Delivering a Net Zero Strategy for Growth Companies

The stage has been set. The UK is legally committed to net zero by 2050, with an interim 81 per cent GHG reduction target by 2035.

As such, growth companies, which are responsible for 50 per cent of UK business-driven emissions, have a unique opportunity to embed sustainability early, integrating decarbonisation into their strategy and operations in a manageable, cost-effective way that evolves as they scale.

Why Net Zero Matters for Growth Companies

Growth-stage businesses face increasing pressure to integrate sustainability into their business models. But net zero strategies should be proportionate to a company’s size, maturity and resources, while ensuring early action in key areas.

So what are the considerations for growth-stage companies to begin their net zero journey without overwhelming resources?

Investor Expectations

Investors are now embedding Environmental, Social, and Governance (ESG) criteria into funding decisions. What’s more, businesses may need to measure and disclose carbon footprints, develop a net zero roadmap, and implement ESG-driven 100-day plans post-investment.

When you consider that 83 per cent of M & A leaders would pay a three per cent premium for companies with strong ESG credentials, the motivations for getting ahead of net zero are clear.

Businesses may also want to access ‘Green Capital’ which may align them with new and different investors. It can also unlock access to debt finance which may offer lower borrowing rates.

Customer Expectations

Much of what drives a business’ strategy is down to meeting customer expectations. Unsurprisingly, large corporations and public sector buyers are enforcing net zero procurement and reporting obligations on suppliers.

Many customers also expect suppliers to adopt Science-Based Targets (SBTi) for emissions reduction, while public procurement increasingly requires carbon reduction plans, such as PPN 06/21 Carbon Reduction Plans and Transition Plan Taskforce (TPT)-aligned strategies.

Competitive Advantage & Business Resilience

There’s no escaping the fact that ethical, sustainability-driven businesses are more attractive to customers and employees. This can also play a significant part in talent attraction and retention, with one in three young professionals (18-24) declining a job offer due to weak ESG commitments.

Sitting above all of that is the regulatory landscape. Emerging corporate sustainability regulations will soon affect businesses through supply chain obligations, making it imperative for businesses to make significant inroads into their sustainability strategies.

A Practical Approach to Net Zero for Growth Companies

Growth businesses must start their net zero journey with realistic, cost-effective actions that can be implemented now, and scaled as the company grows. Not everything needs to be done immediately, but certain actions should be taken early to ensure future flexibility and resilience. So what are they?

Immediate, Low-Cost Actions:-

• Implement quick wins such as energy efficiency upgrades (e.g. LED lighting, heating optimisation, waste reduction).
• Make public sustainability commitments without committing to full net zero targets yet.
• Improve carbon literacy by training staff on sustainability fundamentals.
• Establish basic emissions tracking to understand where the biggest impacts lie.

Develop a Net Zero Roadmap

• Conduct a carbon footprint assessment that aligns with the company's size and capabilities.
• Identify high-emission hotspots in operations and supply chains.
• Develop a phased decarbonisation strategy with short and long-term milestones that evolve as the business grows.
• Begin engaging key stakeholders (investors, suppliers, customers) in sustainability discussions.

Future-Proof Your Business

• Horizon scan for emerging sustainability opportunities (e.g. green transport, low-carbon energy).
• Establish review mechanisms to measure progress, refine strategies and communicate achievements.
• Engage stakeholders internally and externally to strengthen relationships and enhance credibility.
• Monitor policy and regulatory developments to stay ahead of evolving requirements.

Small steps; bit-sized action

Growth-stage businesses do not need to implement an entire net zero strategy immediately, but early, proportionate actions as well as having an individual with clear responsibility (across the business) are critical.

By taking bite-sized, manageable, cost-effective steps now, companies can improve profitability through energy savings, while aligning with investor and customer expectations to secure funding and contracts.

In addition, it helps to build resilience in a changing market. By demonstrating strong ESG commitments, it also allows businesses to attract top talent.

Starting small, but embedding sustainability early, ensures businesses avoid costly retrofitting later, while positioning for long-term growth and competitive advantage.

• You can contact Paul Hughes on +44 (0)7909 679 953 or email him at: paul.hughes@bdo.co.uk