UK SMEs aiming to ramp up sustainability actions
Almost two-thirds of UK small and medium-sized businesses (SMEs) have signalled their intentions to improve environmental sustainability practices due to heightened consumer awareness and new legislation, according to a new survey.
Lloyds Bank Commercial Banking’s Business Barometer surveyed 1,200 companies in November 2019, exploring attitudes towards environmental sustainability. While 64% claimed they wanted to become more sustainable, 63% have already taken steps to improve environmental performances in the past 12 months.
According to the survey, which first launched in 2002, 24% of SME respondents have improved the energy efficiency of their premises in the last year, while 22% have utilised suppliers that offer greener products and services.
Lloyds Bank Global Transaction Banking’s head of asset finance Keith Softly said: “With environmental sustainability high on the agenda for firms of every size – whether that means they’re doing what they can to reduce energy consumption or cut waste – businesses understand there is often a financial benefit to making their operations greener.
“As ever, before making significant investments, businesses should consider all the available funding options to decide which is most appropriate for them. When it comes to going green there are options such as government grants and asset finance solutions that help spread the cost of an investment over its lifetime, and initiatives like our Clean Growth Finance Initiative which offers discounted lending for green purposes.
Just under a quarter (23%) of respondents admitted that the organisation is primarily driven by making long-term costs savings, and that any investment into sustainability would have to generate such returns. However, 22% claimed they are primarily motivated by customer and consumer pressure regarding sustainability and climate change, which has heightened in recent months due to the climate strikes and new net-zero legislation introduced by Government.
However, barriers to match these ambitions with action and investment do exist. More than a third (34%) of SMEs say they plan to use cash reserves to become more sustainable. Meanwhile, 13% say they will rely on government grants.
One key area of action for SMEs is that of waste management. A major survey of more than 1,000 UK SMEs last summer found that while the majority of businesses understand the importance of reducing single-use plastics, 40% are yet to carry out basic measures to reduce plastic waste.
The YouGov data, commissioned by Keep Britain Tidy and Brita UK has found that SME action to combat single-use plastics has been sluggish. The survey of more than 1,000 SME decision-makers found that only 52% are doing “all they can” to reduce single-use plastics.
Another key focus will be that of energy and heat. Last year, a programme was launched by the government's Energy Systems Catapult centre to assist SMEs in developing low carbon heating and cooling.
The package, dubbed Incubator and Accelerator, offers SMEs support to secure investment for smart energy systems with expertise from the Catapult offered alongside a network of partners to help with business growth.