SMEs face net zero divide as 2026 ‘green’ reporting looms

SMEs across the UK are facing mounting pressure to accelerate their sustainability efforts, as new research reveals a growing “net zero divide” ahead of incoming UK Sustainability Reporting Standards (UKSRS) in 2026.

According to Aldermore’s latest ‘Green’ SME Index, only 13% of SMEs are currently on track to meet net zero commitments by 2050, having implemented formal measurements and emissions reduction strategies. Worryingly, this figure has not improved since 2024, despite regulatory deadlines and financial incentives on the horizon.

The research, conducted by Opinium among 1,000 SME decision-makers, highlights that while 24% of SMEs are actively assessing their environmental goals, the majority remain stalled, with 76% yet to take any concrete action.

The findings also expose a significant knowledge gap that threatens to derail progress. Almost two-thirds of SMEs (58%) have never heard of Scope 1, 2 or 3 emissions – key classifications under the Greenhouse Gas Protocol and a central feature of future reporting frameworks.

For many businesses, sustainability remains a daunting prospect. 82% of SME leaders say environmental requirements feel like a barrier to growth rather than an opportunity, citing a lack of expertise, limited resources, and restricted access to funding as key obstacles.

Despite these challenges, the research suggests SMEs could be leaving significant value on the table. On average, businesses estimate they could generate an additional £52,198 in annual income by adopting sustainable practices.

However, the data shows a stark mismatch between ambition and investment, with SMEs spending an average of just £5,566 investigating greener practices and only £23,715 implementing them.

Lauren Pamma, Head of Energy and Infrastructure at Aldermore, urged both government and industry to step up support: “Our research shows genuine ambition among SMEs to decarbonise, but a lack of knowledge, resource and access to capital is holding many back.

“With reporting deadlines approaching, now is the time for government, industry and finance partners to step up their support. By closing the skills gap and providing targeted funding, we can help SMEs unlock the substantial growth, energy security and cost savings that sustainability delivers.”

Aldermore has already backed several green initiatives, including a £25m funding package for Osprey Charging Network to accelerate the rollout of its super-fast EV charging hubs across the UK.