Majority of smaller businesses don’t understand ‘carbon jargon’, new British Business Bank research reveals
Press release
Almost three in four (74%) smaller businesses don’t understand how the term ‘net zero’ applies to them
The majority of smaller businesses3 in the UK don’t understand how common environmental terms such as ‘net zero’, ‘carbon neutral’ and ‘carbon footprint’ apply to their businesses, according to new research commissioned by the British Business Bank.
The Opinium survey of 1,000 senior decision makers in smaller businesses found more than half (54%) believe the language, terminology and information around carbon emissions reduction are overcomplex.
Over three in five (61%) say they would find more information and advice about taking action to measure and reduce their business’ carbon emissions helpful, with over half (53%) of those wanting advice on measuring their business’ carbon footprint and a similar proportion (51%) wanting information to help work out if reducing carbon emissions makes financial sense for their business.
Nearly half (44%) of those surveyed don’t know where to get information on reducing their carbon emissions and how best to approach related commercial or financial opportunities.
The British Business Bank’s #GreenToGrow campaign, launching today, aims to demystify and alert smaller businesses to the commercial benefits of investing in decarbonisation. Resources include a new ‘Green Decoder’, an online guide co-created with Nottingham Business School, Nottingham Trent University to help smaller businesses decipher the terminology surrounding decarbonisation.
The British Business Bank’s online Finance Hub also provides a series of guides and information about sustainability issues and how smaller businesses can start their journey towards net zero.
‘Carbon jargon’ terms misunderstood by businesses include:
- Greenhouse gas emissions: 87% of businesses did not have a full understanding of the term and what it meant for their business
- Decarbonisation: 78%
- Net zero: 74%
- Carbon neutral: 69%
- Carbon footprint: 59%
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All references to smaller businesses refer to small and medium-sized businesses, defined as businesses having 0-249 employees, based in the UK
Smaller businesses are far too often put off by the overcomplex ‘carbon jargon’ that comes with reducing emissions. By helping decipher some of the terminology around decarbonisation the British Business Bank hopes to show smaller businesses that simple, incremental changes, such as switching off equipment when not in use can make a difference in their net zero transition.
This will become an increasingly important businesses requirement. Given that many consumers now consider sustainability when they make a purchase, by becoming greener, smaller businesses can enhance their competitive edge and expand their customer base.
Our new mission at the Bank is to continue to drive sustainable growth across the UK, and to enable the transition to a net zero economy, by improving access to finance for smaller businesses. This new #GreenToGrow campaign will help more businesses find the information they need to move toward transition.
Shanika Amarasekara Chief Impact Officer, British Business Bank
Smaller businesses are key to our economy and have significant carbon emissions impact. They can act as agents for change to meet the UK government’s net zero targets. Most smaller businesses are at the initial stage of their carbon management journey and will benefit from the support provided through the British Business Bank’s #GreenToGrow campaign. Smaller businesses have been overlooked in the past and this is changing. The business case for carbon management is stronger than ever and smaller businesses have an opportunity to act now to remain competitive. Dr Muhammad Mazhar Senior Lecturer in Sustainability, Nottingham Business School, Nottingham Trent University
Smaller businesses have a big role to play
The British Business Bank’s Smaller businesses and the transition to net zero report, published in October 2021, found that smaller businesses account for around half (50%) of total emissions from UK businesses4 Nearly half (45%) believe, however, that a reduction in their carbon emissions will not make a significant difference to the environment and almost three in four (72%) believe large corporations are responsible for most of the business carbon emissions in the UK.
Finance as an enabler to ‘net zero’ transition
Only one in twenty (5%) smaller businesses say reducing their carbon footprint and environmental impact is their number one priority for 2022. The Smaller businesses and the transition to net zero report also found that more than a third (35%)2 cited costs as a barrier for reducing their carbon emissions, particularly upfront capital costs (21%)5 .
So far, 11% of the smaller business population – equating to around 700,000 businesses in the UK – have accessed external finance, in the form of loans or equity, to support ‘net zero’ actions, with 22%6 – equivalent to around 1.3 million businesses – saying they are prepared to access external finance to support ‘net zero’ actions in the next five years.
Notes to editors
About the British Business Bank
The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.
The British Business Bank’s core programmes support nearly £8 billion3 of finance to almost 94,800 smaller businesses4 . Since March 2020, the British Business Bank has also launched four new Coronavirus business loan schemes, delivering more than £72 billion of finance to over 1.5 million businesses.
As well as increasing both supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of the finance options available to smaller businesses. The British Business Bank Finance Hub provides independent and impartial information to businesses about their finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success. In light of the coronavirus pandemic and EU Exit, the Finance Hub has expanded and it now targets a wider business audience. It continues to provide information and support for scale-up, high growth and potential high growth businesses, but now provides increased content, information and products for businesses in survival and recovery mindsets. The Finance Hub has been redesigned and repositioned to reflect this, during this period of economic uncertainty.
British Business Bank plc is a public limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ. It is a development bank wholly owned by HM Government. British Business Bank plc and its subsidiaries are not banking institutions and do not operate as such. They are not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for the group can be found at british-business-bank.co.uk.
Methodology
Fieldwork was undertaken by Opinium. All figures, unless otherwise stated, are from Opinium. Total sample size was 1000 small-to-medium UK senior decision makers. Fieldwork was undertaken between 1st – 11th February 2022. The survey was carried out online. The figures are representative of all UK adults (aged 18+).
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