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UK firms forced to show how they will hit net zero carbon emissions

Written by Latifa Yedroudj on Thursday, 04 November 2021. Posted in Politics, Analysis

Firms and shareholders must reveal detailed plans to meet net zero emissions by 2023

UK firms forced to show how they will hit net zero carbon emissions

Firms and shareholders must reveal detailed plans to meet net zero emissions by 2023

World leaders have gathered in Glasgow for COP26, the 2021 United Nations Climate Change conference, where expert panels will sit down together to talk about plans in tackling climate change on a global scale. Now, UK firms will be forced to set out detailed plans on how they will move to a low-carbon future in line with the country’s 2050 net-zero target. 

Under newly proposed Treasury rules, SMEs must reveal their plans to meet net-zero emissions by 2023. Net zero is when a country achieves an overall balance between the amount of carbon it is emitting and the carbon it is removing from the atmosphere. It is up to firms and shareholders to decide the steps they take towards decarbonisation. The Treasury says the commitments will help to create a "huge pool of cash that could fund our net zero transition", including the move away from coal and the shift to electric cars. 

However, the government said it was not "making firm-level net-zero commitments mandatory", but the proposals aim is to “increase transparency and accountability" of businesses and how they affect the environment. Speaking at the COP26 climate summit, Chancellor Rishi Sunak claimed the UK was leading the world in becoming the "first-ever net zero aligned global financial centre". 

He said the changes would mean: "Better and more consistent climate data; sovereign green bonds; mandatory sustainability disclosures; proper climate risk surveillance; and proper global reporting standards." In total, 450 firms controlling 40% of global financial assets - equivalent to $130tn (£95tn) - have agreed to commit to limit global warming to 1.5C above pre-industrial levels. 

According to research by the British Business Bank, almost a third (30%) of all current UK greenhouse gas emissions come from UK businesses. Smaller businesses account for half of UK-business driven emissions, the same proportion as larger businesses.  

However, some business leaders said SME’s need more support to make long-term changes in operations to meet net-zero commitments. Mark Footman, Chief Operations Officer at CitySprint said: “While we welcome governmental announcements such as the launch of the Together for our Planet campaign in May, much more needs to be done if we are to succeed in solving the environmental challenges we face.  

“For example, at CitySprint, we have seen a spike in demand for larger vehicles during the pandemic and so are investing in more electric vehicles. But we need to see much more investment in the infrastructure needed to support green vehicles, such as the installation of more charging points, cycle parking and repair sites (which our research shows 41% of the UK’s SMEs feel is lacking). We also need more assistance from the government in the form of grants and financial support to enable businesses to up their environmental game and help them make the necessary long-term changes.  

“With over six million SMEs across the UK (accounting for 99% of the private business sector), they have a vital role to play in achieving a low-carbon economy. But the bottom line is that urgent action must be taken now and both businesses and the government alike must be willing to invest now for future gain. Only this way can we drive widespread, meaningful change.”

About the Author

Latifa Yedroudj

Latifa Yedroudj

Latifa Yedroudj has joined the Elite team to fully immerse herself in the business side of journalism, a strong passion of hers cultivated from young having co-run her mother's start up business since she was 18. Her interests lie in a wide range of subjects, including start ups, business, travel, and anything entrepreneurial she can get her hands on. She has worked for some of the biggest names in journalism including The Guardian and The Mirror. Follow her on @latifayed on Twitter for her latest journo rants.

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