More than half of small and medium-sized enterprises (SMEs) in the UK are investing in their own sustainability in alignment with the green agenda, new data shows.
According to research from retail bank Aldermore, SMEs invested an average of £61,250 into their own sustainability operations during the last 12 months, with the average SME planning to spend a further £78,392 (an increase of 27 per cent) in the coming year, despite the increased cost of living.
The study was conducted in March by Opinium Research, with 997 senior decision-makers in UK SMEs responding. The same survey conducted in 2021 found only 12 per cent of businesses prioritised sustainability, compared to 53 per cent this year.
There has been a considerable corporate shift towards a greater regard of sustainability as a significant priority, in the wake of COP26 and the Government’s own green agenda, with more companies willing to stand up and take action.
A variety of sustainability strategies are underway among SMEs, with recycling taking the lead, as 65 per cent of UK SMEs invest in recycling schemes at work. This is swiftly followed by 55 per cent reducing business travel and 50 per cent changing the materials they use.
Plans to tackle sustainability more effectively in the next year include 21 per cent of SMEs considering changing to an eco-friendly product or service, while 12 per cent say they will invest in carbon offsetting.
While some businesses admitted that they found Covid and the economic climate hindered their sustainability practices (27 per cent), seven per cent stated access to finance was a barrier. Nearly half of the respondents revealed they want a partner with experience of funding green projects, having recognised the importance of having a lender with sustainability funding expertise.
Tim Boag, group managing director, business finance at Aldermore, said: “Businesses across the country are now re-evaluating their priorities and looking ahead to how they can innovate in the future, and a particular area of focus for many SME businesses is the responsibility they have for the UK’s ‘green transformation’.
“SMEs are going to see increasing demand and expectation from their customers to deliver more sustainable products and services and will face scrutiny in terms of their own operation’s impact on the environment. There are a wide range of strategies that businesses can employ to improve their sustainability, such as the Green Finance Institute and the SME Climate Hub.
“It’s hugely encouraging to see that businesses are increasingly willing to address the issue of sustainability and it will be the ingenuity and drive of SME owners that will help make much of the UK’s green transformation possible. At Aldermore, we work closely to support our SME customers, helping them to access specialist funding which can help accelerate the transition to net zero practices.”
Sid Sadique, chairman of Electra Commercial Vehicles, said: “This is a new technology - we took a decision to build trial vehicles for customers and got them used to electric vehicles.
“What we’ve got to remember is we’ve used diesel or petrol vehicles for decades and moving to an electric process took customers by surprise. Doing what we’ve done is ground-breaking but it was a challenge.”
“A lot of funders are a little bit nervous, whereas Aldermore understood the market and were listening to customers about the drive for zero emissions. I remember bringing them to our factory and they were amazed by what we were doing.”
Camilla Thomson, Interim Practice Lead, FMCG & Manufacturing at Acre, said: “It’s great to see companies of all sizes now starting to invest in sustainability. I really enjoy working with SMEs who are at the beginning of their sustainability journey and our interim network feels the same way.
“Many of our clients believe that the right person/team of people is crucial to create a sustainability strategy, set realistic goals and to enable the change to happen in the right way. That is where Acre comes in.”
Aldermore recently launched its ‘For Mighty Businesses’ campaign, which highlights stories of its SME customers who are looking to grow and innovate their business in a rapidly changing world."
Camilla has joined Acre as an Interim Lead to help grow the interim function. As the contract market within Sustainability takes shape, Camilla can provide flexible support to clients who may face challenges or embarking on new projects related to Sustainability.