**4. Results**

The UK was the first major economy to pass a net zero emissions law via legislation in 2019 [58]. This target commits the UK to a legally binding target of net zero emissions by 2050. Although this is an ambitious target, a climate emergency is driving several other economically advanced countries to commit to deep reductions in net emissions. For example, Sweden and Scotland have committed to net zero by 2045, and Denmark, France, and New Zealand by 2050. A majority of the academic and grey literature we uncovered emanated from the UK because of its ambitious agenda and the net zero emissions law.

To put the situation in the UK in context, CO2 emissions in the UK increased by 6.3% to 341.5 million tonnes (Mt), and total greenhouse gas emissions by 4.7% to 424.5 million tonnes of carbon dioxide equivalent (MtCO2e) between 2020 and 2021 [38]. Although total greenhouse gas emissions in the UK are 47.3% lower than they were in 1990 [38], they are nowhere near net zero. To combat this, government environmental regulations could restrict the use of GHG-intensive technologies [59]. Environmental taxes, such as the Emission Trading System (ETS) could also increase the cost of operating pollution-intensive processes and technologies. However, 99% of the EU27's non-financial businesses are SMEs, the majority of which are not covered by ETS, the core policy tool used in the EU for reducing greenhouse gas emissions in Europe [60].

A UK Emissions Trading Scheme (UK ETS) replaced the UK's participation In the EU ETS on 1 January 2021, but data on SMEs who participate in this scheme are not available [61]. In the same vein, the government could stimulate green innovation through policies that provide incentives in the form of subsidies and grants that shift investments towards green R&D [62]. These kinds of incentives are highly relevant to SMEs because even though large corporations play a pivotal role in making green innovations more acceptable, SMEs are more prone to generate and implement radical green innovations [63].

A UK government study found that SMEs could save up to 25% of their energy consumption through cost-effective efficiency measures including upgrading building fabric, replacing lighting, heating and cooling equipment, and other process machinery; and implementing energy management systems [6]. SMEs can recoup their investment in implementing these measures through energy savings within a few years [64]. Moreover, the same study estimated that 37% of the savings could be achieved with zero capital investment [65], including turning down thermostats and switching off electronic equipment. Carbon emissions from electricity use can also be reduced by shifting the time of day at which energy-intensive processes are carried out.

Cleaner production technologies can modify the production process and stimulate the adoption of carbon-reducing practices, but net zero practices vary in their effects on environmental and business performance. For example, research from Germany indicates that only those net zero practices that increase production efficiency significantly can boost business performance [66]. SMEs can update their practices by considering best practices in green purchasing and procurement, sustainable supply network management, green transportation and logistics (including for employees), and green packaging and storage [30,67]. In the same vein, investing in net zero business training allows businesses to adopt a systematic approach to increasing the environmental awareness of employees. This also helps businesses to appraise, structure, and enhance the knowledge and capabilities of employees on environmental matters [68].

There is extensive literature addressing the reasons why it is difficult to improve the environmental performance of SMEs, and the dominant framing for this is as barriers and drivers [6,30]. The barriers and drivers approach provides a suitable and organised way of investigating the challenges linked with reducing the environmental impact of SMEs. It has also influenced the design of policy interventions in the UK and internationally [30,49]. We present the dominant barriers and drivers in Table 2.

**Table 2.** Barriers and drivers for SME net zero activities (Source: Authors' analysis).


However, the concept of barriers and drivers in this context has been criticised, arguing that they fundamentally misunderstand organisational behaviour by assuming they are 'rational' economic actors. Understanding organisational behaviour as the outcome of a much wider set of socio-technical factors offers a more useful approach, which can more effectively inform policy [50].
