Number of SMEs ‘going green’ doubles in 2023
New findings from Aldermore’s Green SME Index reveal that 489,000 UK small and medium-sized businesses qualify as ‘green’. This means that they have put formal measurements and commitments in place which will see them meet sustainability by the government’s Net Zero 2050 deadlines. In the last year, this number has more than doubled, with only 220,000 (4%) of businesses qualifying as green at the start of 2023.
A staggering 2,000,000 SMEs have started working on making their businesses fit for Net Zero. This figure remained relatively static in 2023, whilst 58% of SMEs aren’t currently making plans to go green.
Even though 68% of SME decision-makers see their business as playing a significant role in the battle against climate change, more pressing short-term factors such as reducing costs during the cost-of-living crisis are seen as a greater priority.
75% of UK small and medium-sized businesses believe that strong government legislation needs to be implemented to support companies as they attempt to tackle ongoing climate change. Nearly 7 out of 10 SME decision makers also think that larger corporations need to tackle these issues first.
Why should your business consider working towards the Net Zero 2050 deadline?
There are a variety of benefits for businesses who are making steps towards a greener future. Some include:
Stable energy costs: Unlike conventional fossil fuels, renewable energy sources aren’t subject to price volatility associated with fluctuating global oil prices. This stability provides businesses with more predictable and manageable energy costs.
Tax incentives and credits: The government offers tax incentives, grants and credits to businesses that investment in renewable energy technologies. These financial incentives can significantly offset the initial costs of adopting renewable energy solutions. For example, under current tax policy, any renewable energy acquisitions attract a 100% first year corporation tax write off. An asset costing £200,000 could result in a tax saving of £50,000 (based on the current main tax corporation rate of 25%).
Making your business more attractive to investors: With the investment landscape evolving, there’s a growing emphasis on sustainable investing. That means sustainable businesses are in a better position to attract capital from investors and shareholders. Having access to capital can promote growth, expansion and innovation.
Positive environmental impact: Using renewable resources helps reduce greenhouse gases, emissions and dependence on fossil fuels, thus contributing to mitigating climate change and promoting a more environmentally friendly future. Businesses can demonstrate their commitment to corporate social responsibility and sustainable practices through their investment in renewable energy technology.
Long-term sustainability: Renewable energy sources such as solar-energy, hydropower and wind-power are inherently sustainable since they rely on naturally replenished resources. Businesses that use renewable energy can plan for a more stable and sustainable future with reduced reliance on finite fossil fuels.
How can PMD help?
Investing in energy technology can be expensive, as can be seen by the cost of low emission vehicles compared to their fossil fuel powered equivalent. There’s also added complications as lenders look to lend against new technology. They don’t fully understand sustainable technology yet and in the case of vehicles especially, they have no experience with the future residual values of these assets.
In the short term, this may impact with lenders looking for higher deposits and lower balloon payments. PMD have combated this by using government schemes such as Recovery Loan Scheme that protects the lender and allows them to be more adventurous in their lending criteria.
PMD are aware of the challenges that many businesses face when it comes to green energy projects and the move towards Net Zero. We have access to a huge panel of lenders that can provide the right solution for businesses who are re-evaluating their operations and assets for a more sustainable future.
We also house a team of financial experts who can support you with a ranging of funding requirements. From asset finance and business loans to invoice factoring and commercial mortgages, we can secure the most competitive rates for your business.
For more information, get in touch with us on 0161 633 2548, email us at email@example.com or complete our simple online application form.