By Steven McAllister

WITH Glasgow hosting COP26 in just a few months’ time, we’re seeing an increasing focus in our own back yard in terms of how we can best tackle climate change across Scotland.

The Scottish Government has already set world-leading climate change targets of reaching "net-zero emissions" from carbon and all other greenhouse gases by 2045. To ensure we are on the path to success, by 2030 Scotland will need to see a 75 per cent reduction of greenhouse gas emissions compared to 1990 levels.

Business has a key role to play here, not just large multinational corporations, but also Scotland’s 360,000 SMEs. If each of these businesses can take small, practical steps to cut their emissions in half, it will have a significant impact on helping Scotland meet its ambitious targets. It will also require additional support as many SMEs will be unaware of their carbon footprint and, particularly after the financial impact of Covid, concerned about the costs to remedy the situation.

UK Government’s SME Climate Hub, a new campaign aimed at small businesses to help them cut their emissions, has been helpful in providing SMEs with tools and resources to achieve this aim. This includes practical steps such as introducing a cycle to work scheme; minimising waste from products and packaging or simply pledging to go paperless; electrifying a vehicle fleet; installing renewable electricity supply, such as solar panels or heat pumps; or offsetting the carbon that can’t be reduced.

There are however other important issues still to be addressed in supporting small business with carbon reduction measures. Achieving this typically requires investment in time, training and, perhaps, new machinery or personnel, something many SMEs will struggle to afford without support or incentives.

A carrot and stick approach, with rewards for companies that embrace net-zero objectives and penalties for those which do not, will therefore need to be considered by governments. Further means of incentivising corporate power purchase agreements (PPAs), where businesses can reduce their carbon footprint through a direct supply agreement between themselves and a renewable energy producer, must also be considered. Corporate PPAs are also an effective way for renewables developers to fund new-build projects whilst simultaneously allowing businesses to enhance their green credentials.

The Scottish Government will need to continue engaging with businesses on decarbonisation and expand on existing initiatives such as its funding of the Environmental Placement Programme which offers paid placements for graduates to do credible work in the environmental sector whilst helping their host company improve their green credentials.

COP26 will put a focus on climate change and, as the host nation, Scotland will also come under scrutiny over its contribution to this ambition. The Scottish Government should be credited for setting out ambitious targets in reducing carbon and other greenhouse gas emissions. It’s now essential it does more to encourage and reward businesses, especially SMEs, in meeting their own specific climate change obligations while penalising those which do not.

Steven McAllister is a director and renewable energy specialist at Davidson Chalmers Stewart