At the Perseus 2025 AGM it was reported that Perseus is:

• evolving from ‘financing green’ to embedded sustainable finance creating a potential addressable market of £5-10 billion
• adding gas, extending energy coverage from Scope 2 (electricity) to Scope 1
• estimated, via its existing members, to have potential reach of over 1 million UK SMEs and cover over 70% of use cases
• continuing to advance ‘Perseus Ready’ implementations with commercial members
• running a live sandbox (equivalent to production) for use by Carbon Accounting Providers (CAPs) and Energy Data Providers (EDPs) to develop solutions
• working with Perseus members to develop go-to-market capabilities to support hundreds of thousands of SMEs
• exploring integration with Open Banking to enable cross-sector interoperability
• producing XBRL outputs to enable integration with financial reporting systems
• pioneering the development of a voluntary, cross-sector Smart Data scheme, aligned with the UK Data Act and supported by an openly-licensed digital public infrastructure (DPI) architecture for secure data sharing 

“Perseus makes it easier for everyone to do their carbon calculations properly, and comfortably moves us years ahead of the most stringent proposed updates to the GHG Protocol. This is exactly why Sage intends to roll out a Perseus enabled product to make reporting easier for hundreds of thousands of UK SMEs.”

George Sandilands, Vice President, Sage Earth

From financing green to embedded sustainable finance

For much of the last decade, ‘green finance’ has focused on funding individual projects: a retrofit here, a solar installation there. Important, but limited. 

Perseus marks a shift to something far more systemic: it moves beyond financing green to embedding sustainable finance by integrating trusted, verifiable emissions data directly into everyday accounting and financial decision-making.

This evolution means Perseus can be applied across the whole SME market, not just specialist green products. Rather than expecting SMEs to seek out solutions themselves – something most lack the time or expertise to do – Perseus brings trusted insights to where they are (e.g. inside their existing accounting, banking and carbon applications). 

Perseus can support lending, credit and debit products, and even savings accounts, allowing sustainability performance to be reflected wherever financial decisions are made. The impact on SMEs is significant: personalised insights, lower reporting costs, easier access to capital for energy-efficiency upgrades, and new space for financial innovation. By making sustainability data usable at scale, Perseus aims to help turn ‘net zero’ from a niche ambition into a normal feature of how the economy works.

“As a leading smart data initiative, Perseus is developing guardrails for assurable data to support finance and supply chain decisions towards a sustainable economy.”

Hannah Gilbert, Director of Sustainability, British Business Bank

In December last year, Perseus entered its pilot stage which was launched to gather feedback on the technical, legal and user experience aspects of Perseus. As part of the Pilot, the Development Bank of Wales used Perseus in its due diligence processes for green business loan products.

Today, Perseus has progressed to the launch of the sandbox, which will allow Perseus members to safely and easily experiment with sharing energy consumption data.

How it works

The sandbox uses synthetic energy consumption data, meaning organisations can test and experiment without concerns over personal data. It also provides identical trust services (Registry and Directory) to Perseus in production.  

“Successful integration with the sandbox will make a business ‘Perseus-Ready’ – a sign that they are ready to provide the innovative new services enabled by automated carbon emissions reporting between data providers, businesses, carbon accounting platforms and lenders”.

Chris Pointon, Project Manager, Trust Services.

What does being ‘Perseus-ready’ mean for your business?

For Carbon Accounting Providers:

• First choice for Financial Service Providers seeking market-scale data powered by Perseus.
• First to market with Perseus-enabled products 
• Major visibility to all participating Perseus banks
• On-ramp to real-world case studies, leading to wider sector visibility 
• Prepare your teams, technology and processes to strengthen your competitive advantage
• Opportunity to launch a new revenue stream, and develop new tech capabilities for your business

For Financial Service Providers:

• Test technical processes for ingesting Perseus data 
• Inform product innovation, reporting and compliance
• Build relationships and technical partnerships with potential data partners for new sustainable finance opportunities
• Develop new tech capabilities to build scalable access to sustainability data ecosystem

If your organisation is interested in using the sandbox and becoming ‘Perseus-ready,’ please get in touch via Perseus@ib1.org

Perseus will automate access to assurable SME electricity smart meter data and its carbon intensity at the time and place of use. SMEs will be able to receive emissions reports generated from these data and share them, via reporting solutions, with banks or lenders to unlock green finance.

As described in the 2024 Plan, Perseus members have been working throughout the year to uncover and explore the needs of all stakeholders in the data flow and convert these into concrete actions. These have driven detailed work on legal, technical and user experience design, assurability and process development to enable an operational pilot.

Purpose of the pilot

June marked the end of the six-month pilot phase of Perseus, which was launched to gather feedback on the technical, legal and user experience aspects of Perseus. Part of an iterative process, the pilot focused on reducing friction and enhancing the way Perseus works for SMEs, energy data providers (EDPs), carbon accounting providers (CAPs) and financial service providers (FSPs). 

What did we do?

• Tested the technical, legal and contractual elements of the trust framework.
• Explored whether the onboarding documents were sufficient and useful to organisations joining the Perseus scheme. 
• Checked the assured data flow of electricity consumption and derived emissions between participants.
• Tested the user journey flow, design, product integration and legal agreements with a CAP, an EDP and a FSP. 

How did we do it?

The testing was conducted on a one-to-one basis with participants, and feedback was gathered during calls and/or shared via email.

What did we learn?

Several important lessons emerged:

• SME UX: The overall Perseus user journey could be improved through the addition of simple but effective elements, such as a progress bar, providing the user with support and guidance throughout their Perseus journey. 

• Clarity about who hosts what: Greater clarity is required on which stages of the Perseus journey are hosted by the EDP, the CAP and the FSP and to what extent the host can brand and integrate the Perseus journey stages.     

