58 | Advanced UK
Carbon footprint reductions outlined in print
The UK shocked the world in April with the announcement that we’ll deliver cuts to our carbon emissions by 78% vs. 1990 levels. Stemming from the 2008 Climate Change Act (2008), the implications for every business will be huge. Environment, Social, and Governance (ESG), is
a complex fi eld that has been ignored by most UK SMEs whose leaders perceive it to be pertinent only to FTSE-listed corporations. T is is an error, and in due course we’ll see the commercial landscape littered with the dead and dying businesses which failed to take a proactive and comprehensive approach to ESG transformation. Even more so than regulatory requirements,
it has been larger corporations who have forced awareness and compliance with cybersecurity and data protection upon their supply chain. Now, amid the pandemic, we must add ESG compliance as a key concern for the SME wishing to win government grants, or to succeed when bidding to be a supplier to a larger, more regulated, entity.
ESG will become key to cash fl ow According to Lloyds Bank, 91% of the UK’s SMEs see sustainability as an important consideration and yet only 5% of our largest SMEs have any plan in place to capitalise on the challenges and demands of Net Zero. T e reality is that, according to Glenn Bemment, Head of ESG, SME & Mid-Corporates, at Lloyds Bank, ‘demand from government, customers, and suppliers to be ethical, and sustainable will only increase and eventually become expected rather than a unique selling point’. ESG is key to cash fl ow, the lifeblood of every
business. It facilitates top-line growth, reduces costs, minimises regulatory and legal interventions,
increases employee productivity, and optimises investment and capital expenditures. With these factors as motivation, how then to prepare for the ESG journey ahead? Everyone is fighting for revenue recovery, but has seeking to
achieve growth and preserving margins made you blind to the costs of continuing as before? Are your business practises outdated, ineffi cient, and entirely unappealing to the core values of your customer base? T e millennial generation are the largest in history and they’re in
their prime spending years. T eir beliefs are reshaping the economy and they’re already changing the ways we buy and sell, forcing companies to do business on their terms. When they choose an employer, a solicitor, a car, or when they shop for day-to-day goods and services, they’re far more inclined to consider the vendor’s overall ESG message. Ignore them at your peril! SMEs are under pressure. Firstly, there are the ESG demands from
larger corporations and government bodies when bidding for work, and it’s the millennial cohort who are reviewing the responses. T is is the 21st Century consumer, and they give preference to those fi rms which demonstrate environmental awareness. Quantifying the issue, we can refer to the survey Insider Intelligence,
Millennials Want Brands to Be Socially Responsible, 2019 by RetailMeNot, 74% of millennial internet users (aged 22 to 37) said more brands should take public stands on important social issues, and a Deloitte report found that 42% of millennials said they have begun or
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