intelligent

EUROPE

As new regulations such as the EU ’ s Corporate Sustainability Reporting Directive ( CSRD ) are set to expand in January 2024 , and the UK ’ s Streamlined Energy and Carbon Reporting ( SECR ) already mandates large companies to disclose carbon emissions of the small businesses within their supply chains , a significant gap needs to be addressed as the UK moves toward its net zero goals for 2050 .

In a survey of more than 1,000 small business leaders and owners , participants were asked how they would respond if a customer required evidence of their carbon emissions track record as a condition for continued business . It found that one in five small businesses in the UK confessed they would be unable to provide any emissions data at all .

This proportion rose most among businesses with no net zero targets ( 36 %), and smaller businesses with fewer than 10 employees ( 28 %), as well as among sole proprietors ( 52 %). Remote businesses were more than twice as likely as office-based or hybrid businesses to be unable to report emissions ( 41 % vs . 14 %). Interestingly , business leaders over 45 were nearly four times less likely to be able to report emissions than those under 35 ( 10 % vs . 38 %).

Of those who could report on their emissions , the most likely areas were emissions from purchased electricity , heating and cooling ( 31 %), or other emissions from their office buildings or factories ( 26 %). Only 25 % could report on emissions from business travel , product usage , or company-owned buildings , and 22 % could report on emissions they have avoided , such as through teleconferencing instead of in-person meetings .

Regarding the possibility of extending Scope 3 legislation to smaller businesses , the survey revealed that only one in five would be capable of reporting emissions across their broader supply chain . Notably , this figure dropped to 15 % among business leaders in the retail sector , one of the sectors which rely most heavily on its supply chain . In contrast , the construction and manufacturing sectors fared better , with 25 % and 24 % of businesses , respectively , saying they could report such emissions .

Joanna Morris , Head of Marketing and Insight at Novuna Business Finance , said “ We know that there is a growing sentiment among small businesses keen to minimise the impact their business is having on the environment . But , key to this , measuring and monitoring emissions are the first steps toward setting realistic sustainability goals and timelines .

“ Small businesses should be aware that even if they aren ’ t directly subject to current sustainability regulations , their larger partners may still require emissions data for their own Scope 3 calculations . Meanwhile , from separate research we have conducted , we know that those who have prioritised sustainability within their business can point to a range of advantages , including reduced waste and costs , enhanced investor appeal and improved staff retention . Failing to keep up with this trend risks falling behind .” �