Humber SMEs have their say on UK’s Net Zero targets in major business study

Over 650 small and medium-sized businesses across the Humber region have shared what Net Zero means to them, in the first comprehensive study of its kind in the UK.

Aura has today announced the results of its Humber Future Net Zero Survey, as momentum builds for the UK’s hosting of the UN Climate Change Conference (COP26) in Glasgow in November

A large majority of businesses surveyed – 80% - agree that they have an environmental responsibility; with almost half of respondents (44%) saying that ‘improving the environment’ is a key motivator for meeting Net Zero targets.

It is the country’s first comprehensive survey of regional SMEs into their understanding of what Net Zero targets mean for their business.

Louise Smith, Director at Aura, said: “The insights from the data we collected will mean that the support provided to businesses of all sizes, across the region, will be more focussed and effective, and tailored to their needs.

“It is through strong collaboration with businesses of all sizes (the SMEs and the large companies) and support services in the Humber, through innovation and best business practice, that we will be able to meet Net Zero targets by 2050 together.

“This is something we are keen to work on with our partners including the Local Authorities and the LEPs.”

Just over half of all the respondents (58%) say that they are both aware of and understand the Government’s intentions for the UK to meet Net Zero on carbon emissions by 2050.

This still leaves some 13,000 of the Humber’s 31,000 small and medium size businesses unaware of or unsure of Net Zero targets and how these could impact them.

Sixty two percent of survey participants say that a primary motivation for taking green action is the perception that it will make savings but in fact there is generally a cost associated with green action in the short term.

However, the long-term implications of not committing to decarbonising action now could be even costlier as SMEs could be excluded from the supply chain if they are unable to demonstrate green credentials to customers.

Andy Parkinson, CEO of Lampada Digital Services which carried out the market research, said: “We are delighted to have partnered with Aura to deliver this exceptional opportunity to be part of the Humber’s leadership in understanding the particular challenges faced by SMEs on the Net Zero journey.

“This is a timely piece of market research as we approach the UN’s COP26 Conference in November. Over 99.9% of businesses in the UK are SMEs and they account for over half the country’s turnover.

“If we do not unlock the potential of this large group of businesses to reduce the country’s carbon emissions, we will not meet the 2050 Net Zero targets set by Government. They are a power house of innovation and entrepreneurship, particularly here in the Humber where some 90% of SMEs are made up of less than 10 employees.”

The complexity of the funding landscape acts as a major barrier to SMEs as they seek to finance business processes changes to lower carbon emissions.

One third of SMEs also say that they don’t know where to go for investment grants or how to apply.

The funding landscape at a regional level tends to be disconnected and complex, and, despite many Humber SMEs successfully gaining support, for those that have less experience and understanding of how to access finance, the huge investment in time and effort required to navigate all the hurdles effectively means that they do not even attempt to.

Interestingly, businesses who are already actively reducing their emissions are more likely to be reliant on their own funds to undertake decarbonising activities.

Ms Smith said: “I would like to thank all of the many businesses who made the time to take part in this Survey despite the stresses and strains of the last 18 months.

This is a very strong response rate and ensures that the research provides representative insight and understanding of where the Humber’s SMEs are on their journey to Net Zero.

The Survey was commissioned by Aura from Lampada Digital Services; with the aim of ensuring that the support it provides to the region’s SMEs, through the Aura Innovation Centre, is effective and based on real data and knowledge.

The survey was part funded by the European Regional Development Fund.

The Report published today provides a series of recommendations which Aura, though its Innovation Centre located at the heart of the Humber, will be working with key partners and stakeholders to deliver.