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UK SMEs Need More Government Support for Green Policies

Michael Behr

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SMEs green
Research has found that a weaker economy is driving small businesses to prioritise cash flow and growth over the environment.

A new report has warned that the UK’s small and medium enterprises (SMEs) feel they need better government financial incentives to enable their green policies.

According to the new research from finance lender Capify, while SMEs are doing everything in their power to be greener, the current economic environment has created challenges for green initiatives.

The 140 companies surveyed in Capify’s 2021 Environment and Business Survey warned that while businesses are taking action to be more environmentally friendly, they cannot afford to put it at the top of their to-do list. 50% of the surveyed SMEs said that they do not consider reducing their CO2 emissions to be a priority.

As such, while companies are recycling more, reducing waste, creating a paperless workplace and cutting down on unnecessary travel, 60% of SMEs said that better financial incentives from the Government and lower costs for greener solutions are needed to encourage businesses to become more focused on reducing their emissions.

The research comes in the wake of the COP26 summit in Glasgow at the start of this month. This saw world leaders meet to discuss actions needed to prevent global temperatures from rising 1.5 degrees Celsius above the established baseline.

In addition, a third of SMEs want more clarity on what can be done to meet environmental commitments, while two thirds said that they don’t have an Environmental, Social, Governance (ESG) policy in place, 55% said they were not familiar with the term ESG.


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This comes despite 55% of participating SMEs saying that they were concerned about their industry’s impact on the environment.

A further 10% said that they would prioritise greener initiatives if they had more cash in the bank. Instead, SMEs said that they would prioritise retaining the extra funds to support cash flow, investing in more staff and training, or paying off existing debts.

Capify CFO/CCO John Rozenbroek said: “Climate change may be the defining issue facing our generation, but for small business owners battling the effects of the pandemic and Brexit, it’s understandable many need to put the immediate needs of their staff and business first.

“SMEs who responded to our survey said they’re doing everything in their power to be greener. And while most said they were concerned about their industry’s CO2 footprint, the current economic environment means all of that has to take a backseat for now.

“That’s unless the Government can provide support to make those changes for the business owners being hit the hardest. Without vital intervention, it’s difficult to see how this stalemate can be resolved.”

He added: “SMEs across so many sectors have proven their resilience on various occasions over the past two years, and it’s crucial for the economic recovery that these businesses continue to grow and succeed.”


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Michael Behr

Senior Staff Writer

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