'Extremely encouraging': Why three-quarters of UK firms are now plotting net zero goals in 2021

A major survey of UK firms has found almost three-quarters of businesses plan to introduce net zero emissions goals covering their own operations and supply chains over the next year, as climate-aligned business strategies head into the mainstream, according to banking giant HSBC.

The bank, which surveyed more than 10,000 businesses in 39 markets, including 1,000 in the UK, found 73 per cent of UK respondents  plan to introduce new net zero goals, while 78 per cent expect sales to grow over the next year as a result of increased focus on sustainability.

A similar proportion - 75 per cent - of UK businesses also now have metrics in place to measure environmental sustainability, up from 62 per cent last year, putting them in a stronger position to implement ambitious net zero emission strategies, the survey suggests.

That includes 28 per cent of firms measuring energy usage, 21 per cent measuring carbon emissions, and 20 per cent measuring packaging materials and waste, according to the survey.

Rob King, HSBC UK head of sustainable finance, said the survey results were "extremely encouraging" off the back of a tough year for business in the wake of the Covid-19 pandemic, as they suggest firms have the 'green recovery' agenda at the forefront of their plans for 2021.

"The report tells us that firms genuinely want to build back better and have sustainability and the move to a net zero economy right at the top of their priority lists as they look to adapt their operations to the 'new normal'," he said. "We see consumers having increasing expectations when it comes to sustainability and the companies they engage with and this greater focus on sustainability by businesses will help them to build their reputations and make better connections to their customers."

However, many of the respondents maintained that the government has a key role to play in accelerating and supporting the green agenda among businesses. More than two-fifths - 42 per cent - of firms said government incentives would help them to become more sustainable in future, while 31 per cent highlighted workforce engagement or initiatives, and 29 per cent pointed to green finance as mechanisms for unlocking more rapid progress.

As such, King said there was "still work to do", highlighting the need for greater policy detail from the government in 2021 to build on Prime Minister Boris Johnson's recently unveiled Ten Point Plan for a Green Industrial Revolution, which promised to deliver around £12bn of public investment in the green economy as well as a raft of new policy interventions that are expected to be finalised over the coming year and beyond.

"The government announced its Green Industrial Revolution plan last month and our research suggests that firms will need further support and incentives as they strive to reach these lofty goals," King said. "With the right support and incentives UK businesses can deliver on their targets and achieve their sustainability ambitions, making a difference to their employees, customers and the global society."

Corporate engagement with the net zero transition has never been higher, but the big question remains as to how fast businesses can turn their goals into action.

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