• Engagement: attempts to engage FSPs during the pilot were not as successful as expected. This was mainly due to key stakeholders’ own constraints, needing to focus on other internal projects and not being able to put their own SME clients forward for user testing. To address this, we reached out to other stakeholders in the wider ecosystem to understand their barriers to participation and engagement and how to overcome these.      

• Onboarding support and guidance: During the pilot we discovered that organisations had more questions when onboarding that we had anticipated. We have since updated the supporting documentation and produced clearer step-by-step guidance, with “readiness” checklists.

• Cloud providers: Members whose servers are hosted by cloud providers had difficulty using private server certificates. We have now modified the technical requirements to enable them to use the same public certificate authorities as they would for any website or web service.

• Liability and data retention: Members’ legal and compliance teams were comfortable joining the pilot because both the pilot agreement and associated data retention requirements were limited to the term of the pilot. This will inform timeframe considerations for production.

• Green Lending Market: An observation from testing the pilot is that the green lending market is not as active as we anticipated for SMEs seeking green loans. However, we anticipate this will evolve as the market develops and more incentives are introduced.

• Trust and clarity: The clarity of definition that the scheme provided proved vital in helping different actors understand their roles and responsibilities.

• Case studies: A lack of engagement equaled a lack of real-life Perseus case studies from participants. As a result, IB1 increased its efforts to conduct stakeholder interviews, focusing on how stakeholders perceive their role and value within Perseus, and how IB1 can support them in becoming early adopters that other organisations can learn from.

• Support and discussion channels: Support channels proved to be a challenge with some organisations finding it hard to use Slack. To provide more opportunities for focussed discussion, we introduced more targeted and frequent working group sessions, with shorter advisory group meetings tasked with decision-making rather than detailed discussion.

• Language: Insight from the pilot emphasised that the language used to describe Perseus needs to be kept simple and appeal to different users. There is a responsibility to encourage SMEs to adopt green finance to help the financial sector deliver net zero and to support CAPs in easily calculating assurable emissions data.

Next steps

Perseus has now progressed to the ‘sandbox’ stage of the project; which officially launched on Monday 29th September. The Sandbox provides identical trust services (Registry and Directory) to Perseus in production, and includes a reference EDP that provides synthetic smart meter consumption data. It can safely be used for development and testing. 

Learnings from the pilot phase have been incorporated into the onboarding documentation. Perseus members are receiving one-to-one support and guidance through the sandbox and are encouraged to showcase their case studies.

The 2025 Perseus Report will be launched at the end of this year and will provide more detail on the Pilot, Sandbox and launch phases.

We spoke with Pierre Tabet, Founder and CEO of Voltview, about how the company began, the growing role of smart data schemes like Perseus, and Voltview’s contribution as part of the Perseus technical advisory group. We also explored how banks, eager for more accurate data to strengthen their ESG reporting, are likely to see Perseus as a critical enabler.

Ross: How did Voltview begin? 

Pierre: So, I started Voltview just over two years ago. I’d always been interested in the energy sector, having previously worked as a back-end engineer for an energy management company. When I moved back to the UK, I knew I wanted to stay in that field.

At the time, I began speaking to business owners who were unknowingly in the middle of the energy crisis. Many were still on fixed contracts, but when their renewals came up, their bills more than doubled. Hospitality businesses were hit especially hard because of their high energy consumption. For example, one fish and chip shop I spoke with saw annual bills jump from around £10,000 to £35,000. That kind of increase can threaten the viability of a business.

We saw huge pressure on SMEs, and I realised that’s where Voltview should focus. Early on, I had conversations with Smart DCC, who pointed me towards a government grant for smart tariff comparison in the non-domestic sector. Now, we just missed out on getting that grant, but we were still interested in the space. And from there we pivoted slightly.

Rather than just offering comparisons, we wanted to combine switching with retrofits, so businesses could save on tariffs and reduce consumption. Think of it like Booking.com: when you book a flight, they also suggest hotels, car hire, or insurance. But in energy switching, businesses never get offered solutions like heat pumps, EVs, or electrification measures, even though the data used for switching could easily support those recommendations. With reforms like market-wide half-hourly settlement, that data is more valuable than ever. It felt wasteful for switching to end with just a new tariff, when it could instead trigger bigger energy and cost-saving changes.

Ross: This makes a lot of sense to me. Especially now, what with rising energy costs. It reminds me of Open banking and how it opened up consumer choice. How do you ensure the data accuracy and transparency when you’ve got these tariff comparisons? 

Pierre: Open banking is a great comparison as it allows you to share financial data with authorised third parties, who then provide tailored services. As I’m sure you know, the government now wants to replicate that model in energy, having passed the Data Use and Access Act. 

This is especially relevant in the commercial sector- currently about 80% of UK commercial buildings aren’t compliant with the EPC B rating required by 2030. Non-compliance could mean fines. To address this, businesses need access not just to energy data but also building data, credit scores, financial history, everything required to prioritise and fund retrofits.

What’s really cool now is, a lot of the administrative work which took up a lot of energy consultants’ time, can now be done with AI, so that they’re only working on sort of the high value work.

Ross: That’s really interesting. How exactly can EPC data be linked to financial impact? Is there a link to green mortgages here, in a similar vein to SME emissions data being linked to green finance with Perseus? 

Pierre: Absolutely. Perseus is a great example and we’ve been lucky to contribute on the technical side. It provides a trusted way to share Scope 2 emissions data with banks, who in turn reward businesses with lower interest rates.

The bigger picture here is increasing electrification. In the UK, only about a quarter of energy use is electricity, compared to roughly half in Norway. To close that gap, we need incentives  like cheaper capital for retrofits, particularly for SMEs. Many owners are busy running their businesses, so making retrofits easy is critical to driving uptake.

