Budget 2021: What the Net-Zero Objectives Mean for your Business
In March this year, Chancellor Rishi Sunak announced the UK’s 2021 budget, focusing on the country’s recovery plan post-Covid, but also setting targets to address climate change. The UK’s official goal is to attain net zero status by 2050, with many separate economic and infrastructural changes unveiled towards this end. But what does this mean for those managing small or medium sized businesses? Here are the key emerging environmental trends, and how your business can respond.
The government is funneling more than a billion pounds into the development and commercial adoption of low-carbon technology throughout the country. A complete energy overhaul would mean massive changes to industry, and entirely new business models around power supply. Almost £70 million is earmarked to encourage delivery of innovative energy storage prototypes to store excess energy derived from renewable energy sources.
Commercial solar in particular is receiving both interest and funding, with cutting edge, innovative UK businesses being rewarded with grants and financial support designed to upgrade business premises and buildings. Investing in renewable energy in the private sector will be a big focus for government going forward, making it a great opportunity for business to scale up, boost their green credentials or rework their business model entirely.
With energy prices predicted to double within the next decade, it also makes sense to seek funding for green energy upgrades for the savings alone. For example, according to solar experts at Mypower, “Wiles Greenworld, a London based stationary supplier, are working towards a zero-carbon operation. Their 81.8 kW solar rooftop installation offsets 28 tonnes of carbon per annum whilst offering income and savings of over £14,000 each year.”
The key is staying ahead
In June 2019, changes were made to the Climate Change Act, setting a 100% reduction of total UK greenhouse gas emissions compared to 1990 levels by 2050, i.e. net-zero. In April this year, the sixth Carbon Budget has begun to set into law the policies that will make this target a reality. With industry being a major contributor to carbon dioxide emissions and waste, legislative pressures will likely force larger corporations to change their standard business practices. More than 90% of the UK market comprises small businesses, which will be called on to choose greener supply chains, reduce waste and implement more sustainable policies.
It makes sense for small and medium sized business to keep ahead of legislative change. Instead of acting to merely avoid fines or penalties, companies can elect to be proactive, and make their own aspirational green business plans. Those businesses that are empowered to meaningfully engage with the spirit of the net-zero objectives are more likely to distinguish themselves from the competition, but also to make impressive savings.
Proactive environmental strategy and transparency has short- and long-term benefits for any business – green business is inevitably good business. According to TES CEO Gary Steele, “It all comes back to a very simple concept: Doing the right thing is the right thing for your business, your employees, your customers and the planet.”
Be prepared for changes in consumer demand
There is a growing awareness of the need for everyone to make changes, and consumers are arguably better informed and more eco-conscious than ever before. Whatever your business niche, chances are you’ll benefit from evolving towards cleaner, greener products or services that are proudly part of the solution. In 2021, no business can do without a strong sustainability ethos and a brand that genuinely communicates a commitment to lowered waste, more ethical, local labour and an emphasis on renewable energy.
Businesses that can intelligently respond to changes in consumer preference will capture a greater share of an emerging eco-conscious market. According to HSBC’s Made for the Future report, according to more than 10,000 surveyed companies, the biggest factors behind green investment include operational efficiency, staying relevant against competitors, and new regulations stemming from the 2050 net-zero objectives. In the wake of the Covid pandemic, many businesses are now realising that customers’ preferences have changed, and that appealing to this new market will mean recognising the responsibility business has to make meaningful improvements.
All in all, businesses across the country can expect the growing trend for sustainability to play an increasingly important role in the years ahead. Prices for fossil fuel energy will only continue to rise, carbon taxes are bound to increase and there are almost certainly going to be greater penalties for unsustainable premises, products or practices. The good news is that there has never been a better time to make the eco-switch, and upgrade to strategies that are both environmentally sound… and great for your bottom line.