Benchmarking SME decarbonisation policies ‑ Country notes: United Kingdom
Table of contents
Introduction
Copy link to IntroductionThis country note highlights recent decarbonisation trends in the United Kingdom, examines information on the environmental footprint of UK SMEs, and outlines main government policies for SME decarbonisation. SMEs in the UK are responsible for around 32% of GHG emissions in the business sector. However, only 21% of UK SMEs had a climate neutrality strategy in place in 2024. To support SME decarbonisation, national and sub-national governments offer a wide range of support services, most of which are accessible via the UK Business Climate Hub, a one-stop shop for net-zero information for SMEs. The Hub provides information on green skills training, sector-specific guidance, and funding programmes, some of which combine energy audits with related financial support. Historically, financial support for SME decarbonisation, such as grants for energy efficiency and renewables, has been fragmented across various programmes, many of which were implemented at the local and regional government level. Recently, there has been increased activity at the national level, reflecting a shift in funding sources from the ERDF to the Shared Prosperity Fund following Brexit.
SMEs in the green transition
Copy link to SMEs in the green transitionUK’s progress in the decarbonisation of the economy
Copy link to UK’s progress in the decarbonisation of the economySince 1990, the United Kingdom has reduced its GHG emissions by 54%, making substantial progress in decoupling emissions from economic growth (Figure 1, Panel A). This downward trend in emissions – among the strongest in OECD countries – has continued in recent years, with a further estimated 4% decline in CO₂ emissions since 2023 (Department for Energy Security and Net Zero, 2025[1]). The positive trend over the past decades can be attributed to a combination of energy policies and a shift of the UK economy from more carbon-intensive manufacturing to less carbon-intensive service-based industries (Office for National Statistics, 2019[2]). Energy policies have driven a transformation in electricity generation, first from coal to gas, and more recently towards renewables. The share of renewables in electricity generation rose substantially from just 7% in 2010 to 42% in 2022.1 However, progress in some sectors has been slow, particularly in the transport sector, which remains the largest emitter of GHG emissions (OECD, 2025[3]) (Figure 1, Panel B).
Figure 1. Decoupling of GHG emissions from economic growth and CO₂ emissions by economic activity
Copy link to Figure 1. Decoupling of GHG emissions from economic growth and CO₂ emissions by economic activity
Note: Distribution of CO2 emissions by economic activity (Panel B) shows the top 5 highest carbon emitting sectors in 2023, excluding the SIC category “consumer expenditure” (consumption of fuels and other products by individuals in the UK, as opposed to the production of these by industry).
Source: OECD (2022[4]), OECD Environmental Performance Reviews: United Kingdom 2022; and OECD “Air emissions – GHG emissions inventories” based on National Inventory Submissions 2023 to the UNFCCC, OECD Data Explorer • Air emissions - Greenhouse gas emissions Inventories (Panel A); Office for National Statistics (2025[5]), Atmospheric emissions: greenhouse gases by industry and gas - Office for National Statistics (Panel B).
The environmental footprint of SMEs
Copy link to The environmental footprint of SMEsThere are more than 5.5 million SMEs in the UK, which employ 16.6 million people and generate GBP 2 752 billion in turnover (UK Gov, 2024[6]). They account for around 32% of GHG emissions in the business sector and 40% in the manufacturing sector, following recent estimates of the OECD dashboard of SME greening and green entrepreneurship indicators (OECD, 2023[7]). While this aggregate is 5 percentage points below the EU average for the overall business sector, it exceeds the EU average by 10 percentage points in the manufacturing sector (Figure 2, Panel A). This suggests that SMEs in the business sector are slightly less carbon intensive than their EU counterparts – possibly because their activities are more concentrated in lower-emission business sectors such as finance and other services. On the other hand, the higher share of emissions in manufacturing suggests a greater concentration of UK SME activity in energy-intensive industries, such as chemicals, metals, and food processing.
The higher share of SME GHG emissions is also reflected in a higher emission intensity in the manufacturing sector, which implies that per USD of value-added UK manufacturing SMEs emit 30% more GHG emissions than EU manufacturing SMEs on average (Figure 2, Panel B). This may be explained by the sectoral composition of the manufacturing sector in the UK where SMEs are more active in carbon-intensive subsectors, or by the potentially lower levels of investment in new technologies and energy efficiency measures.