Ross: And so you’ve got EPC data, half-hourly meter data, and financial data – how hard is it to bring all that together on one platform?

Pierre: It is challenging. Only about 60% of UK business meters are smart compared with roughly 95%+ in some European countries, so many firms are effectively flying blind. The first hurdle is getting half-hourly data; the second is aligning it with building and financial data. We start with specific use cases and design the simplest possible customer journey around them.

Ross: Very cool. And as you mentioned, the Data Use and Access Act should hopefully accelerate this work and smart data schemes like Perseus. I also saw on your website that your clients save 17% on energy bills. Can you share an example of this?

Pierre: Sure. Savings usually come from two areas: matching clients with tariffs that suit their load profiles, and cutting waste. One example was a restaurant kitchen where the ventilation system was switching on at night. The owners had no idea until we flagged it with half-hourly data alerts. Fixing that single issue accounted for about a third of their total savings. So really the savings are already in the data- you just need the right tools to uncover them.

Ross: Let’s dig into Perseus a bit more. How have you found being involved in its development?

Pierre: It’s been a great experience. We’re part of the technical advisory group, which has focused on making Perseus trustworthy, scalable, and incredibly easy for users. Ultimately, it’ll be as simple as ticking one box. In December, when Perseus trialled the process manually, it gave us confidence in how it can work at scale. We’re now about six months away from real-world rollout, and we’re excited to integrate it into our ecosystem.

Ross: And what would that integration look like for Voltview?

Pierre: It might not sit directly on our platform. We may simply guide clients to enable it through their accounting software. The point is that all our customers gain access to cheaper capital for retrofits, regardless of where they switch it on.

Ross: Do you think financial institutions are ready to adopt Perseus and scale up green finance for SMEs?

Pierre: Increasingly yes, the real bottleneck is data quality not intent. Almost half of FTSE 100 companies have had to restate climate metrics every year, mostly due to emissions in their suppliers. Banks and lenders want more reliable data to strengthen their own ESG reporting and sustainability-linked products. Perseus helps by providing verifiable upstream data so there is less estimation, fewer restatements and more confidence to deploy capital.

Ross: Great. To wrap up, what’s next for Voltview?

Pierre: We are nearing the end of the Smart Data Challenge funded by the Department for Business and Trade. The challenge has been to incorporate more cross-sector data into our platform. Our next step is to launch use cases that almost any SME can tap into by sharing their energy, building and financial data. We will announce these later this October as we complete the Smart Data Challenge.

Moderated by Hannah Cool, COO, Bankers for Net Zero (B4NZ), the panel also included: 

• Jessica Bingham, Head of Sustainability Strategy, ACCA. 
• Tomas van der Heijden, CEO, Briink
• Sir Andrew Steer, Professor of Practice, Economics and Sustainability, LSE
• Danielle Boyd, ESG Manager, M&G Investments

Perseus is supporting UK SME decarbonisation efforts by unlocking green finance from banks and lenders. It does this by automating access to assurable data to support lending decisions and related sustainability reporting.

In this episode, we speak with Tony Greenham, Managing Director of Sustainability at the British Business Bank to hear his insights on the role of finance in accelerating SME decarbonisation.

00:00 – Intro to British Business Bank – Role, funding impact, focus on businesses outside London.

03:00 – Small Businesses & Net Zero – Why SMEs are essential for meeting climate goals and the challenges they face.

05:00 – Carbon Reporting & Costs – Viewing carbon as a business cost, importance of measuring, and not letting reporting block action.

07:45 – UK Industrial Strategy – £4bn Industrial Strategy Fund and priority sectors, including clean energy and agritech.

10:10 – Project Perseus – Making emissions measurement simple (starting with electricity) and potential expansion to other inputs.

14:55 – Demand for Sustainability Data – Banks, investors, and corporate supply chains using data for financing and contracts.

17:43 – Political Climate & Long-term Investment – Navigating net zero backlash, focusing on commercial benefits, and future-proof investing.

The news is a significant milestone for the Perseus scheme, which makes it easier for UK SMEs to access green financing by automating their sustainability reporting and helps banks use assurable data to underpin their decisions. 

The innovation means the Development Bank of Wales is offering more favourable loan rates to SMEs by using assurable data to benchmark and check that they  comply with the terms of its green loans. 

With Perseus, SMEs can share accurate emissions data with their bank to access green loans. They can receive emissions reports generated based on their electricity smart meter data and share them with their banks or lenders to unlock green finance.

The Development Bank of Wales is among a group of leading businesses and non-profits taking part in the Perseus pilot – including Sage, Perse and SmartDCC.

Over the last year, the Perseus team has designed the key operational, legal and technical elements of automated sustainability reporting. It is guided by a group of over 180 people from commercial businesses, non-profits, public bodies and trade associations, with support from the UK Government. 

Matthew Kelly, Sustainability Manager, Development Bank of Wales, said: “This is a first of its kind pilot, using technology to drive down the business burden of reporting for SMEs and increase the accuracy of carbon abatement assessment and monitoring.

“We believe that Perseus will help scale green finance by giving us access to assurable, trustworthy data. It means that SMEs will get the capital that they need to boost their productivity while decarbonising, therefore helping us to get to net zero faster.”

Rebecca Evans, Cabinet Secretary for Economy, Energy and Planning in the Welsh Government welcomed the announcement. She said: “The Development Bank being named as the UK’s first bank to use Perseus further demonstrates Wales’ commitment to promoting sustainable business and securing a low carbon economy.

“It’s an important milestone for the Development Bank and we are pleased to see them taking a lead role in making it easier for UK SMEs to access green financing so that we can support their productivity and reduce emissions.”

Gavin Starks, CEO of Icebreaker One, which runs Perseus, said: “This milestone takes us from use case to case study – showing that unlocking access to data, with the permission of the customer, can help get green finance flowing to SMEs. 

