In June 2019, the UK Government and the devolved nations committed to reducing the UK’s greenhouse gas emissions by at least 100% by 2050, compared to 1990 levels.
This target is known as Net Zero, and milestones towards moving to a Net Zero emissions economy are now set down in UK law.
By encouraging sectors, industries, organisations and individuals to work together in cutting carbon emissions, the hope is that, over the coming decades, the UK can achieve its Net Zero ambitions and, as a consequence, help reduce global warming and the effects of climate change.
Recent clients have taken steps to becoming Net Zero, whilst also purchasing the latest innovative flagship model from Porsche, the Taycan - and not only that, this small step towards Net Zero gave them significant tax benefits on the car.
CARBON NEUTRAL VS NET ZERO: WHAT IS THE DIFFERENCE?
People often use the terms ‘Carbon Neutral’ and ‘Net Zero’ as though they’re the same thing, but there is a slight difference. In simple terms, being Net Zero means adding no more greenhouse gases to the Earth’s atmosphere than the amount you’re taking out. If you’re a carbon neutral business, for example, you’re offsetting the carbon emissions you produce, perhaps by planting trees or supporting renewable energy programmes.
This doesn’t necessarily mean, however, that you’re Net Zero, as you might be not be reducing carbon emissions, only offsetting them. As explained above, Net Zero is all about helping to reduce to zero (compared to 1990 levels) the greenhouse gases already in the Earth’s atmosphere.
Scientists believe the carbon emissions produced through industry, transport and agriculture, for example, are making this worse. Net Zero is intended to help lessen these climate-changing effects and limit global warming to levels that are safer for the world’s population.
WHAT DOES NET ZERO MEAN FOR MY BUSINESS?
The Government’s stance is that taking action on climate change will help businesses grow, seize new opportunities, create new jobs, encourage investment and adapt against the challenges of a changing planet.
It also believes that by reducing emissions, businesses across the UK will be able to:
Lower their running costs – and save money as a result.
Attract new customers and investors.
Maintain a competitive advantage, both locally and globally.
Qualify for tax benefits.
Build a better, more sustainable supply chain.
Even the smallest businesses produce carbon emissions, whether it’s through their premises, the vehicles they use, or their supply chain, for example. But reaching Net Zero is about more than just balancing carbon emissions. What’s really involved here is bringing about a transformation in the way businesses of all sizes operate.
The Government won’t be able to achieve its ambitions for Net Zero without the support of the UK’s businesses. Given that small and medium-sized enterprises account for 99.9% of the business population in the UK (as of 2020), they will have an extremely vital role to play.
HOW CAN MY SMALL BUSINESS MOVE TO NET ZERO?
If you run a small business, the Zero Carbon Business website lays out a number of measures you can put in place to begin cutting your carbon emissions. Some are quick and easy, some require a bit more planning and expense.
BASIC STEPS:
Recycle More
By recycling your paper, plastic and other materials, you’re helping to reduce waste and lessen the impact on the environment.
Reduce Waste
By making less waste, or managing it more efficiently, there’s less of it going to landfill, which ultimately benefits the environment.
Make it Company Policy
Put a Net Zero plan in place, consult and train your staff, and promote your green achievements to customers and suppliers.
FURTHER STEPS:
Use Electricity from Renewable Sources
Not only does this lower your carbon emissions, but it can help you prepare for environmental laws and regulations that may come into force in the future.
Drive Less or Switch to Electric Vehicles
Given that over a quarter of the UK’s total carbon emissions are due to petrol- and diesel-powered transport, encouraging staff to walk, cycle or use public transport, and making the move to low-emissions company cars, can reduce your impact on the environment and save you money
Cut Down on Packaging
If you can avoid it altogether, great! If not, try to use natural, recyclable and recycled materials.
Make your Supply Chain Greener
By using suppliers that are lowering their own carbon emissions, and by buying products that take less energy to make, transport and use, you can reduce your business’s supply chain emissions.
CASE STUDY
Many business owners are unaware that you finance an electric vehicle as a business vehicle e.g. this is not just limited to vans or other commercial use vehicles. The release of sought after models from manufacturers like Porsche, who’s flagship Taycan has become the go-to for business owners. An electric vehicle can take your business one step closer to becoming Net Zero, we’ve seen clients change fleets of business cars and commercial vehicles to electric in recent times.
A recent client was numbers from Porsche but we managed to achieve a better monthly repayment. The finance was all sorted and ready for him upon delivery. Using one of our specialist lenders, the purchase price was £99,850.00 with £19,000 deposit achieving monthly repayments of £1067.57 with an attractive balloon payment unrivalled by any other provider.
Switching to an electric car can also bring significant tax benefits for businesses. The government has announced the tax rate for the next three years, helping businesses to plan ahead. The electric car tax on the benefit in kind rate will increase to 1% in 2021/2022 and 2% in 2022/2023.
If you feel that finance could benefit you and your business towards becoming net zero then please do not hesitate to contact one of our account managers via info@approved-finance.co.uk, call us on 01908 429888 or visit our 'Your Business Finance Guide' section of our website to download our Business Finance Guide.
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Reference:
British Business Bank. 2021. What is net zero? An introduction for small businesses. [online] Available at: <https://www.british-business-bank.co.uk/finance-hub/what-is-net-zero-an-introduction-for-small-businesses/> [Accessed 1 November 2021].