insights

Net Zero – What is it and why businesses should strive to achieve it

Posted on: 04/08/2021

Last month saw Net Zero Week 2021, the national week which raises awareness of the UK’s commitment to achieving net zero and how businesses and the wider society can act to support this.

Net zero is the world’s answer to stopping climate change, ensuring the amount of greenhouse gases going into the atmosphere are balanced by removal out of the atmosphere. The UK became the first major economy in the world to pass laws to end our contribution to climate change and achieve net zero carbon emissions by 2050. The EU and many other nations have now agreed to do the same, meaning net zero has been adopted as the best strategy to protect us and the natural world from rising global temperatures. With the 2021 United Nations Climate Change Conference (COP26) taking place in the UK in November 2021, the focus on our commitment to net zero carbon emissions by 2050 is centre stage.

In order to achieve the UK’s status of net zero by 2050, the Government has set out the ten point plan for a green industrial revolution, supporting green jobs and accelerating the UK’s path to net zero.  The plan will utilise £12 billion of Government investment, and potentially three times as much from the private sector, to create and support up to 250,000 green jobs. This plan will help build back better, investing in making the UK a global leader in green technologies.

The plan focuses on ten points:

1 Advancing Offshore Wind Point

2 Driving the Growth of Low Carbon Hydrogen Point

3 Delivering New and Advanced Nuclear Power Point

4 Accelerating the Shift to Zero Emission Vehicles Point

5 Green Public Transport, Cycling and Walking Point

6 ‘Jet Zero’ and Green Ships Point

7 Greener Buildings Point

8 Investing in Carbon Capture, Usage and Storage Point

9 Protecting Our Natural Environment Point

10 Green Finance and Innovation

In April this year, the Government announced the sixth Carbon Budget, setting into law the climate change target to reduce emissions by 78% (compared to 1990 levels) by 2035. To be ready for and support the acceleration of the UK’s net zero objective, many businesses in the UK will need to fundamentally change their operations, business models, their approach to climate risk assessment and planning, and their relationships with investors and consumers.

With almost one fifth of greenhouse gas emissions coming from businesses, it’s important that businesses understand how they can achieve net zero. There are many benefits to businesses in achieving net zero, including the reduction of operational costs and improving efficiency, increasing long-term resilience and reputation, and creating opportunities through innovation. In our previous insight piece into why sustainability is important for businesses, it was reported that 62% of businesses consider having a sustainability strategy necessary for achieving competitor advantage, with NatWest research showing that 72.7% of UK SMEs have invested in new technology to improve efficiency.

Innovation is one of the key tools’ businesses can embed to help the UK meet its net zero ambitions. Chris Woodward, member of the Environment and Circular Economy sector working group for Innovate UK EDGE, comments on the importance of innovation to help businesses achieve net zero:

 “Businesses should be embracing innovation to achieve net zero. Through business model innovation and process/product innovation, businesses can gain USP’s, setting themselves ahead of competitors, as well as generating productivity, improving efficiencies, and achieving sustainability improvements. Ultimately enabling them to achieve growth and scale”.

At Exemplas, through our delivery of Innovate UK EDGE, we provide bespoke mentoring, coaching and advisory support to help businesses scale and grow through innovation. Working closely with an Innovate UK EDGE Innovation and Growth Specialist (IGS), one client in the retail sector sought support to enhance their competitive advantage. The IGS supported them with the creation of an environmental policy and how to embed this as part of their marketing strategy. The outcomes of the support have resulted in new business opportunities for the client, with them securing three multiyear contracts as a result of being able to demonstrate sustainability as their USP.

We also deliver Hertfordshire Growth Hub, the county’s flagship business support service. As part of net zero week, Hertfordshire Growth Hub delivered an event on what net zero means to businesses and included speakers and panellists from various sectors to discuss the benefits and challenges of net zero.  Hertfordshire Growth Hub regularly works with business support organisations to provide resources and advice businesses need to grow. This support for registered users includes access to a Knowledge Bank, full of on-demand videos on a variety of topics such as sustainability, and a Marketplace that gives businesses access to funded opportunities including the Low Carbon Workspaces grant.

Find out more about the work we do in the public sector to support SMEs.

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