“It’s a major proof point that the Perseus Scheme can enable trusted smart data to flow between SMEs, carbon accounting platforms, and banks – and help accelerate access to billions on the race to zero. 

“Small and medium-sized businesses account for 50% of UK business emissions, but often struggle to get the capital they need to decarbonise. Even if they have the intent, they often lack the time, expertise and money to act. We want Perseus to help the market solve that: to go far, we go together.”

The Perseus pilot is still underway, working with banks, carbon accounting providers, small businesses, and others. Find out more about joining Perseus.

The Perseus pilot – in which banks will allow Perseus monthly emissions information to be used in the decision making process for one or more green loans – represents a huge step towards automating reporting for UK SMEs, bridging the gap between real-world energy data and financial decision making.

We’re speaking to those involved in Perseus – from Banks, Carbon Accounting Providers, non-profits and policymakers – to explore what the pilot will mean for their business, their customers, and the broader net-zero transition.

In our latest conversation, Conrad Langridge from Sage discusses the challenges SMEs face in carbon reporting, particularly around education, data accuracy, and complexity. Through Perseus, Sage aims to simplify these challenges, enabling SMEs to easily track their emissions through smart meter data and detailed analysis, helping businesses save money and reduce their carbon footprint.

Timestamps

00:00 – Introduction to Conrad Langridge and Sage Earth

01:00 – Sage’s net-zero strategy overview

02:40 – How Sage supports SMEs on carbon accounting

03:22 – Common struggles SMEs face in carbon emissions reporting

07:30 – The shift from traditional accounting to carbon accounting

08:54 – Sage’s role in educating SMEs and accountants in carbon accounting

09:53 – Advantages of smart meters for SMEs

13:00 – The value Perseus brings to carbon accounting providers: Granularity & Accuracy

16:30 – The wider adoption of smart technology and data sharing trends

19:00 – Conrad’s experience and perspective on Project Perseus’s organisation and momentum

Transcript

Conrad: Conrad Langridge from Sage, the accounting, HR and payroll software company that you all know and love. Probably recognised from the Rugby if you’ve been watching that recently. But I work for Sage Earth, which is the carbon accounting sort of body or business unit within Sage. So, yeah. So Sage carbon accounting, it’s as the sort of name suggests, it’s a carbon accounting solution, which helps businesses better understand their environmental impact and sort of start to build strategies on how they can reduce their impacts. Yeah.

Ross: Yeah. No. Really interesting. And you’re sort of going into it there, but could you go more in depth on, you know, Sage’s plans in the net zero space? For yourself, you know, in terms of carbon carbon emissions.

Conrad: Yeah. So if we’re looking if we think about Sage’s net zero strategy, it largely sort of falls into two buckets. One is getting Sage to net zero. So these are looking at all of the you know our offices, how we commute, all of those sort of things, which probably make about 20% of our emissions. Then the two big buckets are: the use of our products, so people actually using Sage solutions and then also our suppliers. So all of the people we spend money with, marketing agencies, office management, that sort of stuff. So we’ve got that’s one part of our strategy. But we’ve also got SMBs to net zero so this is looking at small businesses and small and medium sized businesses and understanding their impact on the planet. And we’ve worked out that the emissions of our customers alone is in the tens of thousands of orders of magnitude greater than Sage’s impact. So, you know, we obviously work with businesses across all different sectors. But, just a few thousand construction companies is going to have a greater impact than a big software company. So yeah, so we’ve got this big opportunity to support small and medium sized businesses across the globe. And that’s sort of one of our biggest parts of our sustainability strategy is doing just that. Not only are we offering carbon accounting, carbon footprinting functionality to SMBs directly through Sage Earth or Sage carbon accounting, but we also do it through an API service. So we’ve been working with a number of banks including NatWest, who are part of the project Perseus initiative, and we work with others as well. So we’re offering those carbon accounting API services to sort of a broader range of enterprise businesses and banks.

Ross: Yeah, that’s really interesting. On that, I was going to ask, you know, what problems do SMEs come to you with when they’re trying to report their emissions? What kind of things do they struggle with?

Conrad: Yeah. So thinking about SMEs and where they struggle from a net zero or carbon accounting perspective, education is probably the biggest piece. We went to Accountex a couple of years ago and we polled their generally accountant audience there, but also includes sort of businesses. Everyone, nearly everyone knew climate change. A few knew net zero. But then as soon as you get into the sort of the sort of language which you really need to know about things like scopes and carbon accounting, people didn’t understand that terminology. And really, to build a sustainability strategy, you need a bit more of a sort of an understanding in terms of education. So education is a big piece. Money is a blocker, but it’s not often the biggest blocker from my view. The blocker is, the education and understanding of how to use the software and what information to capture. And then the nuance on all of the details, which goes into like building a strategy and understanding which parts of your carbon footprint are really material, so where you want to focus your energy. So that’s, I guess, where they struggle.

But using a tool like ours. We’d like to think the process is nice and simple. We take them through that journey. We also have a net zero hub, which does that sort of upfront educational scene setting and building the business case. But yeah, the tool really, as I say, hopefully takes them through that journey to make it easier, but then also gives them the hotspot analysis, which allows them to see which areas of their business have the material impact. So I think that’s where actually the biggest learnings come for small and medium sized businesses. Suddenly they can see where they actually need to focus their energy. And I think from a Perseus perspective, the same thing is true, right? So scope two is a really important part of a carbon footprint. Not always the biggest, but it’s one which is always sort of in the control of the business. It’s one of the levers they have an impact over, unlike some things within scope three, like your supply chain, which is much harder to manipulate. So yeah, looking at scope two and being able to see the emissions associated with your electricity consumption allows businesses to see; in terms of how they’re operating, what changes they can make. So linked to the benefits of smart meters, if you can see your business is using electricity, you know, at a peak time and you’re doing lots of peak consumption, you’re going to see your carbon footprint’s potentially higher. And normally, your bills will be higher. Whereas if you’re using off-peak, you’ll be able to reduce your emissions and your costs.