Figure 2. SME share of GHG emissions in the business sector and manufacturing, UK, 2018
Copy link to Figure 2. SME share of GHG emissions in the business sector and manufacturing, UK, 2018
Note: Output weight is the SME share of value added at two-digit sector level. GHG emissions computed at two-digit sector level based on the application of an output weight corresponding to the SME share of value added. To calculate emission intensity, SMEs’ total GHG emissions are then divided by SMEs’ total value added.
Source: OECD calculations based on (OECD, 2023[8])
SME actions towards the green transition
Copy link to SME actions towards the green transitionIn line with the EU average, only 21% of SMEs in the UK currently have a climate neutrality strategy in place, and just 3% have achieved climate neutrality. However, 25% of UK SMEs are planning to define such a strategy, higher than the EU average of 19% (Figure 3) (European Commission, 2024[9]). This suggests that most SMEs at least recognise the importance of achieving climate neutrality. This aligns with a 2021 study by the commercial bank NatWest, which surveyed 800 SMEs and found that around 69% of respondents acknowledged the importance of reducing carbon emissions. However, only 6% of those who considered it important also identified it as a potential driver of business growth (NatWest, 2021[10]).
In terms of concrete actions, all SMEs in the UK with a climate neutrality strategy have implemented at least some measures (Figure 4). Notably, a significant share of UK SMEs (21% of reported actions) responded to offset carbon emissions, compared to just 7% at the EU level. This could reflect the UK’s more developed voluntary carbon markets, which offer SMEs better accessibility for carbon offsetting than the EU average. Recent 2025 survey evidence2 highlights that a majority of 60% of surveyed SMEs were using or were interested in using carbon credits as part of their climate strategy, despite 43% of SMEs reporting not knowing how credible carbon credits are (SME Climate Hub, 2025[11]).
Figure 3. SMEs with a strategy towards climate neutrality, UK, 2024
Copy link to Figure 3. SMEs with a strategy towards climate neutrality, UK, 2024
Question: Does your company have a concrete strategy in place to reduce your carbon footprint and become climate neutral or negative? (Excluding the following answer options: Don’t Know / No response; Other); The sum of percentages may not add up to 100% due to rounding of numbers.
Source: (European Commission, 2024[9])
Figure 4. SME actions towards climate neutrality, UK, 2024
Copy link to Figure 4. SME actions towards climate neutrality, UK, 2024
Question: What actions is your company undertaking to become climate neutral? (Excluding the following answer options: Don’t Know / No response; Other)?. The sum of percentages may not add up to 100% due to rounding of numbers.
Source: (European Commission, 2024[9])
UK SMEs are broadly aligned with the EU average when it comes to resource efficiency actions. However, there are some notable differences. Minimising waste (73% of UK SMEs versus 66% on the EU average) and recycling or reusing materials (68% of UK SMEs versus 48% on EU average) are clearly top priorities for UK SMEs. In contrast, saving energy appears to be less of a focus, with only 53% of UK SMEs reporting such actions compared to 66% across the EU (Figure 5, Panel A). It is somewhat surprising that the number of SMEs currently engaging in energy-saving measures is 10% lower than the EU average, given their relatively high awareness of the need to reduce emissions. However, this trend may suggest that many of the low-hanging fruits in energy efficiency improvements have already been addressed in recent years. This hypothesis is supported by the 2022 Eurobarometer survey, which shows that, back in 2021, still 63% (10% more than in the latest 2024 survey) reported undertaking energy-saving actions (Eurobarometer, 2022[12]).
The key barriers to resource efficiency actions among UK SMEs seem to be less related to the competencies of individual companies and more indicative of an underdeveloped circular economy market. This is reflected in the reportedly large lack of demand for resource-efficient products (27% in the UK compared to 18% EU average) and limited supply of required materials (27% in the UK versus 20% EU average) (Figure 5, Panel B). These figures highlight the need for further policy efforts to encourage wider adoption of circular economy practices. On the contrary, UK SMEs identified grants and subsidies as the most important driver of resource efficiency actions, broadly in line with the EU average (43% of UK SMEs compared to 37% of EU SMEs) (Figure 5, Panel C).
