Linking policy awareness to practice: UK Net-Zero targets and SME emissions reduction efforts

The UK government committed to achieving Net-Zero emissions by 2050, yet the extent to which the country's 5.5 million small and medium enterprises (SMEs) are aware of, understand, and act upon this policy remains uncertain. Using survey data from 1,025 UK SMEs, we employ an ordered probit model to examine how awareness, comprehension, and engagement influence emissions-reduction efforts. Our findings reveal that while 12% of SMEs are unaware of the Net-Zero target and 42% are aware but lack understanding, only 46% fully comprehend the policy's implications. Crucially, firms with full understanding are over three times more likely to actively reduce emissions than those merely aware. We also identify significant variations by firm size, sector, and region, underscoring the need for tailored, clear, and actionable government communication. These results highlight that enhancing SME comprehension – not just raising awareness – is vital for ensuring meaningful contributions towards the UK's 2050 Net-Zero goal.