Project Perseus allowing us to connect to smart data meters is going to allow businesses to see when those emissions are ramping up and start to control that. Yes, it’s great the emissions are likely to be lower but the big thing for small businesses is they’re going to pay a lot less for their electricity.

Ross: Yeah, that’s really good. It’s really interesting that you brought up that education, guidance piece as well. Because if I think of accounting in the traditional sense, not carbon accounting, I can see how you’ve developed that and then moved into carbon accounting and grown that guidance for businesses, which is really good to see.

Conrad: Yeah, I guess I’ve got a follow up point on that. So if you think about financial services or accountants within a business, often they’re the trusted advisor for all of those things to do with money, cashflow, all that sort of stuff. And, when it comes to carbon accounting and net zero, businesses are going to need the same sort of support. Well, they can either educate people internally to bring them up to speed, or they can go to a carbon accountant. But more and more, there are loads of great carbon accountants. Well, sorry, there are carbon accountants and they’re great, but there’s not loads of them, so there’s not really enough. Well, there’s definitely not enough to go around. So we either need to get way more carbon accountants or we need to educate accountants in carbon accounting so they can be the trusted advisor for the thousands of small businesses they work with. And we’re seeing that trend at Sage, we see increasingly, numbers of accounting firms who were traditional accounting firms a few years ago, turn and either focus on carbon accounting as their big sort of differentiator in market, or they add it as a subsidiary service, which is giving them a new revenue stream. And, I don’t know if it’s just the ones we speak to, but all of them are doing really well because there’s so many businesses, small businesses out there who are looking for this support and accountants are doing, you know, a great job at educating themselves on it. Even across a carbon account there’s no one who’s sort of nailed that. It’s not a direct, exact science like accounting is. With accounting, you can count every penny and things can, you know, line up perfectly with the carbon accounting. There’s sort of boundaries in which things can be shifted or you can sort of pull things in and out of scope. And so it’s not a perfect science yet. So just starting or just getting your SMBs on that journey is really the best place to be.

Ross: Yeah, definitely. And like you said, once you know, we start integrating smart meters more, we can get more reliable data for improving that as well.

Conrad: Yeah, I think the benefits from smart meters, there’s kind of two sides to it. I see for SMBs or SMEs the benefit is the smart meter even at that end, there’s loads of benefits for them. Being able to see when you’re using your electricity, using electricity off peak, going from like a fixed meter where you pay, you know, they’re taking that money from you, whatever. There’s the current system and this is how I’ve got at home, admittedly, I’ve not got a smart meter for my sins. But I’ll be billed up front and I’ll be paying for electricity, which I’ve not used for like months and months, and it builds up and I get all this credit. But for a small business, that’s actually cash flow, which could be worked into much better effect within their business. And there’s all these different benefits paying for electricity that you’ve actually used, automating it so you don’t have to report your electricity consumption back to a provider, seeing it in like a smart environment so you can log on and it’s just there rather than thinking about your smart meter every, few months and you forget about it. So there’s loads of benefits from a small and micro sized business perspective on smart meters. And then there’s a sort of subsidiary benefit which is a better understanding of your carbon footprint. And again, why do you need to know your carbon footprint? There’s obviously great benefits from a sustainability perspective, but businesses need this information for a whole host of other reasons, even small businesses. So if they’re looking to do business with central government or the NHS, you need a carbon reduction plan, PPN 0621, if you’re working with a big supplier, say for example, you work with Sage or you work with Sainsbury’s or whatever, suppliers are going to be asking for carbon footprint data to feed into their emissions reporting.

But you’ve also got banks. Increasingly, banks are going to their small businesses and asking them for carbon data including scope two electricity consumption, and offering them loans based on their net zero trajectory. So if you’re a small business that has completed a carbon footprint and has got a net zero plan, you’re a much lower risk than the exact same business within your sector who hasn’t started that journey. Because there’s a lot of risk associated with your activity. And the fact that you’ve not even started looking at that is a bit of a red flag to banks. So if they can start working with small businesses who are clued up on all of this stuff, even if they’re in a riskier sector, there’s more likely that business will come through and actually become profitable, will remain profitable. So yeah, a whole host of benefits.

Ross: Yeah, definitely. And I think I’m just thinking there, obviously I can see if we sort of move into Perseus here a bit. It was always very clear to me the benefits for small businesses because you can access green financing. And then for banks, you know, they’ve kind, if you use that carrot stick thing, they’ve got regulation behind them where they’re having to report on this. But then for carbon accounting firms where do you see the benefit of this work more generally and Perseus?

Conrad: There’s a whole bunch of benefits for carbon accountants and carbon accounting software providers. For me, probably one of the biggest things is granularity and accuracy. And with that comes trust and traceability and just general confidence around carbon accounting. So our current methodology, we’d typically or one of the methodologies we would use, would be understanding what someone spends on their electricity consumption, and we could read this from their accounts really quickly. But with that, that might be, you know, a month’s worth of energy usage of which we don’t know whether they’ve used that in peak or off peak or when it was a particularly windy day and there was lots of renewables in the grid, or if it was sort of peak times during EastEnders and there was no wind, or when there was no wind and the sun was shining and it was like natural gas was 70% of the grid. So we can’t see that within our system. So any estimate on carbon footprint is exactly that, an estimate, and that sort of over a year or average out. And it won’t actually be too far from the truth. But month by month, it could be sort of wildly or wildly inaccurate. But moving to a smart meter data reading and going from monthly data to Half hourly data just reduces that error risk within that calculation.