Figure 5. Resource Efficiency Measures put in place by SMEs and barriers to implementation, UK, 2024
Copy link to Figure 5. Resource Efficiency Measures put in place by SMEs and barriers to implementation, UK, 2024As a percentage of surveyed SMEs
Note: Top 5 actions, barriers and policy drivers displayed in Panel A, B and C. Question for Panel A: What actions is your company undertaking to be more resource efficient? ; Question for Panel B: Did your company encounter any of the following difficulties when trying to set up resource efficiency actions?; Question for Panel C: Which of the following would help your company the most to be more resource efficient?; Some answer options have been rephrased to improve readability.
Source: (European Commission, 2024[9]).
Government policies for SME carbon neutrality
Copy link to Government policies for SME carbon neutralityMonitoring emissions
Copy link to Monitoring emissionsUK SMEs have access to a range of free emissions measurement tools from both public and private sources. These tools vary in complexity and scope. Some focus on operational emissions (Scopes 1 and 2), while others also cover value chain emissions (Scope 3). All relevant and most popular tools, described below, go beyond simple measurement to provide actionable insights and practical next steps to help SMEs decarbonise.
SME Climate Hub’s emissions measurement tools
The “SME Climate Hub” is an initiative of the “We Mean Business Coalition”, a global nonprofit organisation committed to accelerating business and policy action to halve global emissions by 2030. The SME Climate Hub places particular emphasis on providing free tools and resources that help SMEs take climate action and measure their progress toward reducing emissions (SME Climate Hub, 2025[11]). It provides a range of free carbon calculators tailored to businesses of different sizes and needs. For small businesses (1 to 50 employees), the “Small Business Carbon Calculator” offers a simple, user-friendly online tool to estimate Scope 1, 2, and 3 emissions, which serves as a practical starting point for climate action. For medium to large businesses, the ‘Advanced Business Carbon Calculator’ provides greater flexibility, enabling companies to input data from multiple business sites. It also includes auditable spreadsheet tools, which make the calculator suitable for more complex tracking and reporting requirements.
Since 2020, more than 9 300 businesses have made climate commitments through the SME Climate Hub. The names of participating SMEs, their emissions reduction targets, and progress reports are publicly available on the SME Climate Hub website. In 2023 alone, over 500 SMEs submitted their emissions data through the platform.3
Measurement tools of Carbon Trust and NatWest
In addition to the SME Climate Hub, the Carbon Trust – a business-led, publicly funded consultancy – also offers UK-based SMEs a range of free support tools to help them measure their emissions. The Carbon Trust’s SME Carbon Footprint Calculator focuses on the most common sources of emissions, including fuel and energy use.4 Other tools include an introductory guide, called “Journey to Net Zero for SMEs”, and the Carbon Trust Standard SME Online Certification designed to help small businesses demonstrate verified reductions in their carbon footprint.5
Another free online tool developed by the commercial bank NatWest is the NatWest Carbon Planner, designed to help UK businesses – regardless of whether they are NatWest customers – measure their carbon emissions and identify opportunities for cost and carbon savings. The tool was developed with input from over 2 000 businesses and guides users through four practical steps to help them on their decarbonisation journey: inform, diagnose, plan and deliver. In its first year, the NatWest Carbon Planner was used by over 4 400 businesses and resulted in 15 360 carbon reduction actions, as reported by the bank. The NatWest Carbon Planner links emissions reduction to green finance, helping SMEs identify carbon savings and encouraging uptake of green finance instruments, such as green loans. According to the bank, the tool has had a modest but positive impact on its goal to provide GBP 100 billion in climate finance by 2025 (NatWest, 2023[13]).
Awareness-raising and training programmes
Copy link to Awareness-raising and training programmesUK Business Climate Hub (UK’s single point of net zero information for SMEs)
A variety of awareness-raising initiatives have been introduced to strengthen UK SMEs’ capacity to reduce emissions. A key initiative that consolidates existing SME support is the UK Business Climate Hub, a collaboration between the UK Government’s Department for Energy Security and Net Zero, businesses, and business groups including the Broadway Initiative, a coalition of major trade associations, which also manages the platform. The UK Business Climate Hub is a partner of the SME Climate Hub.
