50% of UK carbon reductions could be delivered by SMEs

Discovering further the topic of sustainability and green investments we asked our expert, Emma Kisby, to join us for a discussion about the role of Fintech in climate action. Among others, we discovered that there is a huge opportunity for Fintech to help SMEs reduce not only their own, but also total UK’s carbon emissions.

What’s the actual carbon footprint of SMEs?

According to the research done by NatWest Group and Cogo, only 1 out of 10 SMEs actively track their carbon emissions. There is a lot of confusion around the terminology related to climate change and some of the concepts are hard to understand, which makes the process itself quite tricky.

Another part of the problem is the lack of time and resources to allocate to climate action. With some of the eco-friendly solutions being quite expensive and the insufficient knowledge about various alternatives creating additional disorientation, pursuing net zero goals simply is not a priority.

However, the data that NatWest Group and Cogo managed to gather suggests that SMEs account for around 30% of carbon emissions in the UK. In addition to that, perhaps even more importantly, 50% of UK carbon reductions could be delivered by SMEs if they took action.

How to help SMEs achieve net zero emissions?

As we can see, it’s really important for SMEs to start actively working towards reducing their carbon footprint. If done right, they have the potential to have a way more positive impact on the environment than just neutralising their own carbon cost. This is where banks and Fintech have a big role to play, enabling this ‘green’ transition.

SMEs are very diverse and therefore have different needs. This is where Fintech comes in. With innovation being at the very core of this industry, it can help design and introduce the right means for measuring SMEs’ carbon footprint that are appropriate for their specific field of activity.

When it comes to banks, it’s hard to overestimate the potential role they have in supporting SMEs. With the data available to them, they can provide financial recommendations for both retail customers and SMEs. This could include nudging them to change their energy provider or start using LEDs. It will also help move their investing strategy away from fossil fuels and deforestation companies.

Listen to the full discussion with our expert, Emma Kisby, where we deep dive into this and many other interesting topics. The course is currently free, so don’t hesitate to enrol now!

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