So that’s one thing. It improves the number the user sees. But also with that old methodology, if a business makes a change to their carbon footprint or their consumption, the only way you really recognise that is from reduction in cost. And that would come from moving to an off peak piece. But actually with the 30 minute reading, you would be able to see the direct changes more clearly. So if someone had moved all of their charging to overnight or at different times, but perhaps the price hadn’t changed, we’d still be able to see the benefit from a carbon reduction perspective, and all of that would be tracked within the system. So it just gives, it’s like that positive feedback loop so a business can make changes to their operations. And with this Perseus model, they’ll be able to see those changes within their carbon footprint the next day because the information would be there. Versus waiting a month and not really knowing if you’ve made a difference, you have made a difference, but it’s not actually recorded because of the existing methodology.

Ross: Yeah, that’s really interesting getting that kind of instant behavioural change. But for whole businesses. Sort of going off on a tangent a little bit, you know, there’s a big push now from smart data from governments and there’s more recognition now of this kind of work. Are you seeing that, you know, influence with the banks you work with or the businesses, whether there’s more willingness to open up to, you know, open data, smart data, and these kind of areas of work?

Conrad: I think because it’s such a, it’s like a topic which touches society at large. It’s such a big trend. I definitely think the adoption of these technologies is just happening across the board. But I think that’s just as the general public gets on board with this sort of technology in their lives. I think that’s where the biggest shift is, because I think you can see trends within enterprise businesses adopting different technology. But that’s only the sort of very few people who sort of operate in that sort of business landscape. But for something like smart meter adoption and amongst micro and SMEs. That’s really just a reflection of society much more broadly. And there’s so many, you know, when you talk, think about micro micro-businesses and small businesses. There’s literally millions of them. So it’s just like, is the general public seeing this adoption of technology? And it’s generally. Yes. So that’s what the trend is. There’s not like a quick shift like you’d see in a sort of enterprise where you only only see like a few thousand people need to be convinced it’s the right thing to do. And those people are looking out for things which they can do to adopt. This is millions of people who have got millions of other things to worry about. So the behaviour change is a lot slower, but it’s really positive, I’d say.

Ross: Yeah. Those are most of my questions. But is there anything more, you know, on Perseus, on the pilot specifically that you wanted to talk about? Basically, how it’s going.

Conrad: Yeah. So I guess I’ve been involved with Perseus for a couple of years. Since it’s sort of ideation, really. And I’ve always been impressed at how well it’s run, from an organisation point of view. Yeah, the organisation, the structure, the sort of this is what we’re going to achieve in year one. And this is the sort of process in which we’re going to do it, and this is how we’re going to engage with the stakeholders who are on board and the sort of the working group structure, all of that sort of stuff, I’ve been really impressed with. I’ve been involved with other sort of similar projects which launch with the same amount of excitement, but the momentum isn’t kept. And that’s not because people aren’t excited by it, but it’s because it’s not run properly and the expectations aren’t set and the operational structure isn’t in place for it to work well. And I think Project Perseus does have that super you know, the organisational structure, the AGMs, the updates, the email updates, the different working groups, all work to keep people, to keep the many stakeholders on board so people know what’s going on. So yeah, I’d say that’s one of the best parts of it, is essential what keeps it going.

The upcoming Perseus pilot – in which banks will allow Perseus monthly emissions information to be used in the decision making process for one or more green loans – represents a huge step towards automating reporting for UK SMEs, bridging the gap between the real and financial economy.

In the lead up to the pilot, we’re speaking to those involved in Perseus – from Banks, Carbon Accounting Providers, non-profits and policymakers – to explore what the pilot will mean for their businesses, their customers, and the broader net-zero transition.

In this conversation, Ian O’Donnell MBE from the Federation of Small Businesses (FSB) talks about being a voice for the small business community, sharing insights on how to empower SMEs to report their carbon emissions effectively. With SMEs accounting for 99% of UK businesses and nearly 50% of business emissions, they face significant barriers to carbon reporting, including limited resources, restricted access to energy data, and complex landlord-tenant relationships. The FSB continues to advocate for stronger government support, standardised carbon accounting, and financial incentives to ensure SMEs can play a vital role in the UK’s transition to net zero.

Timestamps

[00:00] Introduction: Ian O’Donnell, Federation of Small Businesses (FSB)
[00:40] Defining the small business community: The importance of representing micro-businesses
[01:40] SME challenges: Reporting carbon emissions, resources, and limitations due to tenancy arrangements
[03:17] SMEs represent around 50% of UK business emissions; importance of government support
[04:33] Value of Project Perseus for FSB: Simplifying SME emissions reporting, particularly scope 1 and scope 2 emissions
[05:55] Working through challenges of data accessibility with Perseus
[06:40] Simplifying carbon accounting by connecting SMEs with existing tools
[08:35] Main barriers for SMEs engaging with Perseus and opportunities to improve uptake
[10:00] Future of Perseus & Future use cases: Water, electricity and gas.
[10:35] UK Governments role: Need for targeted SME education and tailored support. Differentiating big / small business
[12:40] Landlord-tenant challenge: Impacts SME’s ability to invest in energy improvements
[13:45] Financing complexities: How tenancy duration affects investment decisions for SMEs
[15:00] Geopolitical trends and their impact on SME commitments to sustainability
[16:30] Importance of consistency and stable deadlines for SMEs in sustainability strategies
[17:05] Closing remarks: Simplicity, accurate data, procurement access, and inclusive finance for SMEs

Transcript

Ian: I’m Ian O’Donnell, I’m deputy chair of policy at the Federation of Small Businesses and one of the non-executive directors there. And as an organisation, our role really is to support and help the small business community, both through a range of sort of support tools, including insurance and things like that. But also, crucially, and the key reason for our being is to talk to stakeholders at national and local level, in government and otherwise, about how they can make sure we have the right environment for the small business community for them to thrive.