The online platform aims to streamline the range of support tools available to help UK SMEs decarbonise while simplifying the often-complex support landscape. Previously, industry stakeholders had launched a separate platform at zerocarbonbusiness.uk. However, the Department for Energy Security and Net Zero successfully negotiated the closure of that site, leading to a merger of resources into the UK Business Climate Hub (UKERC, 2024[14]).
The UK Business Climate Hub website provides detailed guidance for SMEs, which can be filtered by 18 different sectors as well as thematic areas such as electric vehicles, waste, and supply chains. To illustrate, this guidance includes detailed information on the largest sources of emissions for each of the sectors, as well as both short-term and long-term action plans to improve the businesses’ energy performance. The advice also covers indirect emissions helping SMEs select greener suppliers and reduce downstream emissions. Information on financial support tools on the national and regional level, advice on how to hire an external sustainability consultant, and training opportunities are presented in a separate section of the website.6
Green skills training and advice opportunities for SMEs
UK SMEs can access a variety of advice and training opportunities through the website. Most training is delivered online and is available in both accredited and non-accredited formats, with some supported by local business organisations. Free and flexible online training opportunities, promoted on the UK Business Climate Hub website, are offered by both publicly funded universities and private companies. These courses cover a wide range of topics, including emissions reduction, sustainable innovation, and green finance. An important gateway to advice is provided through “net zero” events for businesses, which are promoted in a dedicated section of the website. These events include local sustainability meetups, which offer opportunities for businesses to learn about and get involved in regional sustainability initiatives.
Specialised programmes known as Green Skills Bootcamps offer UK SMEs more in-depth green skills training requiring a longer-term commitment. Typically delivered in person over a period of up to 16 weeks, these bootcamps provide industry-relevant and sector-specific skills development, particularly for renewable energy workers (see Box 1).
Box 1. Green Skills Bootcamps
Copy link to Box 1. Green Skills BootcampsGreen Skills Bootcamps form part of the UK’s lifetime skills guarantee which was launched in 2020 as part of the government’s plan for jobs to transform the adult education system. Job seekers who complete the 16-week courses are guaranteed a job interview, as these programmes are developed in close collaboration with businesses. For SMEs, 90% of the training cost is government-funded, with a 10% contribution required.
An Excel list of training providers is available online for employers, including SMEs. These providers can be contacted to support staff recruitment (e.g. by interviewing learners who have completed a Skills Bootcamp). They can also co-design bootcamps to address specific green skills shortages or identify suitable training opportunities for existing employees. In particular, the Green Skills Bootcamps, delivered by the private training provider B2W group, are designed to address increasing demand for green skills in the renewable energy sector.
Air Source Heat Pumps Skills Bootcamp
This nine-day bootcamp targets existing gas engineers and aims to develop their skills in installing and maintaining air source heat pumps in residential properties. It is a foundational programme that provides introductory knowledge for participants before they pursue the formal heat pump qualification.
Smart Metering Skills Bootcamp
The Smart Metering Skills Bootcamp is a 16-week programme leading to a diploma in Smart Meter Engineering. It includes six weeks of in-centre training, two weeks focused on electrical meters and four weeks focused on gas, followed by ten weeks of in-field mentoring. During the mentoring phase, participants work alongside experienced engineers to complete an online work portfolio.
Investment support programmes
Copy link to Investment support programmesTransition from EU (regional) funding to national funding after Brexit
In the past decade, investment support for UK SME decarbonisation has predominantly been distributed at the local level through local and regional governments. This decentralised approach reflected the major funding source, the European Regional Development Fund (ERDF), which was administered by the Department for Levelling Up, Housing and Communities (now the Ministry of Housing, Communities and Local Government), which is responsible for regional development policies.
To illustrate the levels of support, ERDF programmes in England distributed GBP 123 million in funding targeting SME energy efficiency and decarbonisation measures between 2014 and 2020. However, the use of ERDF funding largely varied across the UK, creating a patchwork of programmes. For example, while Scotland provided consistent support for SME energy efficiency measures, Wales allocated the ERDF funding on programmes for eco-innovation and community energy programmes (UKERC, 2024[14]).
