Now the world leaders have departed the stage from the COP26 summit in Glasgow, businesses are looking to adjust to a more sustainable future.

According to new research, many are addressing energy usage, increasing recycling and investing in microgeneration, but only a third of those have a formal plan to tackle climate change within their business.

UK’s largest business group, the Federation of Small Businesses (FSB), has urged the Government to launch a “Help to Green” initiative, roll out a nationwide scrappage scheme and accelerate plans put to the Business Secretary over the summer to alter business rates to incentivise green investment.

The FSB study, Accelerating Progress: Empowering small businesses on the journey to net zero, was launched to coincide with COP26, as well as FSB’s Small Business Net Zero Conference and received  1,200 responses.

Amongst those who have not yet taken action to reduce energy usage, a significant proportion cite uncertainty around return on investment (24 per cent) and a lack of sufficient capital to invest in assets such as heat pumps and solar panels (22 per cent).

Over half (54 per cent) of small businesses say that grants or low-interest loans would be a strong incentive to become more energy-efficient, while three in 10 say a discount on business rates would encourage them to do so.

In areas such as electric vehicles for business use, nearly half surveyed said they named the extra expense of ZEVs as a barrier to change, and a third blamed poor infrastructure and a lack of charging points.

Where waste is concerned, two thirds (64 per cent) of small firms have increased recycling and half (50 per cent) have taken steps to eliminate waste wherever possible.

In light of the findings, FSB is urging the Government to:

  • Launch a Help to Green initiative, modelled on Help to Grow, encompassing £5,000 vouchers that businesses could spend on environmental products and services.
  • Introduce a scrappage scheme through which diesel commercial vehicles could be recycled in exchange for grants that could be put towards cleaner hybrids and ZEVs – providing businesses with £2,000 for each qualifying disposal.
  • Work with Ofgem to establish a taskforce of suppliers, small business landlords and business groups to agree on how to cut energy use in rented premises.
  • Lower the capital requirements banks must adhere to when lending to businesses for green improvements. Current capital requirements act as a brake on banks releasing funds in the form of loans to small businesses looking to invest in green technologies and improvements.
  • Set out target-based infrastructure strategies to deliver necessary ZEV charging infrastructure by 2030.

FSB National Chair Mike Cherry said: “Adopting sustainable practices on the journey to net zero is everyone’s duty. Small businesses are keen to play their part, but often don’t have the resources, deep pockets and dedicated specialists enjoyed by their larger counterparts, so can find identifying and taking the necessary steps a challenge.

“With inflation surging, cost is proving a significant barrier to the green investment we need. Small businesses require certainty and long-term support – they need to know for sure that their sustainable investments will be worth it in the long run.

“Equally, we have to avoid scenarios where landlords are barriers to progress – too often we hear from members who say they are ambitious when it comes to net zero, but the owner of their premises is less so.”

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