Green Ambition: unlocking FUTURE opportunities for small businesses
Green Ambition: Unlocking sustainability opportunities for small businesses
Green Ambition: Unlocking sustainability opportunities for small businesses, a major report from Enterprise Nation, supported by Aviva and the Enterprise Trust delves into the environmental ambition of the UK’s small and medium sized business (SME) community. The report finds that while most small business owners want to make a difference and have objectives beyond profit, only one in five plan to adopt Environment, Social and Governance (ESG) measures and only a third plan to introduce Corporate Social Responsibility (CSR) policies or track their environmental impact.
Amidst a historically high level of concern over environmental issues in the UK’s year as President of COP26, the report identifies the need for Government to step up support for entrepreneurs to help them adopt green measures through clearer communication on climate policy direction, offering financial rewards for taking environmental action and championing and celebrating the outliers to reach Net Zero goals.
Only one in five small businesses plan to adopt sustainable measures despite high level of concern over green issues, new report finds
Small businesses need enhanced support to adopt sustainable business practices
London: February 17, 2022. Only a fifth of UK SMEs plan to introduce sustainable measures like Environment, Social and Governance (ESG) despite a historically high level of interest in climate change and high-profile Government targets to cut emissions, a new report has found.
In the year of the UK’s Presidency of COP 26, the nation’s entrepreneurs are conflicted. While most say they want to make a positive impact through business, only a third plan to track their carbon footprint.
According to the British Business Bank, SMEs are responsible for a third of UK emissions* but Green Ambition: unlocking sustainability opportunities for small businesses, a new report from Enterprise Nation, Aviva and the Enterprise Trust found many have barely started the process of addressing the environmental concerns in their business operations.
The report, written by think tank The Entrepreneurs Network, which surveyed more than 1,000 UK SMEs with polling firm YouGov, also revealed awareness of key climate change initiatives that could impact small business was very low.
Only 29 per cent have heard of or understand the Landfill Tax and fewer than one fifth understand or have heard of ‘emissions trading’ – set to be an important plank of the Government’s Net Zero policy.
Specific sectors were also in the dark about key policies affecting them directly. For example, only 13 per cent of construction, home repairs and improvement firms had heard of the UK Government’s Heat and Buildings Strategy which sets out the UK’s approach to decarbonise 19 million homes and introduce renewable energy.
The survey found that if financial support or grants were available, half of small firms would adopt environmentally friendly business models and solutions.
Emma Jones, founder of small business network and business support provider Enterprise Nation, said: “At the moment sustainability and environmentalism are high on everyone’s agendas – including SMEs but translating that into accessible, practical and affordable actions requires a major shift.
“This report shows that while there is no shortage of enthusiasm, there’s also very little real action either. Small firms face dramatically different challenges to large corporates, and we must develop a simple blueprint and offer clear advice to unlock innovation and hit climate change targets.”
Adam Winslow, CEO of Aviva UK and Ireland General Insurance, said: “Small businesses power our economy. Their ingenuity, enterprise and innovation will be crucial if the country is to have any hope of creating a sustainable, low carbon future, and meeting the climate challenge.
“We hope policy makers will use this report to make sure small businesses, and the invaluable contribution they need to make, are not overlooked as together we aim to build communities that are fit for the future.”
Helen Booth, director of enterprise charity the Enterprise Trust, said: “There’s clear evidence in this report that one of the most effective ways to engage small firms and encourage them to adopt greener business models is to stress the opportunities for growth it offers and to consider introducing financial incentives such as grants or loans.
"It might seem like an achingly obvious thing to point out, but if we’re serious about leading the way in the global transition to net zero, and seeing the benefits of that in the wider economy, we must ensure entrepreneurs feel more supported and that they have time to create the skills they need to make these changes do-able.”
The research found despite most SMEs (64%) polled citing priorities beyond profit maximisation such as employee wellbeing (24%) and promoting green values (16%), engagement with ESG and CSR was low. Across sectors between 10 per cent and 35 per cent of businesses did not even know what ESG means, and between 10 per cent and 30 per cent didn’t know the definition of CSR.
The report found small firms that don’t adopt green measures could be at a disadvantage when tendering for valuable public and private sector contracts, if they don’t track their environmental outputs. Currently two thirds (65%) do not. New mandatory climate disclosures for large firms are to be enshrined into legislation this year and, as a result, large firms complying with the science-based targets necessary to meet the ambition of limiting warming to 1.5 degrees will increasingly look at the emissions of the SMEs in their supply chain.
The report identifies three key recommendations for the government to support entrepreneurs to adopt green business models:
Offer clear communication over the long-term direction of policy to plan investments in skills, technology, and organisational change.
Financially incentivise and reward the adoption of green solutions.
