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Is being sustainable affordable for businesses?

As COP28 starts and we become more conscious of our collective impact on the climate, what can business do to address the climate crisis? And is being sustainable really affordable ?
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Is being sustainable affordable for businesses?

As COP28 starts and we become more conscious of our collective impact on the climate, what can business do to address the climate crisis? And is being sustainable really affordable ?
Woman drop plastic cup into recycling bins, concept of global environmental protection and sustainability.

In 2021 the government asked most large firms and financial institutions to demonstrate how they will move to net-zero to align with the UK’s target of becoming net-zero by 2050. Currently there are no legal requirements for businesses to move to net zero or become more sustainable. And while this may change in the future, many businesses have already opted to adopt the net zero target and make their products and supply chains more sustainable.

An example is Amazon who says that all the delivery packaging it uses across Europe is now fully recyclable. Its products now arrive in flexible paper bags, cardboard envelopes, and corrugated cardboard boxes which can all be placed in our household recycling.

Working in partnership

Actions by businesses working in partnership with Government will be key to the successful delivery of the UK’s Net Zero target by 2050. But when looking at any sustainable measures there will be an inevitable cost implication – there will also be a cost to not becoming more sustainable, although this may not feature directly on your balance sheet.

The many important nearer-term steps across all sectors underpinning the transition will also be important such as whether you have a sustainability strategy or have Environment and Social Governance. Research has shown that

  • Although 90% of business leaders think sustainability is important, only 60% of companies have a sustainability strategy. – Forbes
  • 67% of companies have started using more sustainable materials, such as recycled materials and lower-emitting products and 66% are working to increase their energy efficiency.. – Deloitte
  • Almost one-third (30%) of Europe’s largest companies have committed to reaching Net-Zero by 2050. – Accenture
  • In a 2022 study of 850 companies worldwide, 80% said they plan to increase their investments in sustainability. – WeWork

SMEs and sustainability

Moving to more sustainable packaging, such as Amazon have done, while a very positive move also comes at a cost and shifts the responsibility on to the consumer to recycle it. Some larger organisations may be able to manage these costs, but for small and medium businesses (SMEs) it will be far more challenging to become a sustainable business.

With the government aiming for net-zero by 2050, action by SMEs is vital as they make up 99% of businesses in the UK . The UK Business Climate Hub offers advice to smaller businesses via the SME Climate Hub. They polled 194 SMEs and found that 60% already had a plan for reducing their climate impact – of those that didn’t 68% stated that lack of resources was an obstacle. Overall 48% said that lack of funding impeded them from taking action on climate change.

What help is available?

Nationally the Climate Change Committee has produced a comprehensive report on the role of business in delivering the UK’s Net Zero ambition. In the West Midlands the Greater Birmingham Chambers of Commerce has a section that provides comprehensive help for businesses across many sectors.

Additionally, businesses can sign up to receive newsletters to stay informed and receive more specific information based around their needs. There are also many websites that offer the chance to keep up with the latest in sustainable and innovative technology across a wide range of industries.

Information on grants and funding in England available for businesses wanting to become more sustainable can be found at Gov.Uk. Schemes specific to the West Midlands can be found at the Business Climate Hub.

So is sustainability affordable?

While help is available in the form of grants and funding, there can still be a need for companies to outlay money upfront. With fewer resources available, payback time is particularly important for SMEs. Measures such as installing solar panels involves spending thousands of pounds and while will they reduce your carbon footprint, it can take many years to pay for itself. However, most companies who have invested in solar panels believe it is money well spent.

Just like businesses, countries attending COP28 will be grappling with weighing the benefits of net-zero with the costs. But the science is clear – we must drastically reduce our carbon emissions or pay the price – for every year we delay a decision, the more we will have to pay. So investing in sustainable measures now will save businesses extra costs in the future.

Are you a business or organisation in the private, public or third sector looking to conduct R&D activities to help you with product, service or policy development?

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