- UK chapter of UN Net-Zero Banking Alliance is calling for a wholesale commitment to a simple, shared reporting framework for SMEs to support a ‘just transition’ to net zero at COP27;
- SMEs risk losing large corporate customers unless they can report on their net zero emissions – and they will need the help of banks to fund their own transition;
- A frictionless emissions reporting framework is required for SMEs to transition to Net Zero and drive sustainable growth;
- B4NZ will be hosting a programme of thought-leading events at COP27 at stand P9 in the Green Zone.
LONDON, 7 November 2022: Bankers for Net Zero (B4NZ), the UK chapter of the UN’s Net-Zero Banking Alliance, will launch a major initiative at COP27 to create a simpler shared reporting framework for smaller businesses as they move towards net zero greenhouse gas emissions (GHG).
B4NZ warns that banks will be unable to hit their net-zero targets without engaging SMEs and the UK will not achieve a ‘just transition’ unless banks, accountants and SMEs collaborate. Furthermore, SMEs will risk losing corporate customers unless they are able to report on their net zero emissions. This collaboration will deliver a scalable approach for banks and their SME customers to work together to achieve a ‘just transition’ to net zero.
Mobilising SMEs for Climate Action
SMEs are responsible for around half of total greenhouse gas emissions from UK businesses, therefore engaging SMEs will be crucial to hitting UK’s net zero targets. They are also the innovators who will come up with the technology solutions to climate mitigation and adoption. In the future, SMEs will be expected to provide greater transparency on their greenhouse gas emissions to be able to secure growth funding and unlock new commercial opportunities, but they currently don’t have the expertise, resources, or time to transition to net zero without support from their banks. As the backbone of the UK economy, a frictionless net zero reporting framework is required for SMEs to enable growth.
The ‘Mobilising SMEs for Climate Action’ workstream, led by Bankers for Net Zero, is developing practical solutions to help the UK’s almost six million small and medium-sized businesses successfully make the transition. It brings together banks, accountants, energy companies, civil society and SMEs to devise an actionable and transparent framework which will enable frictionless reporting on net zero emissions for banks and their SME customers.
B4NZ is supported by three SME delivery partners that are experts in open banking, accounting data models and sustainability reporting; Icebreaker One, Engine B, and rewired.earth. Together they are creating an open, cross-industry framework and common data standards. The solution is based on a data infrastructure model that makes it easier for smaller companies to access and use the data they need to understand and report emissions and other impacts throughout the supply chain. This supports faster decision-making, reduces costs and increases trust in data flows.
Launched ahead of COP26, B4NZ itself has now received backing from some of the UK’s largest banks, including Barclays Bank, HSBC UK, Santander, Handelsbanken, Triodos and Tide as well as the British Business Bank, and is supported by a diverse group of corporate, trade body and civil society partners.
B4NZ will be hosting a programme of thought-leading events at COP27, with guest speakers from WWF, UNEPFI, the British Business Bank, City of London Corporation, the Transition Plan Taskforce, HSBC and others.
The partners have extended an open invitation to banks, SMEs and potential partners to join them in their networking hub at stand P9 in the Green Zone, to find out more about the SME Workstreams initiative and how they can become agents for change on the road to COP28 in Dubai.
Heather Buchanan, Co-Founder and Director, Bankers for Net Zero, said: “Business is now driving the decarbonisation agenda. This will only work if there is a coordinated effort to ensure a just transition to net zero and to unlock system change in our banking system. Our high-profile members and proven delivery partners are proof of tangible progress since COP26 in Glasgow and evidence of a growing movement of private and third sector organisations taking leadership on net zero action. We have to step-up and work collaboratively if we are serious about keep global warming within 1.5 degrees.
“At COP27 Bankers for Net Zero will set out our roadmap for delivery of transformational solutions which will optimise the banks’ contribution to the real economy and give investors and business, the clarity, confidence and direction to decarbonize effectively, whilst growing the economy in a fair and sustainable way.”
Bim Afolami, MP, Bankers for Net Zero Champion, said: “The importance of the transition to Net Zero cannot be understated. It is one of the great challenges of the 21st century and requires the might of a global political consensus to achieve. This transition brings with it opportunity for greener, cleaner industries while meeting our obligations to protect the environment. For the UK in particular, ensuring that our financial sector has the skills, resources and information is crucial for all sectors to deliver on Net Zero.
“Bankers For Net Zero are at the forefront of advocating this transition. They understand the need for clarity and cooperation between the public and private sectors, and their success so far is proof of an appetite for meaningful action within the financial world.
“I am very pleased to welcome B4NZ’s ‘Mobilising SMEs for Climate Action’ workstream, which will aid our vital small and medium sized enterprises in the transition to net zero. Over 99% of UK businesses are SMEs, but they receive too little of our collective focus. B4NZ’s analysis of the barriers, benefits and benchmarks for SMEs to invest in decarbonisation is a powerful tool to mobilise finance. I look forward to seeing this pilot programme take off.”
Julia Groves, MD of Sustainability at the British Business Bank, said: “As the backbone of the UK economy, SMEs need a frictionless reporting framework on their greenhouse gas emissions to ensure they keep their customers, keep their bank accounts, and successfully transition to a net zero economy. From our research we know that, with the right support, smaller businesses have the potential to make a major contribution to the UK’s net zero targets. Cross-industry collaboration is vital to providing that support, and so we are delighted to be working with Bankers For Net Zero on this new initiative to simplify sustainability reporting for smaller businesses.”
Gavin Starks, CEO and Founder of Icebreaker One, said: “Any business that wants to cut their emissions needs access to data to get it done: data that helps them understand their current emissions, spot opportunities to reduce them, measure whether their efforts are working, and report the results. But too often, getting access to that data is close to impossible. This is the problem we’re trying to solve at Icebreaker One by creating practical solutions that help data to flow. Working in partnership with Bankers for Net Zero, we’ll be able to make sure that thousands more businesses have the data infrastructure they need to get to net zero.”
Jeff Scott, Co-founder of rewired.earth, said: “B4NZ has worked tirelessly since COP26 to ensure there can be a systemic change in how SMEs measure, monitor and report their true impact. We know climate change is already having a deeply destructive impact on people and our planet; and its ultimate consequences will be far more devastating. With time running out, we need practical solutions that turn commitments into action.
“Spearheaded by the Banks, B4NZ unites key actors from across government, academia and civil society in developing a transparent, comparable and auditable approach to properly supports SMEs. At rewired.earth, we are hugely excited about working alongside B4NZ to deliver the necessary technology, open data model and market-wide demand signals to make this a reality. Together we can develop the mechanism that will rebuild trust, drive business value and turn the markets into the most protective force on the planet.”
Shamus Rae, CEO and co-Founder of Engine B: “As carbon accounting merges with financial accounting, and assurance is increasingly required across this single data set, Engine B is happy to lend its expertise in open-source data models to this key cross industry initiative.”
Supported by the ICAEW and the main audit firms, Engine B is a UK data specialist working to expedite digitisation of the Professional Services industry and crucially, level the playing field for all organisations, large and small.