“From Brexit and COVID-19 to energy pricing and the cost-of-living crisis, SMEs have had a lot to contend with over the past eight years or so. As a result, the ability to prioritise climate action, while important, has been incredibly difficult.”

That assessment comes from Sadie Hodgson, Sustainability Manager at Better Bankside – one of more than 330 UK Business Improvement Districts (BIDs), specially defined areas in which local businesses pay a levy towards schemes designed to boost trading conditions.

BIDs aim to channel collective action into results. And one important role they can play is to help member SMEs plug knowledge gaps on issues that affect them all.

With that in mind, Better Bankside launched the Southwark Climate Collective (SCC) in October 2023. The SCC is looking to build on the success of the Business Climate Challenge – a Mayoral initiative of five years ago that supported the efforts of 19 Bankside pilot SMEs to decarbonise and reduce energy use.

Through a blend of low- and no-cost solutions, the pilot companies lowered their energy consumption by an annual average of 16% – or around £8,300 in bills – while together saving 213tCO2e of emissions.

In 2022, the Challenge was expanded to more than 200 SMEs across London. The following year, Better Bankside launched the SCC to provide businesses in its catchment area with targeted advice and support on decarbonisation.

Bringing together a cross-borough partnership of public bodies and business groups, the SCC pools resources, advice and relationships with the aim of achieving a 1,204tCO2e reduction in local carbon emissions by March 2025.

So far, it has drawn 160 signups, from small food outlets to well-known attractions. And one knowledge gap it is eager to help owners address is what upcoming climate regulations are likely to mean for their businesses in areas such as reporting.

Practical actions

“The current picture is extremely unclear,” Hodgson says. “There’s no climate-based regulatory framework for SMEs and no timeframe for when it will come in – apart from a broad expectation that it will certainly arrive at some point in the future.

“A big risk here is that larger companies’ tendering processes will require businesses to be reporting against Scopes 1, 2 and 3, and SMEs won’t have the ability to do so – which means they could miss out on potentially valuable contracts,” Hodgson warns. “The challenge is to get SMEs supplier-ready and prepared for that change, without any real understanding of when it will come, or what it will look like.”

The SCC takes a consultative approach to demystify basic elements of carbon management, ensuring that its member SMEs will not be struggling to comply with future regulations from a standing start. SMEs can choose to take part in one of four workstreams – energy, freight, waste and supply chains – depending on which one they feel is most relevant to their challenges, knowledge gaps and business models. SCC technical partners carry out a professional carbon audit, data from which is used to create a series of recommendations.

Hodgson explains: “This provides them with an initial baseline – for example: ‘here are the carbon emissions associated with your supply chains and here are some practical actions you can take to reduce them.’ That demonstrates to owners the benefits of engaging with climate data – particularly if there are cost savings, if it’s raising efficiencies and if it’s breaking down initial barriers to reporting. So, perhaps when we have a better idea of what the changes will be, compliance will be less of a step forward for them.”

Carbon literacy

In addition to the recommendations, SCC’s technical partners provide member SMEs with one-to-one guidance on a range of carbon topics, including aspects of reporting. That advice is bolstered with sessions from specialist, local training providers.

“We’ve got carbon literacy training and we’re making toolkits,” says Hodgson. “Plus, networking is quite a big part of what we’re trying to do – it’s important to bring this community of businesses together so they can learn from each other.”

The breadth of SMEs in the programme ranges from iconic institutions, such as Shakespeare’s Globe, Southwark Playhouse, Southwark Cathedral and Neal’s Yard Dairy, alongside cafes, pubs and architects’ practices. “Each of them will be affected in different ways when it comes to reporting. So, for us, it’s about recognising that the scale of the challenge is quite big,” Hodgson says.

‘Neighbourhood approach’

SCC’s programme lasts for one year, with the ambition that its support mechanisms will eventually equip SMEs to take voluntary action on their own initiative and self-monitor progress. Better Bankside is already beginning to scope out what the programme will look like next year, once its current funding stream ends. But it wants to find ways to help its first cohort of businesses continue their sustainability journeys beyond that initial year.

The partnership also wants to put any lessons that emerge from the programme into the public domain, for the benefit of local authorities. “We’re going to make those learnings accessible online, so they’re as easy to find and joined-up as possible. For us, it’s about championing a ‘neighbourhood approach’ to net zero. Lots of UK councils have declared climate emergencies. Most of those would have created climate action plans that require them to support businesses. But not all of those plans will set out exactly how.”

SCC is also eager to focus on diversity. Bearing in mind that Southwark has one of the largest Black populations in London, ensuring the programme reaches minority-owned businesses is important, Hodgson says. “What can we do to tap the expertise of local business forums, in the vein of SE5 in Camberwell? And how can we harness networks and partnerships so that those businesses will feel seen and heard in this programme?”