Following Brexit in 2020, the Shared Prosperity Fund partially replaced the ERDF, while offering relatively smaller support for SME energy initiatives and operating in a more centralised manner. Since 2021, this centralisation has driven increased activity at the national level, primarily led by the Department for Energy Security and Net Zero (UKERC, 2024[14]). In 2021, the government published its national “Net Zero Strategy”, which includes policy proposals to support SME decarbonisation (HM Government, 2021[15]). One of these proposals is the Small Business Energy Efficiency Scheme, which has not yet been fully implemented. A pilot version of this scheme, known as the Business Energy Advice Service (BEAS), is currently underway in the West Midlands and is described in a section below.
Selected examples of funding support for SME decarbonisation across the UK
Despite the recent focus on centralised, UK-wide initiatives, national bodies and local authorities continue to play a vital part in providing financial support for SMEs to decarbonise across the UK. UK SMEs can access a variety of regionally tailored grants and preferential loans, which are funded through local programmes or the UK Shared Prosperity Fund. Many grant and loan support programmes are technology-neutral, focusing on support for energy efficiency measures and installation of renewables such as solar panels. They are often combined with advisory support such as (partly) free access to consulting services and energy audits.7 The analysis of 282 UK programmes aimed at reducing emissions of SMEs, which were in place before 2023, highlights the importance of this combination of financial and ‘soft’ support. The analysis shows that, in addition to financial support in the form of grants, SMEs most frequently accessed online tools, energy audits, events, training and one-to-one advisory services, which were often facilitated or co-ordinated at regional and local levels (Enterprise Research Centre, 2023[16]).
Business Energy Scotland, a Scottish Government-funded initiative, illustrates this combination of support. The programme gives SMEs free access to a dedicated Business Energy Advisor. This advisor is supported by a team of technical specialists who carry out energy audits and prepare personalised recommendations for improving energy efficiency. These recommendations identify 24% of energy savings potential per business on average.8 SMEs can use the report to apply for funding from the Scottish Government’s SME Loan Scheme, which provides cashback grants covering up to 75% (up to GBP 20 000) of the cost of energy efficiency investments.
Other grant schemes are technology-specific. For example, the Boiler Upgrade Scheme, which is currently available in England and Wales, provides grant funding of up to GBP 7 500 towards the cost of modern heat pumps. Funding support also extends beyond energy efficiency and renewables to green mobility. For example, the Workplace Charging Scheme, available across the UK, provides small grants for businesses to install EV charging points, offering GBP 350 per socket.
Moreover, multiple loan schemes are available such as the Green Business Loan Scheme delivered through the Development Bank of Wales. This scheme combines fully or partly funded consultancy services with access to preferential green business loans with discounted fixed interest rates for energy efficiency measures and low-carbon heat installations.
Grant support uptake by measure
Although the introductory section identified grants and subsidies as key drivers of resource efficiency action in UK SMEs, these funding mechanisms tend to focus on the adoption of specific technologies and may overlook broader process improvements or management-driven energy efficiency strategies. Data collected from six regional business support projects in the UK, running from 2016 to 2023 and involving close to 2 000 SME beneficiaries and GBP 4.1 million in grant funding, revealed that LED lighting was the most frequently supported investment (39%), followed by solar photovoltaic installations (23%) (UKERC, 2024[14]) (Figure 6). The analysis highlighted concerns about the high proportion of public expenditure allocated to LED lighting, especially in commercial buildings, where the market is already well-established and payback periods are short, suggesting lower additional impact of public funding.
Figure 6. Grant funding by measure for six selected ERDF projects (2016-2023)
Copy link to Figure 6. Grant funding by measure for six selected ERDF projects (2016-2023)
Note: Data collected as part of the Governance for SMEs Net Zero (GoZero) project. The graph shows data from six regional business support projects running from 2016-2023, involving 1 940 SME beneficiaries and more than GBP 4.1 million worth of grant funding.
Source: UKERC (2024[14]), Where Next for SMEs and Net Zero?, https://d2e1qxpsswcpgz.cloudfront.net/uploads/2024/06/UKERC-Where-Next-for-SMEs.pdf.
