Small businesses represent about half of all carbon emissions in the UK and therefore are a key part of the push for sustainability. 

SMEs are becoming more and more interested in the value of sustainable practice. 94% of small businesses have taken some action to reduce their carbon footprint, but 76% are yet to implement a full decarbonisation strategy. A sustainable transition is good for the environment but it also has great benefits for your company. 

In the diagram below we want to show you how sustainability can support all parts of your business. It can improve finance through reducing costs, help marketing and recruitment by attracting customers and employees, as well as protecting operations and technology by reducing the risk of environmental catastrophes.

Customer Reputation

Events like COP26, and natural crises like the droughts in Italy and China, are making people more aware of climate change and the environmental effect of their purchases. These disasters, made more likely due to climate change, have a profound effect on fundamental issues such as crop yields, water scarcity and energy resources. For example, factories in China have had to shut down due to a lack of hydroelectric power brought on by the drought. 

A report by Deloitte has found that in 2022, 34% of customers have avoided certain brands because of environmental concerns. According to the same report, the purchasing power of these customers is only going to increase. 

If you can accurately assess your sustainable credentials then the perception of your business will be greatly improved. Before the recent energy crisis, half of customers in the UK were willing to pay extra for sustainable products. Your business can benefit from this. 

Future Growth

Around two-thirds of SMEs are not recruiting the right talent in terms of sustainability. Around half of job candidates favour companies which value sustainability and this number rises among younger people. Championing sustainability in your business will help you to attract more job candidates and grow sustainable skills in your business. 

Government grants and other forms of financial support are also creating opportunities to grow your business. The UK Government has recently committed £31 million to help the industry cut emissions. This kind of support can contribute to the growth of your company by again decreasing costs and increasing profit margins.

The Task Force on Climate-Related Disclosure is a body pushing for businesses to be transparent about their sustainability credentials. If clients can see your sustainable credentials, your business will benefit. For example, Tesco is requiring their partners to take action toward decarbonisation. Scope 3 emissions are emissions occurring in the supply chain so smaller companies supplying larger ones will benefit from taking action. 

Avoid Future Legislation Penalties

International frameworks are pushing for governments to implement stronger environmental legislation. Preparation now for climate-related disclosure and carbon taxation will help reduce costs in the future. 

Larger corporations may have more resources to undertake in-detail reports, but SMEs are more nimble in dealing with rapid changes. The price of carbon has almost doubled since May 2021 as the UK looks to decarbonise which is increasing and will increase costs for your business. The best long-term solution is for your company to become more sustainable. Larger companies with more complex supply chains and operations can’t adapt their business practices as swiftly as SMEs can. For example, SMEs can change suppliers with more sustainable actions than larger businesses can. 

Legal fees and penalties will be avoided if you can grow your business’ sustainable credentials, especially at the cost of less developed competitors. 

Reduce Costs

Increasing energy efficiency can lower your emissions and reduce business costs. As you can see in the graph below, heating is the largest single energy use in offices. Installing technology such as smart meters, smart plugs and scheduling energy use during off-peak times will all save your business money. According to Carbon Trust, switching from conventional lighting to LEDs can create savings of up to 80% of your business.

The effects of recent soaring energy prices can be lessened by systems with solar panels and battery storage so your business has less reliance on the National Grid. Rising energy prices due to domestic or overseas socio-political issues can be avoided with these solutions as you can have more direct control over your energy supply and cost. 

You don’t have to do this alone. For example, CARES set up by the Scottish government has granted £54 million to increase energy efficiency in businesses since 2010. Business Energy Efficient Anglia offers grants of up to £20,000 to eligible SMEs. These actions can really help you to save money in the long term. 

Clean Growth UK and LoCASE are two other options for supporting your business and widening your sustainability skills. The former helped a family-run company called Energy Fairies to develop their concept of a thermal blind system made from sustainable materials which can be fitted to houses. LoCASE helped J&J Systems to promote sustainable products and install LED lights and solar panels. Both companies benefited from growing their business and reducing costs.

How can my business become more sustainable?

Now that you know that adopting sustainable practices within your business will reduce costs, avoid penalties, facilitate growth, enhance your business’ reputation and invite more customers, you can help your business become more resilient by taking action towards sustainability. 

Want an idea of how your business is doing right now? Take our Net Zero Scorecard and get a quick analysis of your biggest emission areas. We also plant 5 trees for every completed scorecard so you’ll already be having a positive impact!