Tim Rook, with his extensive 16-year experience spanning both traditional industrial and renewable energy sectors, currently holds the position of Chief Markets Officer at Clade Engineering Systems. This UK-based firm is at the forefront in manufacturing air source and propane heat pumps, which are integral in enhancing decarbonisation efforts in residential and commercial settings. In this article, Rook delves into the critical role of small and medium-sized enterprises (SMEs) in combating climate change and highlights the risks associated with inaction.
According to the Federation of Small Businesses (FSB), small to medium enterprises form the backbone of the UK’s economy, making up 99.2% of all business entities, contributing to half of the private sector’s turnover, and employing 60% of the workforce. Given their vast reach and influence, small and medium-sized businesses lie at the heart of the UK’s mission to achieve decarbonisation.
The government’s ambitious Net Zero target for 2050 is commendable, but the onus largely falls on SMEs to drive this national objective forward. These businesses must actively engage in sustainable practices and shift towards renewable energy sources to effect genuine change. However, they encounter significant financial obstacles and often lack awareness of available support.
The starting point
Many businesses are eager to contribute to this cause but are uncertain about how to begin. Thankfully, raising awareness is relatively straightforward, with numerous resources available, including the UK government’s Business Climate Hub, various grants, and information on renewable technologies like heat pumps and solar energy.
The real challenge for many SMEs lies in the prohibitive costs of these sustainable solutions, particularly in the current economic environment. While the long-term benefits of renewable technologies are clear, the initial investment is often beyond the reach of smaller enterprises.
While budgetary constraints and limited knowledge are understandable barriers to progress towards Net Zero, less excusable is the inaction of businesses that have the means and awareness but choose not to act. This inaction can often be attributed to what’s known as the bystander effect.
Understanding the bystander effect
Coined by social psychologists, the bystander effect – in simple terms – refers to the phenomenon where individuals are less likely to take action when others are present, assuming that someone else will intervene. This leads to a diffusion of responsibility and, collectively, to inaction.
This phenomenon is also observable in the business response to climate change. It is understandable, as individuals, that one might be daunted or overwhelmed by the concept of climate change, and perhaps even question the impact one person can really have just by making sure your recycling goes in the correct box outside your home. These actions may seem somewhat insignificant, but collectively, they are crucial in the fight against climate change, and their impact is substantial.
From a business perspective, making a genuine change to any aspect of your operations presents challenges – especially when you consider the short-term potential pain in cost and challenges in traversing the adoption of new methods by staff and customers. Change in any form costs time, resources and cold, hard cash.
The journey to Net Zero for businesses involves substantial operational changes, financial commitments, and shifts in staff and customer behaviour. It is here, facing these challenges, that smaller business owners might fall victim to self-reassurances that as their contributions to decarbonisation would be “minimal” compared with those of larger businesses around them, they needn’t take action.
When only one business adopts this mindset, the overall effect is minimal. However, if every small business adopts a passive stance, it significantly impedes progress towards decarbonisation. This is a line of thinking that small businesses should be wary of, and seek to avoid.
Counteracting the bystander effect
Decarbonising the commercial sector is not only feasible, but essential for the planet’s long-term wellbeing. SMEs must actively work against the bystander effect by taking definitive steps to reduce carbon emissions.
The UK Business Climate Hub offers guidance to the 5.5 million SMEs, advising on renewable energy solutions like air source heat pumps and strategies to reduce energy costs. Investing in commercial heat pump technology, particularly air source models, is an environmentally friendly and strategic choice for businesses, aligning with the UK’s Net Zero 2050 goal by reducing emissions and operational expenses.
The business benefits to Net Zero
The impact of climate change on us all is here to see around the world. There has been a political focus on reducing carbon emissions for quite some time, and smaller businesses are an integral part of the UKs plans to meet net zero emissions targets by 2050. For small businesses, net zero means sustainable services, products that are made from sustainable materials, thorough insulation within workplaces, the promotion of public transport, sustainable distribution and shipping of products, and the use of renewable energy sources, such as commercial heat pumps.
Enhance your business reputation: the modern consumer is more likely to become a long-term customer of a brand that works in a genuinely sustainable way with a focus on green credentials.
Reduce energy costs: by installing commercial heat pumps, solar panels, or other types of renewable energy sources at your business, you will significantly reduce your energy consumption and bills.
Become more attractive to investors: in the way the modern customer is more attracted to a business that operates sustainably, the same can be said about investment opportunities.
Stability in process: by adopting electric vehicles or renewable energy sources you can become more self-sufficient and less reliant on sources of power that can be impacted by volatile markets and disruptions.
While interest in Net Zero is growing among UK enterprises, the bystander effect poses a threat to this momentum. To ensure that sustainable practices are adopted widely and effectively, it’s vital that key players, including renewable energy suppliers and heat pump manufacturers, collaborate to support and motivate SMEs in adopting sustainable business models.
