What is net zero and why is it important?

What is net zero?

In 2019, the UK became the first of G7 country to enshrine in law the requirement to achieve net zero emissions by 2050. Doing so will require a drastic reduction in emissions and major investment in removing remaining emissions from the atmosphere. From lifestyle change to business decisions to new technologies, there is massive potential for us to cut emissions at an individual and collective level. Government support will be needed and businesses will, in the words of a UK Energy Research Centre report, need to make a ‘fundamental change to their business models and operating practices’.

If we are to meet this target it is imperative that government ensures there is sufficient support for businesses to make this transition confidently. Government must be more ambitious, however, and support firms to take advantage of the significant economic opportunities it provides.

But first, it’s important to have a clear understanding of what “net zero” means for your business. Reaching a point where we produce zero greenhouse gas emissions would be virtually impossible. That’s why we talk about “net zero” rather than “absolute zero”: it means that we are committed to removing enough emissions from the atmosphere to balance what we produce. In this way, we can reach a point where the emissions created by human activity are completely balanced by the emissions our activity removes from the atmosphere.

Small businesses and net zero

Small businesses make up over 99% of UK businesses and provide 60% of private sector jobs. In short, the government has no hope of reaching net zero across the UK without helping small businesses get there too. However, a recent study from the Broadway Initiative found that most small businesses are confused about what net zero is and how to get there.

In this blog, we will look at what you can do now to start your journey to net zero, and why it’s a good idea for your business.

Why is it important?

It is clear that we as a society need to do more to address our contribution to global warming, and businesses have a crucial role to play if we are to avoid the worst effects of climate change. Many firms both large and small now prioritise sustainability and green choices in their their business models. With 80% of UK residents stating that they are either “fairly concerned” or “very concerned” about climate change, it’s easy to see why it’s in your best commercial interests to be mindful of your green credentials. Consumers are increasingly interested in products and services that are more sustainable: cutting your emissions is good for business.

The risk of targets that seem a long way in the future is that they do not incentivise immediate action, but the International Panel on Climate Change (IPCC) has been keen to stress the importance of immediate change: “lower greenhouse gas emissions in 2030 lead to a higher chance of keeping peak warming to 1.5°C. In other words, businesses and government need to act now to play our part in making the required adjustments.

There are a range of ways of measuring your carbon emissions and tracking the impact of your efforts to reduce them. Whether you are part of large and complex supply chains or an SME looking to start its net zero journey, collaboration will be key, and having a strategy and a timeline towards carbon neutrality in place now is vital. That’s why we’ve launched our net zero hub as a central resource for practical guidance, thought leadership and useful resources for businesses engaging with the climate challenge.