The Institute of Directors has published a white paper titled “Green Incentive: How to Put Net Zero at the Heart of Business Planning”.
The policy paper outlines four specific medium-term recommendations that will motivate businesses, especially small businesses, To play their part in decarbonizing the economy.
The government has set a national climate change target of net zero by 2050. However, there The lack of effective incentives and support for small and medium-sized businesses to achieve the same net zero.
Therefore, the IoD calls on the UK government to:
- Be honest that they want every company to achieve net zero in their operations.
- Provide, with several years’ notice, a lower corporate tax rate for organizations that achieved net zero, compared to those that did not.. This recommendation does not necessarily require an increase in the use of taxpayer resources or, on the contrary, a necessarily increase in taxes on other companies. What is important is that there is a gap between the two to serve as a clear financial incentive to achieve the desired change.
- Develop a methodology for accounting for the carbon footprint, in line with the current approach to announcing the company’s earnings. Limited companies will be required to keep and report records of their carbon footprint and use the information to determine their eligible corporate tax scope.
- Conduct an assessment of the adequacy of the support available to companies to become net zero. Additional measures should be considered, such as the development of a recognized Kitemark scheme for businesses to indicate their progress on the path to net zero, robust career paths for zero carbon consultants, and actions to fill reporting gaps such as the requirement for established commercial landlords to inform SME tenants of the carbon impact of their use in buildings.
Kitty Usher, chief economist at the Institute of Directors and author of the report said: Since the government introduced its net zero target, there has been no organized political initiative designed to increase the number of small businesses taking their own actions. Instead, SME support for decarbonization has primarily relied on companies making an active decision to look for it.
“This does not mean that SMEs do not want to play their part. Our research shows that business leaders are keen to understand what they need to do, but there is uncertainty about the short-term business case for change, particularly given other pressing calls for available time and resources. their organization at the present time.
“Sporadic and sectoral initiatives can only go so far. By creating a future wedge between the corporate tax paid by those companies that are not net zero and those that are not, there will be a clear incentive for all companies to achieve the desired change. If implemented, we believe that this A small but significant change in policy would be a huge step towards achieving the climate change goal in this country.”