24 November 21

The Benefits of Achieving Environmental Objectives Whilst Delivering Economic Growth for SMEs

Currently the UK is trying to answer two objectives: rebuilding the economy and meeting Net Zero targets. Small and medium-sized enterprises are vital stakeholders in the solution given their contribution to societal welfare gains.

Green and inclusive growth is a matter of importance and, compared to larger businesses who require time to transition, SMEs can align with financial and environmental objectives with greater cadence. In simple terms, green and inclusive growth involves a transition to an eco-friendly, low-carbon economy which helps improve different societal elements.

More and more SME owners are involving sustainable practices across their businesses. Obviously, these benefit society on a broad scale, but what could this mean for companies themselves?

Increased new custom and repeat business

Consumers are becoming more aware of selecting service providers and products who offer sustainable solutions. Whether operations are emissions friendly, or the packaging is recyclable, customers are seeking eco-friendly companies and are happy to pay a premium. SMEs implementing sustainable practices will not only attract new customers but retain them too.

Decrease in running costs

It is stated that SMEs who adopt a green approach see their running costs decrease by around 30%. By investing in environmentally friendly strategies now the cost can be offset in the long term.

Part of the business evolution

72% of consumers pay attention to whether the products or services they are spending their money on are environmentally friendly. 80% are more likely to purchase from companies who are ahead of the curve and doing all they can to help the planet. Going green positions SMEs as leaders in the fight against climate change, strengthening their authority. `

Reduction in waste

Waste can be a byproduct of production, water, energy, or physical products themselves. As part of efforts to meet Net Zero many SMEs are becoming increasingly conscientious of how they handle waste. This can also help boost profit as well as offer an introduction to new technologies that can help streamline services or production.

Improved brand reputation

Showing responsibility towards developing an environmentally friendly business model is not just beneficial financially, but it can help elevate brand reputation. With consumers choosing green companies over competitors, the PR opportunities and marketing activities associated with being an environmentally friendly SME will

Higher employee retention rates

It is not just consumers who are interested in supporting environmentally conscious SMEs. A green company culture is also attractive for new and existing employees who support environmental policies themselves. Getting all members of staff onboard can help increase collaboration and staff morale.

Access to funding for SMEs

With the success of SMEs being vital to society and beneficial for the companies themselves, why is it that traditional lenders are so unwilling to offer support? Since the Financial Crisis there has been red tape in place for SMEs aiming to borrow capital from banks and other mainstream sources. Without funding SMEs cannot contribute to Net Zero and the growth of the economy.