Mike Cherry, FSB: “Driving forward the green agenda”

Small businesses want to do their bit to combat climate change and take advantage of a low carbon economy. This needs to be matched by a fair framework for policymakers.

In June 2019, the UK government became the first in the world to pass laws requiring the UK to bring all greenhouse gas emissions to Net Zero by 2050, faster than any other economy. Then, in December, the Government announced new plans aiming for a 68 per cent reduction in greenhouse gas emissions by the end of the decade compared to 1990 levels.

This follows on from the Government’s 10-point plan for a Green Industrial Revolution, creating 250,000 new jobs. At a time when the UK is getting ready to host COP26 next year, this is a positive blueprint for a post-pandemic recovery. However, gaps remain. For example, despite strict targets for phasing out petrol and diesel vehicles, the UK Government has provided no solution for supporting the affordable development and roll out of more environmentally friendly HGVs. It is evident that a bold, long-term plan of this nature will require some nuts and bolts to make work, providing businesses with a clear pathway to change.

Despite the policy ambition shown by multiple governments, the Committee on Climate Change has warned that Britain is on course to miss its climate target without more action. So, as the ambition increases, Government must introduce environmental policies that are measured, proportionate and timely. This will give businesses a fair chance to adapt, thrive and grow in a low carbon economy.

Fairness test

In November, FSB joined with business representative groups across the economy to highlight the need to achieve a ‘Just Transition’ to Net Zero that empowers all businesses – large and small – to play their part.

Working with the other major UK business groups – the CBI, Make UK, British Chambers of Commerce and Institute of Directors – we called on the Government to take a principles-led approach to Net Zero policy development.

And we identified five key principles intended to act as a ‘fairness test’ for policymakers. They are:

1. Fairness of Ambition: Government’s climate change policies must be aligned to the latest scientific evidence and demonstrate ambition that matches the reality of the challenge, both in its timescales and its extent

2. Fairness of Accountability: Government, alongside Regulators, should provide coherent and accountable governance and ensure that climate change policies are coordinated

3. Fairness of Delivery: Government should, where possible, support, empower and incentivise businesses to find their own ways to net-zero, acknowledging that a one-size-fits-all approach to policy delivery may not work in all cases and that a diverse set of business-led solutions and incentives will be needed

4. Fairness of Opportunity: Government must provide a level playing field, ensuring businesses of all sizes, in all sectors, across every region and nation, can contribute to a net-zero economy, through their innovations, investments, and markets

5. Fairness of Cost: Government climate change policies must be affordable and achievable. Government must ensure that the costs of transition to net-zero are distributed equitably among businesses, workers, and consumers, based on their environmental impact, ability to pay, ability to adapt and potential for gain

These principles provide a robust framework allowing the UK to maintain its current domestic and global ambitions while being accountable, credible and fair. And they will mean that the UK Government has the full support of businesses in at COP26 as they seek to show global leadership.

Why is this important?

In 2018/19, businesses were responsible for around 18 percent of the UK’s emissions, according to Government data. From the smallest sole trader to the largest corporation, in the last few decades, we’ve seen a stark shift in narrative. Business owners want to go green, they want to make change. They see the benefits, but must be empowered to get there.

That’s why the fairness test is so important. Government and business have an opportunity to work together to deliver viable, long-term measures to encourage sustainability, protect society and grow a resilient economy. 

It will also require the private sector, public sector, and Government to work in partnership to bring forward the strategic low-carbon infrastructure and technology needed to reach our 2050 goals.

How can my business be more sustainable?

Sustainability is key. We recognise that some smaller businesses will need targeted Government support to ensure they are able to assess and reduce their own carbon footprint in a way that is most appropriate to them, bringing the UK one step closer to its net zero target. In the short term, many businesses are already switching to renewable energy suppliers, reducing plastic usage and waste in offices, turning lights off, planting trees and educating and encouraging employees through Carbon Literacy Training.

As the UK gets back on its feet after a year to forget, we will need businesses of all sizes to drive forward the green agenda in a way that works for our economy, to show what they can do to support UK sustainability, and continue to deliver UK prosperity as we head towards Net Zero.