It’s time to help SMEs adopt sustainability measures

Business Couple servicing in Cafe

We delve into the environmental ambitions of the UK’s small and medium-sized business community.

Last year we joined forces with Enterprise Nation to launch Plan it with Purpose, a programme designed to help small and medium-sized enterprises (SMEs) with their sustainability goals. This work continues with the launch of a new report, Green ambition: Unlocking sustainability opportunities for small businesse (PDF 7.7MB). Working with Enterprise Nation and the Enterprise Trust, we look at how we can support SMEs in taking meaningful action on climate change.

The report found most business owners want to make a difference, but only one in five plan to adopt environment, social and governance (ESG) measures. Similarly, only a third plan to introduce corporate responsibility (CSR) policies or track their environmental impact.

So, what is stopping from them from acting?

Awareness of key climate policies is low

The report surveyed more than 1,000 UK SMEs and found that there was a very low awareness of key climate change initiatives that could affect them:

  • Only 29% of SMEs have heard of or understand the Landfill Tax
  • Fewer than one-fifth understand or have heard of emissions trading – an important part of the government’s net zero policy
  • Specific sectors were in the dark about key policies directly affecting them, with only 13% of construction, home repairs and improvement firms having heard of the government’s heat and buildings strategy, part of the path to net zero by 2050.

How can we support SMEs?

According to the British Business Bank, SMEs are responsible for a third of UK emissions, 1 so it’s crucial that they receive support to have time to address environmental concerns within their businesses. The report found half of SMEs would adopt environmentally friendly business models and solutions if they could get financial support or grants to help with the cost.

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.”

The report recommends giving SMEs greater support through:

  • clearer communications from the government on its climate policies to help businesses plan investment in skills, technology and organisational change
  • offering financial rewards for taking environmental action
  • championing SMEs for doing the right thing.

Adam Winslow, Aviva UK CEO, 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.

It’s a question of survival… in more ways than one

The report shows small firms that don’t adopt green measures or track their environmental outputs could be at a disadvantage when tendering for valuable public and private sector contracts. At the moment, 65% of SMEs don’t do this.

This year, it will become law for large firms to disclose certain climate-related financial information. As a result, it’s likely those companies will begin to look harder at the emissions of the SMEs in their supply chain.

Find out more

If you want to learn more about the sustainability opportunities and challenges the UK’s SMEs are facing, the report (PDF 7.7MB) is a great place to start.

You can also find a wealth of information, advice, educational resources and online events for SMEs on a range of sustainability issues at the Plan it with Purpose hub. This partnership with Enterprise Nation supports one of our seven key steps for change as outlined in the Building Future Communities report and Aviva’s Sustainability Ambition.

Download the Green Ambition report now (PDF 7.7MB)

Explore Business perspectives

Your hub for expert insight and knowledge

Featured articles