The Cost of Inaction: What the 2025 Net Zero Census Means for SMEs

What the 2025 Net Zero Business Census Tells Us and Why It Matters 

UK Business Climate Hub, Planet Mark and Sage have now launched the second UK Net Zero Business Census. The largest survey of its kind; it captures decarbonisation insights from over 2,000 organisations across sectors and regions. It’s a powerful snapshot of where UK businesses stand on the journey to net zero and what’s helping or hindering them. 

The findings are both encouraging and sobering. They resonate deeply with what I hear from my clients and my wider network, many of whom feel overwhelmed by jargon-heavy documentation, restrictive and incredibly ambitious pledges or just trying to juggle a host of competing priorities during turbulent times.

Many organisations genuinely want to do their bit for the planet but are uncertain about where to start and how they are going to fund the transition. Crucially, many SMEs are still unaware of the implications of the Procurement Act, or the growing pressure from upstream and downstream partners to provide quantitative carbon data as part of their own net zero commitments.

My greatest concern for our SMEs isn’t just the cost of action, it’s the cost of inaction. Businesses that delay risk being locked out of supply chains, losing competitive edge or facing reputational and regulatory consequences they didn’t see coming.

Progress Is Happening… But Not Equally 

The census shows that 25% of UK organisations have achieved measurable carbon reductions and 59% have implemented energy efficiency measures. These are real signs of momentum. A third of businesses have switched to renewable energy and 11% have set formal net zero targets. 

But the gap between large organisations and SMEs is stark. While 54% of large businesses have set net zero targets, only 11% of SMEs have done the same. SMEs are also more likely to cite barriers like lack of time (52%), expertise (47%) and trusted information (46%). 

Cost Is Still the Biggest Barrier 

Across all business sizes, 66% of organisations say high costs are a moderate or significant challenge. Only 7% have accessed government-backed finance or support, despite widespread calls for better access to grants (41%) and tax incentives (38%). 

Despite growing demand, commercial grant opportunities for sustainability remain limited, especially for SMEs. Most funding is sector-specific, regionally restricted or tied to public institutions, leaving many businesses without viable support.  

Over the last years, grants such as LoCASE or the Levelling Up Rural Prosperity Fund have been match funded rather than absolute. Grants are too small to make a measurable difference for larger businesses and off-putting for small and fledgling businesses who could really use the decarbonisation and business growth opportunities. 

A Troubling Perception Gap

Perhaps most concerning for me is that 25% of SMEs see no business benefit to cutting emissions, compared to just 3% of large firms. This perception gap has real consequences. It can stall investment in energy efficiency, delay net zero planning and leave SMEs vulnerable to reputational, regulatory and marketplace risks.  

Businesses are still unaware of the wider marketplace demand for sustainable action- net zero is still seen as a cost rather than a strategic opportunity. I see every day the demand from larger firms increasingly requiring carbon data from their suppliers . Sadly, the result of not having this data is that they will head down the road to the next supplier who can provide accurate carbon values to their products and services.  

During uncertain economic times when directors are focused on national insurance hikes, understanding the implications of AI, geopolitical challenges and more; this is understandable but I firmly believe that those who can navigate the choppy economic waters and come through the other side with strong strides towards decarbonisation and carbon literacy will be successful in the mid to long term.