Despite numerous initiatives in place, it is important to highlight that the consistent outreach to SMEs across the UK remains a significant challenge, largely because the small business support system remains fragmented. A recent report reviewed 218 net zero support initiatives targeting SMEs in England and found that uptake was typically below 1% of the total SME population and support was quite unevenly distributed (Enterprise Research Centre, 2023[16]). To increase outreach, efforts are underway to scale successful support nationally, including through the testing of new pilot programmes such as the Business Energy Advice Service (BEAS).
The Business Energy Advice Service (pilot programme)
The Business Energy Advice Service (BEAS), launched in January 2024, is a pilot programme, funded by the UK government with an overall budget of GBP 24 million. It offers SMEs in the West Midlands with annual energy consumption of at least 25 000 kWh with free energy assessments.9 Following the energy assessment, SMEs can access match-funded grants of up to GBP 100 000 for improvements such as renewable energy systems, heating and ventilation upgrades, building insulation, and energy-efficient lighting. This means SMEs are required to cover only 50% of the investment costs. The selection of the West Midlands as the pilot region was made due to its large concentration of advanced manufacturing companies, which are typically more exposed to high energy costs (West Midlands Combined Authority, 2024[17]).
An internal evaluation of the BEAS programme found that it has successfully enrolled 1 763 businesses and conducted 922 detailed energy assessments after one year. These efforts have resulted in an estimated energy saving of approximately 87 870 MWh which is equivalent to the annual electricity consumption of around 8 000 UK households.10
Selected examples of funding support for green entrepreneurs and innovative SMEs
In addition to financial support for a broader group of SMEs, targeted grants are also available to support eco-innovation and innovative SMEs and entrepreneurs. One of the flagship programmes in this area is the UK’s Energy Entrepreneurs Fund (EEF). This fund targets innovative SMEs that have made significant investments in R&D in disruptive technologies relating to energy efficiency, power generation and heat and electricity storage. Since its launch in 2012, the EEF has provided GBP 72 million in grant funding across 156 projects (HM Government, 2021[15]). Support for green entrepreneurs also includes equity instruments, such as large venture capital funds. For example, there is a GBP 101 million fund, called the “Clean Growth Fund”, that invests in the most promising early-stage clean technology ventures in the UK.11
In addition to these UK-wide flagship programmes, innovative green SMEs can access further funding support at the local level. One example is the GBP 2 million ‘Green Entrepreneurs Fund’, which provides targeted grant support to regional businesses in Derbyshire County in the East Midlands since 2021. The fund, financed through Derbyshire County Council’s COVID-19 Recovery Fund, is delivered through three different schemes: a Demonstrator Scheme, offering grants of up to GBP 200 000 for innovative low-carbon projects with large-scale impact potential; a Small Grants Scheme, providing up to GBP 20 000 to support businesses adopting low-carbon practices, products, or services; and a Scholarship Scheme, offering grants of up to GBP 1 500 for individuals pursuing training in low-carbon skills. Since its launch, the programme has supported over 70 SMEs across Derbyshire and is forecast to achieve a carbon reduction of approximately 1 610 tonnes (Derbyshire County Council, 2025[18]).
Compliance with sustainability reporting requirements (SRR)
Copy link to Compliance with sustainability reporting requirements (SRR)Legal requirements and reporting challenges for UK SMEs
Currently, SMEs in the UK are not legally required to report their emissions or other environmental impacts. However, large companies are mandated to report their energy use and carbon emissions, including Scope 3 emissions, under the Streamlined Energy and Carbon Reporting (SECR) framework (Gov UK, 2019[19]). SMEs may face growing indirect pressure from larger companies that need emissions data from their supply chains, particularly considering tightening international requirements such as the EU’s Corporate Sustainability Reporting Directive (CSRD). The UK’s 2023 Green Finance Strategy also confirmed plans to introduce Sustainability Disclosure Requirements (SDR), with consultations starting in 2025 and implementation scheduled for 2026 (HM Government, 2023[20]). Although the direct impact on SMEs is still unclear, future emissions reporting expectations are likely to increase.
