Following the release of the UK Government’s Net Zero Strategy published yesterday, research from the last two rounds of Grant Thornton UK LLP’s Business Outlook Tracker* shows that only half (51%) the UK mid-market businesses surveyed have a net zero strategy in place, with over third (36%) saying they have not calculated their carbon emissions for the last year.
The research further shows that mid-market business leaders will likely welcome the detail that the overarching government strategy provides but will need further clarity about how exactly it will impact them.
Mid-sized businesses are particularly looking for clear guidance around international environmental and sustainability reporting standards, something that over a third (35%) of the UK mid-market business leaders who responded said they hope to see as an outcome from the UN Climate Change Conference (COP26) next week.
The research also explores the mid-market’s attitude to an economy-wide carbon tax. It found that the mid-market believes additional taxes on the use of carbon would be an effective strategy to focus businesses attention. Three quarters of respondents said the introduction of a carbon tax would encourage their business to focus on reducing carbon emissions (75%) and help the UK achieve its net zero targets (76%).
Dave Munton, Head of Clients and Markets at Grant Thornton UK LLP, said:
“Our survey tells us that, as the engine room of the UK’s economy, the mid-market recognises that it has a vital role to play in helping the UK achieve its net zero targets and is ready and willing to play its role in a low-carbon future. We also know from the August edition of our Business Outlook Tracker that the mid-market believes business’ sustainability performance has a direct impact on customer buying decisions and on talent attraction and retention.
“Though businesses recognise the importance of sustainability, we also know that only 51% of mid-market business have a net zero carbon strategy in place. This is due to the many, varied and often urgent priorities constraining the resources of mid-market businesses. To move net zero up the agenda for the mid-market leaders, policy setters need to make it as easy as possible for businesses if they want to engage them effectively. To achieve this, the mid-market will need a clearer road map which helps them to integrate net zero strategies into their business operations, ensures the mid-market has access to funds and projects and consolidates relevant reporting frameworks and standards.
“From a tax perspective, the UK government has stated that it does not have immediate plans to introduce an economy-wide ‘carbon tax’ on companies, choosing for now to focus on energy trading schemes (carbon pricing) and specific taxes such as the climate change levy. However, carbon taxes are proliferating globally and have been seen to be effective and, in some cases, revenue neutral, potentially influencing UK thinking going forward.”