Ross: Yeah. And I guess, yeah. So the small business community there, what kind of size are we looking at?

Ian: So we, we represent the SME business community. But the majority of our membership and the businesses we engage with are at the micro end of the small business community. So less than ten employees. Though we have a fair few members as well who are sort of in the 10 to 50 employees and a few who are bigger than that. But primarily we’re there to support sort of the smaller end of the SME community. And to really ensure that they get a voice when individually they wouldn’t have a voice. So obviously each of those individual small business owners don’t have the time or the resources in the way that a large business does to speak to government. So we very much act as a collective voice for that small business community.

Ross: Yeah. No. Really cool. I guess moving in into the net zero space then I guess there’s a, thinking about what you just said there, it’s like, do they have the education? Do they have the power to, you know, track their carbon emissions? You know what’s SMEs plans in that space?

Ian: Yeah. So the challenge here is two-fold. Obviously A. The rules coming down the line in terms of reporting of carbon footprint, carbon calculation. And particularly actually that’s already being felt through the procurement process. Obviously larger businesses have already got to report on scope three. And obviously that inevitably means if they have small businesses in their supply chain, those small businesses are being asked to report on their carbon footprint, even though actually legally as yet, they don’t have to report. And so the supply chain already means that this is coming into effect. And, the problem for many micro and small businesses is they don’t have the knowledge, they don’t have the skills, and they don’t have the access to resources to A. Monitor and measure their carbon footprint. And B. Sometimes don’t have the ability to put changes into practice in order to reduce their carbon footprint, if they’re in shared premises, if they’re in a tenanted building, rather than owning their building, short term leases quite often often means they don’t have the capacity to to make the changes that they want to, for example.

Ross: Yeah, definitely. Yeah, it’s a really good point the, it’s always quite clear when it’s like large corporations what they need to do to stay in line, but the small businesses actually make up the larger businesses supply chain.

Ian: Exactly. And also in terms of the economy as a whole. So it’s why it’s so important that we don’t and the government in particular, doesn’t leave the SME community out of this sort of race to net zero in terms of their support and enablement for that. You know, five over 5 million of businesses in the UK making up over 99% of the business community are SMEs, and over 2 million of those are less than ten employees. So this is a significant proportion of our business community here in the UK. So if we don’t solve the problem for those businesses, we are not going to solve the macro problem of how we get to a net zero carbon neutral economy.

Ross: Yeah. No. Very true. I was reading this SMEs make up around 50% of UK business emissions as well.

Ian: Yes, exactly.

Ross: I guess now it’s good. We’ve, we’ve kind of set the scene now to lead into Perseus. And just where do you see the value of Perseus for FSB and, and your, your SME customer base?

Ian: Yeah. So the real value of this, from our perspective, is if we can automate and simplify the process by which a micro or small business can get the data it needs to report on its carbon footprint, particularly in their scope one and scope two emissions from micro business, because they have less requirement to report on scope three, but certainly their scope one and scope two, they’re having to report up supply chains. It’d be invaluable.

There are challenges to it, and it’s great that you know what Project Perseus has also given that opportunity to discuss some of the challenges around how this happens, because what with many small businesses being in tenanted premises or even in shared premises, they often don’t have direct access to metering and details of their energy consumption. And so I know it’s been really good recently through Project Perseus, to have some of those discussions about how do we still enable those small businesses through other forms of technology, to be able to report in using the project Perseus mechanism, to then allow that data to be transferred.

Ross: Yeah. Yeah. That’s amazing. Really good. Really good to hear that you’re working through those challenges. And I guess you work through the challenges in a collaborative environment as well, so you can hear other people’s pain points.

Ian: Yeah. Exactly that. You know, it’s been great with Project Perseus that you’ve got, you know, a good range of people, from the financial institutions to the those involved in the metering through to representatives like myself, representing the business community. And sort of all looking at the problem in different ways, but all with an overall passion to say, how do we make it as easy as possible for the SME community to be able to get the data it needs to be able to report accurately?

Ross: Yeah. And how do you think, thinking more long term. How do you think Perseus could slot into you know, what you offer SMBs? Could it be part of your offerings, like education, teaching them on sustainability? Could Perseus that slot in there.

Ian: Yeah. So I think for us it’ll be about connecting people up. So you know what carbon calculators are out there. Accountancy packages, all the rest of it. How do we work with those to make sure they’re plugging in data when it’s available through Project Perseus and other things that may become available to simplify for SMEs that process of producing a carbon report.

We’re also involved in organisations like UKAS, which is the UK accreditation service, on how do we make sure that there is a common standard and universality about data reporting, because at the moment, as many, you know, and we’ve discussed again through Project Perseus, is actually you can go to several different tools and get several different answers on what your carbon footprint is. So how do we create some consistency and some certainty about the data, which is obviously vital when it comes to SMEs accessing. Two key things one procurement opportunities and second biggest issue affecting many SMEs – access to finance. And with banks obviously requiring to know what the carbon footprint is. And wanting some assurity of that data. Anything we can do to help create that is vital. But notwithstanding that challenge of making sure that all SMEs have access to the data. Which isn’t necessarily going to come through half hourly metering for all of those SME community.

Ross: What do you think the barriers might be for SMEs engaging with Perseus. We can help with this kind of work we’re doing right now. But how can we improve engagement?

Ian: The reality is SMEs themselves are probably not going to be engaging with Project Perseus directly. They’re going to be engaging with the partners who come on board, who provide that mechanism for that data, to then become available in the tools that SMEs are using. So when we look at accountancy packages; Xero, QuickBooks, Sage, etc. you know, it’s vital that they engage with Project Perseus because then that data flows naturally into those systems and they, you know, just the same way as I can do my balance sheet of my accounts, I can go on there and I can get my carbon report. If we connect all the dots well, through Project Perseus, that’s where SMEs are really going to see a benefit for those that have got access to that data in the current form. And also I think where Project Perseus, as it starts to see that success and that enablement, there’s increasing pressure to say, how do we solve the problem of businesses that don’t have access to half hourly metering? And, you know, I’m sure you know, as a collective we’ll be able to create pressure and, and also create some of the solutions to how that data can be sourced.

