Survey: SMEs struggling to find funding and time to deliver sustainability ambitions

More than 90% of the businesses in the UK are SMEs

Conducted late last year by tech and software firm Sage, the survey covered 2,040 decision-makers at SMEs in the UK, with the results being published this week.

Half of the respondents said they see sustainability as “important” to what they do, with 13% describing environmental issues as “business-critical”.

Yet just one-quarter of the respondents said they expect their business to become more environmentally sustainable in the next 12 months. The most common challenge to implementing measures to improve environmental outcomes was cost. One-third of the survey respondents said they think the changes they want to make would be too costly to implement at present – particularly with the costs of raw materials and energy increasing.

The other most common challenges were found to be a lack of time to dedicate to sustainability, cited by 27% of respondents, and a lack of in-house skills, raised by 25%. This latter point resonates with separate, recent research from the SME Climate Hub, which polled 194 SMEs and found that two-thirds do not believe they have the right skills and knowledge in-house to reduced emissions and build climate resilience.

Many of the businesses surveyed by Sage acknowledged that failure to show sustainability leadership could prevent them from meeting the changing demands of key stakeholders. Almost one-third (29%) said they feel pressure to become more sustainable from customers, while 26% feel pressure from the UK Government and 23% feel pressure from their staff.

Common pressure areas include talking publicly more about the overall impact of the business, and providing more evidence that products and services are low-carbon or otherwise bear some kind of ‘green’ credentials.

The findings broadly echo those from a separate, similar study conducted by bank NatWest, which published its results in January. That study revealed a drop in the proportion of SMEs positioning environmental sustainability and a priority issue in the short term, with Covid-19 and the energy price crisis taking precedence.

SME support

The UK Government has already published guidance on how SMEs can and should measure and report emissions, following a call to action from Prime Minister Boris Johnson in May 2021.

Other supporting tools include an online hub enabling businesses to access practical information on how to approach the net-zero transition, from O2 and the British Chambers of Commerce; and the SME Climate Hub, which recently worked with CDP to launch a new framework for measuring, reporting and reducing environmental impacts.

And, just this week, Small Business Britain has launched a new education programme in partnership with Oxford Brookes University.

The new ‘Small Business Sustainability Basics programme’ is a free, online, six-week short course that will run from March to May 2022. It will help SME decision-makers to understand their role in the net-zero transition and how they can leverage the money-saving and growth opportunities of reducing their environmental impact and innovating products and services.

Sarah George