A recent study by the non-profit organisation Icebreaker One (IB1), sponsored by the British Business Bank, conducted a comprehensive review of 270 carbon reporting tools available to SMEs. The study found a wide range of tools suited to various budgets and functionalities, including web-based emissions calculators, product-specific solutions, and supply chain engagement platforms. However, SMEs continue to find this landscape difficult to navigate. While affordable options are available for usually less than GBP 500 per year, 65% of SMEs report that current reporting standards are overly complex and 71% of UK SMEs could not recommend a single reliable website for net zero guidance (IB1, 2024[21]). Consequently, the key challenge remains in harmonising standards and consolidating support tools to simplify sustainability reporting for SMEs.
Bankers for Net Zero’s “Project Perseus” and the new “UK SME Voluntary Emissions Standard”
This is why the UK government has partnered with Bankers for Net Zero, a non-profit organisation, the British Business Bank and a range of industry stakeholders to automate SME sustainability reporting on a national scale. The collaboration will develop a common data-sharing platform for energy and emissions data (HM Government, 2023[20]).12
As data sharing raises transparency concerns, the key purpose of the project is to establish standardised rules and processes that enable automated and comparable sustainability reporting while minimising the effort required from SMEs. Once these rules are in place, the available data and processes aim to support the development of higher-quality products and services at scale, such as accounting platforms, emissions calculators, and reporting software. This could also support better investment decisions and help unlock green finance for SMEs. In its first phase in 2024 and 2025, the project aims to automate access to SME electricity (smart metering) data.
In June 2025, Bankers for Net Zero, in co-operation with the Broadway Initiative (a coalition of leading trade associations working to deliver the UK’s net zero goals), launched the UK SME Voluntary Emissions Standard. The new standard aims to provide SMEs with a simple, credible, and scalable framework for sharing consistent emissions data, making voluntary reporting more practical for SMEs (Broadway Initiative and B4NZ, 2025[22]). The framework aims to set clear expectations for emissions data requests while also enabling a “create once, share many” approach to reduce duplication and ease the compliance burden for SMEs dealing with multiple entities.
References
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[11] SME Climate Hub (2025), Mobilizing Small Businesses to Net Zero - 2025 Survey, https://smeclimatehub.org/the-sme-climate-hub-survey/#readMore.
[6] UK Gov (2024), Business population estimates for the UK and regions 2024: statistical release, https://www.gov.uk/government/statistics/business-population-estimates-2024/business-population-estimates-for-the-uk-and-regions-2024-statistical-release.
[14] UKERC (2024), Where Next for SMEs and Net Zero?, https://d2e1qxpsswcpgz.cloudfront.net/uploads/2024/06/UKERC-Where-Next-for-SMEs.pdf.
[17] West Midlands Combined Authority (2024), £24m scheme to help West Midlands businesses reduce energy usage and bills, https://www.wmca.org.uk/news/24m-scheme-to-help-west-midlands-businesses-reduce-energy-usage-and-bills/.
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Notes
Copy link to Notes← 1. For further information, see the IEA country page for the United Kingdom: https://www.iea.org/countries/united-kingdom/renewables .
← 2. The 2025 SME Climate Hub survey (SME Climate Hub, 2025[11]) surveyed 471 SMEs worldwide and across industries, 54% of which from the UK.
← 3. For further information, see: https://smeclimatehub.org/the-sme-climate-hub-survey/#readMore .
← 4. For further information, see: https://www.carbontrust.com/our-work-and-impact/guides-reports-and-tools/sme-carbon-footprint-calculator .
← 5. Data on the uptake of this tool and the SME Carbon Footprint Calculator was not publicly available.
← 6. For further information, see: https://businessclimatehub.uk/browse-by-theme/ .
← 7. UK SMEs are exempted from mandatory energy audits, as the UK’s Energy Savings Opportunity Scheme (ESOS) mandates energy audits only for large companies with over 250 employees or a turnover above GBP 44 million.
← 8. For further information, see: https://businessenergyscotland.org/get-support/ .
← 9. For further information, see: https://www.businessgrowthwestmidlands.org.uk/support-programmes/business-energy-advice-service-beas/#blank .
← 10. For further information, see: https://www.businessgrowthwestmidlands.org.uk/articles/beas-achievements-in-2024/
← 11. For further information, see: https://businessclimatehub.uk/browse-by-theme/ .
← 12. For further information on Project Perseus, see: https://www.gov.uk/government/publications/environmental-reporting-guidelines-including-mandatory-greenhouse-gas-emissions-reporting-guidance .