta, Senior Lecturer in Human Resources Management and Organisational Behaviour, in Kent Business School reflect on the net zero plans of the government unveiled at COP26 and what is required of businesses to make positive steps forward.

‘The Government’s plan to reduce greenhouse gas emissions to reach net zero by 2050 recognises the imminent need for businesses to address both the challenges and the opportunities related to the reduction of their environmental impact.

‘These challenges relate to lack of knowledge and expertise required to implement effective and efficient carbon reduction strategies while focusing on their core business, as well as lack of clarity on how to measure their carbon footprints consistently.

‘For SMEs, which constitute around 99% of all businesses and are the backbone of the UK economy, the path to net zero is far from easy. Although SMEs may have a relatively modest footprint related to their short supply chains and fewer employees, they continue to share facilities, outsource manufacturing and other supply chain nodes, and pay energy bills themselves. This makes the transition to other types of energy particularly challenging.

‘Reduce costs by reducing emissions’

‘Allocating or acquiring resources and alternative renewable energy to enable them to comply with net zero targets may be costly. There is also pressure by contractors in the supply chain, who have already committed and set targets for reducing greenhouse emissions, then expecting suppliers to match them. SME owners may become overwhelmed knowing where to start and how to set priorities on sustainability targets, which may lead to their abandonment.

‘Nevertheless, transition to net-zero offers opportunities for UK SMEs to reduce their costs by reducing their emissions, especially those that are transport-intensive. They can also offer goods and services that could help the transition to the green economy, such as by offering consulting and financial services.

‘Capital expenditure on global renewable energy is predicted to increase by 14% by 2025, whereas supplying the goods and services to enable the net-zero transition globally could be worth £1trillion by 2030, according to a recent report by McKinsey.

‘Educating SMEs on how to set and achieve net-zero sustainability goals is vital in terms of recognising their carbon footprint, setting strategies to reduce emissions and offsetting those difficult to be reduced. This must also include engaging staff and stakeholders and reviewing entire business models, but the starting ground must be adopting the learning process and attending to opportunities made available.’

Thanos PapadopoulosProfessor of Operations Management

Dr Maria Elisavet Balta, Senior Lecturer in Human Resources Management and Organisational Behaviour

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