Champion SMEs that do the right thing
Christofer Fisher of Manchester-based vertical farming start-up, Aztec Farms, wants to see greater recognition for Britain’s green SMEs from government and the private sector.
Although the report found that not all businesses would recommend making green changes, Christofer believes it is essential that every business acts to stop climate change.
“In a post COP26 world it is evident that change needs to come from every business to make the world a more sustainable place; we can’t rely on just the big players to make the slow moves.”
And there is evidence of impact investors moving towards small firms that can demonstrate their carbon footprint.
On-demand, emission-free delivery firm Xero-E landed half a million pounds, the majority of which was impact investment, to help it launch its unique distribution solution in 25 UK cities over the next few years.
The firm was able to demonstrate its environmental impact thanks to a sustainability reporting algorithm it developed with Imperial College London.
Founder and CEO Steve Evans said: “Because of our algorithm we are able to exactly quantify our impact in human lifetime days. That includes not just the important savings in carbon dioxide (CO2), nitrous oxide (NOx) and fine particulates (PM2.5), we make by using cycles, cargo bikes, electric scooters, cars and vans for all our deliveries, but also the NHS costs we save.
“This our mission, that’s why we exist, but it’s also important to be able to quantify this to impact investors.”
*https://www.british-business-bank.co.uk/press-release/smaller-businesses-responsible-for-around-half-of-all-uk-greenhouse-gas-emissions-from-businesses-british-business-bank-research-reveals/
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About Enterprise Nation
Enterprise Nation (https://www.enterprisenation.com/) is the UK’s leading small business network and business support provider delivering support to more than 50,000 small businesses every month. The adviser platform sees hundreds of regular connections with small firms reaching out for advice. Its aim is to help people turn their good ideas into great businesses – through expert advice (including a comprehensive resources library), events, acceleration support and networking. In 2020 it launched two high profile business support initiatives: the Amazon Small Business Accelerator and the Recovery Advice for Business scheme which collectively aim to support thousands of small firms impacted by the pandemic.
Enterprise Nation was founded in 2005 by British entrepreneur Emma Jones CBE, also co-founder of national enterprise campaign StartUp Britain. She is author of best-selling business books including Spare Room Startup, Working 5 to 9, Go Global, Start a Business for £99 and the StartUp Kit, Going for Growth. She is a frequently called-on and regular media commentator on a range of issues which affect the UK’s growing number of SMEs. In 2018 FTSE 100 entrepreneur and HomeServe founder Richard Harpin invested in Enterprise Nation with the aim of creating a ‘more entrepreneurial Britain’. https://www.enterprisenation.com/
About the Enterprise Trust
The Enterprise Trust was launched in 2011 by Richard Harpin, the entrepreneur behind the UK’s leading home repairs and improvements business HomeServe, now a FTSE 250 company valued at more than £4bn. The charity is run by Helen Booth and aims to create an impact and leave a legacy by helping individuals from all backgrounds to realise their potential as independent wealth generators. In 2020 the charity launched a research arm to extend its reach and provide important insight, new thinking and evidence-based problem-solving around the key issues affecting the UK’s small business community. https://www.enterprise-trust.co.uk/
About Aviva
We exist to be with people when it really matters, throughout their lives. We have been taking care of people for 325 years, in line with our purpose of being ‘with you today, for a better tomorrow’. In 2020, we paid £30.6 billion in claims and benefits to our customers.
Aviva is invested in our people, our customers, our communities and our planet. In 2021, we announced our plan to become a Net Zero carbon emissions company by 2040, the first major insurance company in the world to do so. This plan means Net Zero carbon emissions from our investments by 2040; setting out a clear pathway to get there with a cut of 25% in the carbon intensity of our investments by 2025 and of 60% by 2030; and Net Zero carbon emissions from our own operations and supply chain by 2030. Aviva has been leading this agenda for decades: Aviva was the first international insurer to go operationally carbon neutral in 2006 and we are champions of renewable energy and energy storage at our offices, allowing us to achieve our 2030 carbon reduction target (70% reduction on 2010 levels) 10 years early. Find out more about our climate goals at www.aviva.com/climate-goals and our sustainability ambition at www.aviva.com/sustainability.
Aviva is a Living Wage and Living Hours employer and provides market-leading benefits for our people, including flexible working, paid carers leave and equal parental leave. Find out more at https://www.aviva.com/about-us/our-people/
We are focused on the UK, Ireland and Canada where we have leading market positions and significant potential. We will invest for growth in these markets. We will also transform our performance and improve our efficiency. Our transformation will be underpinned by managing our balance sheet prudently, reducing debt and increasing our financial resilience. We also have strategic investments in Singapore, China and India.
At 30 June 2021, total Group assets under management at Aviva Group are £522 billion and our Solvency II shareholder capital surplus is £12 billion. Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
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