UK needs 40,000 businesses to hit 2030 Net Zero ambitions
A new NatWest report has found that the UK needs 40,000 new SMEs in key sectors between now and 2030, if the country is to meet its net zero ambitions. With the right support SMEs could contribute up to 50% of UK 2030 emission targets through pursuing decarbonisation.
A Springboard to Sustainable Recovery, published today as COP27 begins in Egypt, has found that the UK economy could benefit from a potential £175billion revenue opportunity by 2030, with over 260,000 new jobs created in the process, as it aims to meet world-leading decarbonisation and emissions targets.
Additionally, these targets offer an opportunity for UK businesses to access other markets with their low-carbon goods and services, with the investment required to decarbonise Europe in the next ten years around five times that required in the UK.
Some of the areas where new businesses will be required to help drive transition in the UK include fitting insulation in the UKs 30 million+ homes, to businesses deploying millions of electric vehicle chargers, and those firms contracted to build world-leading renewable infrastructure.
The business case for decarbonisation has strengthened, as the dramatic rise in energy prices in the UK and uptake of transition commitments (such as energy efficiency standards) mean that many decarbonisation investments could make more financial sense for SMEs in 2022 than 2021.
Alison Rose, chief executive officer, NatWest Group said: “The imperative to tackle climate change – still the biggest single issue facing humanity – is more pressing than ever. But in the context of a turbulent macroeconomic environment, with the prospect of a recession in the UK, and the increase cost of living due to rising prices, SMEs face tighter case flows and fears for the future of their business.
Yet against this backdrop, we find that SMEs in the UK are well placed and pivotal to drive the next decade of decarbonisation in the UK, and to harness growing revenue opportunities. This creates opportunities for business of all shapes and sizes, and at NatWest we will do everything we can to help businesses access that opportunity.”
Lord Nicholas Stern said: “It is now common cause that the drive to a net zero economy will take strong, internationally co-ordinated investment. A step-up in finance is absolutely crucial to speed up action and deliver the goals of the Paris Agreement. Every government and business globally should be focussed on the investments and innovation required to reach net zero as quickly as possible.
There are big opportunities for SMEs to break into other markets with low-carbon offerings and to make their mark the larger decarbonisation challenge. The additional revenue that could be unlocked, both locally and abroad, for SMEs could not only create jobs, but also grow the whole UK economy and contribute to the development of historically underdeveloped nations.”
The investment requirements to decarbonise Europe in the next ten years will be around five times the size of the investments required in the UK, and the global requirements will be around 30 times. The report has also found that UK SMEs already export nearly £200billion of products and services today, including in many sectors critical to decarbonisation, such as chemicals, electrical equipment, and low carbon services. The findings show that SMEs who successfully export low-carbon products and services will be selling into a growing global markets.
There are different revenue opportunities across the UK accessible through decarbonisation, with the scale of opportunity in different sectors varying from region to region. For example, more than 50% of the revenue opportunities for buildings and transport lie in the South and North West, but more than 50% of the SME opportunity in renewables deployment lies in the North East and East.