Just 13% of UK small and medium-sized enterprises (SMEs) are fully prepared for a net zero future, according to new research.

The findings from Aldermore’s latest Green SME Index suggest the transition to sustainability is stalling ahead of incoming UK Sustainability Reporting Standards, set to begin in 2026.

Despite looming regulations and financial benefits, the proportion of SMEs classified as ‘green’ has not improved since 2024, the data shows.

Over three quarters of SMEs (76%) have yet to take any meaningful action on achieving Net Zero and two thirds admit they've never heard of Scope 1,2 or 3 emissions.

Barriers to sustainability remain high, with 82% of SME leaders saying that green requirements feel like a hurdle to their operations. Yet, the potential rewards are significant, as SMEs estimate going green could add over £52,000 to their annual income.

Despite this, the average SME has spent just £5,566 exploring sustainable options and £23,715 on implementation. This gap highlights the need for more support, funding, and education to drive change.

“Our research shows genuine ambition among SMEs to decarbonise, but a lack of knowledge, resource and access to capital is holding many back," Aldermore head of energy and infrastructure, Lauren Pamma said.

"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."

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