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SMEs, ISO 50005:2021 and the race to net zero

Published: 24 Mar 2022

A new standard aims to simplify the implementation of energy management systems for smaller businesses that want to assist in combating climate change. How will ISO 50005:2021 help in the race to net zero carbon emissions?

The commitment to achieve net zero carbon emissions by 2050 is at the forefront of the global environmental, social and governance (ESG) agenda, and quality organisations of all sizes have a role to play.  

Media attention tends to focus on major companies and their carbon emissions, but it is interesting to note that only one in five of the UK’s small businesses have reportedly committed to a net zero target, according to the Net Zero Barometer Report by the British Standards Institution (BSI). Given that small and medium-sized enterprises (SMEs) account for 99.9% of the UK’s business population, clearly much more must be done to ensure that all firms are committing to implementing change.  

ISO 50005:2021 Energy management systems – Guidelines for a phased implementation was published in September 2021 to support and simplify the implementation of an energy management system for SMEs in particular. While the standard shares many common elements with ISO 50001:2018 Energy management systems – Requirements with guidance for use, it does not cover all of its conditions, instead building a foundation for a business to then work towards the demands of ISO 50001:2018. 

BSI announced in December 2021 that it would partner with the Department for Business, Energy and Industrial Strategy to sponsor up to 100,000 free downloads of ISO 50005:2021 for SMEs.  

Improving energy efficiency  

Martin McTague, National Chair of the Federation of Small Businesses, has welcomed ISO 50005:2021. He said: “We hope to see this standard proving useful in pointing firms towards tangible resources that will help them improve energy efficiency. It’s important that standards like this one are made genuinely accessible for small businesses, which, unlike large firms, don’t have the resources to work through implementation documents; we look forward to working closely with BSI on that front.

Small businesses have a huge impact – both on the planet and on their communities.

“Small businesses want to play their part in the move towards net zero. The majority of small businesses have taken actions to address their energy usage, through installing energy efficiency improvements or generating energy on site. With the right support, small businesses can go further and faster in helping the UK reach its net zero targets and shore up supply.” 

Also working to facilitate significant changes in climate action by SMEs is the SME Climate Hub, a global initiative supporting such companies on their journey to net zero. It was founded by the We Mean Business Coalition, the Exponential Roadmap Initiative, the International Chamber of Commerce and the United Nations Race To Zero campaign, working in collaboration with Oxford University and Normative, the world’s first carbon accounting engine, which helps businesses calculate their climate footprint. The SME Climate Hub asks SMEs to sign a commitment to climate change and then supports businesses with free tools for climate education, measurement and reporting as they start working towards positive climate change.   

Drive for change 

A survey conducted in July and August 2021 by the SME Climate Hub was published in February 2022. It found that 63% of small business owners surveyed are concerned that they do not have the right skills and knowledge to tackle climate change. Other major concerns include a lack of time, with 40% of respondents citing this as a concern, and 48% pointing to the lack of funding for SMEs to combat climate change as a critical factor.  

The survey discovered that approximately 70% of SMEs would need to access external funds to reduce their emissions faster, or at all. Only a third of SMEs surveyed had been offered a financial incentive to reduce emissions.  

As McTague noted: “Generally speaking, incentives are the most effective way to spur change in this area, as lack of capital and unclear returns on investment are significant barriers to investment. That’s why we are calling for the launch of a ‘Help to Green’ voucher scheme – modelled on the government-backed Help to Grow: Digital strategy – which will empower companies to invest in qualifying environmental products and services.” 

There was positive news in the survey however, with eight out of 10 participants rating reducing emissions a high priority and 96% of SMEs citing ‘the right thing to do’ as their motivation for instigating climate change measures. More than 80% of businesses surveyed are working to reduce energy consumption and waste, while 64% are investing in employee education to help combat greenhouse gas emissions, and 52% are upgrading facilities and equipment.  

Combating the damaging consequences of climate change is at the forefront of the global agenda and SMEs have an integral role to play.  

This point is underlined by María Mendiluce, CEO of the We Mean Business Coalition, who said: “Taken on an individual scale, each small business has a relatively moderate carbon footprint. However, together, these small businesses have a huge impact – both on the planet and on their communities. To limit the effects of climate change, and to create a just future that leaves no-one behind, it’s imperative that every business, of every size, has the tools they need to prioritise climate action.” 

There is a long road to travel to meet the 2050 deadline for net zero carbon emissions, but ISO 50005:2021 has a vital role to play in assisting SMEs with that all-important first step.  

Did you know that less than a third of UK businesses have a net zero strategy?