Ross: Yeah, definitely. And there’s also the fact that, you know, this is our first use case is electricity. And then it could move into to, a lot of people are saying gas, at the moment. But there’s loads of other ways to go.

Ian: Water is, you know, the three big ones for any micro business, small business is going to be electricity, water, gas. So if we can solve those, those big three and automate that, and then obviously we then move into many other areas in terms of travel and so on. But those are more in scope three. But if we look at scope two, those are the biggest. How can we make that simple and straightforward for the SME community?

Ross: Yeah. Really cool. Yes. I’ve spoken to Sage and I’ve spoken to a few others, but, I think FSB is interesting in the sense that you work with government and policy makers. I wanted to talk about what inkling you get from the government on, you know, on this topic and how important it is tracking SMEs emissions. How important is that for the government?

Ian: I think, you know, overall, this government has continued to be fairly positive on the discussion around how do we reach a low carbon economy. And so continue to have that as a focus, or at least there’s been some consistency for a while now around the importance of reducing carbon footprints for all businesses. Um, I think the challenge, as inevitably government understands big business a bit more readily than it understands small business. And I think the reduction in carbon and the way that a big business can adapt is very different from a small business. And I think one of our key roles has been to sort of have that constructive discussion with the government to sort of say, yeah, that that scheme, that program you’ve got over there works very well if you’re a big business. But actually small businesses are different. And how do you help them and support them in a slightly different way. So. And one of the key areas of that is around education. So it’s great that we’re through Project Perseus creating the tools. But we’ve also got to provide the education and support for that small business to be able to adapt and change and deliver on a carbon reduction plan within their business over the next few years.

And alongside that, also, we’re very much in discussion with government about, well, how do you facilitate that? So I know I keep going on about it, but the sort of the tenanted aspect, small businesses do not generally own their own premises – actually creates not just the challenge of access to data, but it also creates a big challenge in terms of the ability to affect change. If I own my premises and it’s a big premises, it’s no problem to stick solar panels on the roof. It’s no problem to switch over to air source heat pumps. If I don’t own my premises. I don’t necessarily have the access and the ability to make those changes. And also, if I’m perhaps only got a five year tenancy as opposed to a 25 year tenancy that a bigger business might have if it is a tenant, I don’t have the ability to finance that and get return on investment within that relatively short timescale. So how do we again looking to government for support and perhaps creating the frameworks whereby you can have transferable finance around, adaptations to buildings and things like that?

Ross: Yes. Is that a data problem or a legislative problem?

Ian: It’s partly a legislative problem. It’s partly just a you know, the finance industry is not used to the fact that who owns the the asset is quite challenging in that scenario. So if I as the business don’t own the building, but I’m the one who wants to put on the solar panels, but I might be moving out in five years, how does that journey look from a financing perspective? That’s not something that is a traditional financing model that they’re comfortable with. Especially as some of the technologies we’re talking about are emerging technologies. And so again, financiers are also slightly wary of that. So really we’re looking for business to step in and give some assurity to those who are providing finance, to be able to give confidence in the data about carbon reduction that these will provide. How, through Project Perseus, we can get accurate data about the impact it’s having for that business. And how do we solve the problem of, in effect, the landlord tenant split on these things.

Ross: Yeah, fantastic. And just thinking there on, this is again more geopolitical. But you’re talking about big businesses and banks there, and there’s this trend that seems to be coming from across the pond. HSBC, BP now changing its sustainability targets when you’ve got these big businesses changing their net zero plans. Do you think that’s going to have a knock on effect for SMEs, or is it more time to double down on SME emissions?

Ian: It’s really interesting sort of seeing the way different big businesses are responding. So, some are actually responding by saying no, we think this is the right thing to do. We are in, we actually want to locate in the UK because it’s a good place to be from a support and a framework around low carbon. But other businesses, obviously, as we’re seeing perhaps located elsewhere, are reducing their targets. And I think it does create a challenge for SMEs because any business wants certainty, any business wants to know the landscape into which it’s planning. When you’ve got a lack of certainty and moving targets, then it becomes very difficult to plan. Bearing in mind that a small business needs ROI on a much shorter timescale than a large business can afford to have when making investments such as carbon reduction, type investments will tend to be. So yeah, one of the things that’s really vital is that we we have a consistency of approach, and that deadlines and timelines don’t keep moving for SMEs, because otherwise I know from experience, from conversations that we’ve had in the community, is that if the timelines keep moving and keep getting pushed back, the response is, well, actually what I will do is not bother because it might never come anyway.

Ross: Yeah, definitely. And that’s really, really interesting. I don’t know if you wanted to add anything to discuss on Perseus itself or, or even anything coming up for FSB you think might be relevant?

Ian: No, I mean, I think the key things that I think we are affecting the small business community is simplicity and a assurity of data, so that if data is available, that we can know it’s good and that it’s simple and easy to report on. And that we give access to data for the whole small business community. So solving the problem around access to data, if you don’t have half hourly metering available in whatever building you do, bearing in mind, as I was talking to somebody just earlier, you know, working in a garden office in their home, you know, what does that look like from an energy reporting business for a small business, when it’s part of your overall household energy bill? And then making sure that we maintain access to procurement and access to finance for SMEs and don’t exclude them as carbon accounting and the sort of requirement for scope three emissions reporting becomes ever more prevalent. Let’s not exclude small businesses, but let’s use supply chains to help and enable them to make that transition effectively.