Lack of policy-focused leadership and financial constraints are both holding back this major part of the economy – estimated to represent half of the UK’s business emissions  – from pursuing green growth.

Last month, Small Business Britain polled more than 2,000 SMEs – small to medium enterprises –  to examine their sustainability efforts, requirements, ambitions, and prospects.

Four in five business owners want to improve their sustainability, the survey found. Almost one in four view ‘going green’ as a growth opportunity.

Yet the survey – analysed by Oxford Brookes Business School – found almost two thirds (64%) want greater support to make sustainability improvements. Two fifths – 41% – feel lack of finance is a substantial barrier to action.

Over three quarters – 77% – of SME owners say they have already taken steps to make sustainable changes. But only 20% feel their action is significant, indicating a gap between the level of change needed and current progress.

The parties’ ‘Small Business, Green Growth’ report calls for greater leadership across government and the private sector, particularly around providing access to finance, if Britain’s employment and commercial backbone is to reach its full potential in sustainable growth, and achieve Net Zero by 2050.

Recent economic pressures – from the cost-of-living crisis to recession – are clear factors behind 34% of business owners feeling restricted in their efforts to reduce emissions. 65% want more grants to be made available.

Despite this, 25% of small businesses recognise the financial benefits and business opportunity of going green. The trend is most visible among younger start-ups. With customer and supply chain demands growing, as sustainability increasingly becomes seen as a critical issue, small businesses are also being driven by their own personal values.

Wilmer Carcamo, co-founder, Caribe Coffee Co. said: “As a small business, we prioritise sustainability as our customers expect that from us, and it’s the right thing to do. We use compostable packaging for all our coffee bags, donate our coffee sacks to a reuse and recycle community project, and would love to invest in an electric van and go further – but finances are a barrier.

“We see the desire to do more in the small business community but people are limited and need more support – while sustainable practices can unlock cost savings, this needs to be more affordable.”

“There are mounting concerns about climate change and the transition businesses and society need to make in the coming years,” said Michelle Ovens CBE, founder of Small Business Britain.

“Our research clearly shows that small business owners overwhelmingly want to go greener – driven by their own ethics as well as growing consumer expectations and supply chain demands. However, the path they need to take is not clear at all. We need more leadership and ambition – across society, the private sector and with Government – to engage and educate this vital part of the economy and to find innovative solutions for the major challenges businesses now face, particularly around financing greener growth.”

Recognising the need for enhanced practical support, Small Business Britain and BT also today launched applications for a new free, six-week ‘Sustainability for Small Business’ training programme to empower small businesses across the UK to better understand their environmental impact and embrace more sustainable practices and opportunities for change.

Delivered entirely online, with over 1000 places for small businesses available, it will focus on key sustainability topics such as measurement, accreditation, and financing.

“The commitment to sustainability among small businesses in the UK is growing, but there are challenges that still need addressing,” said Chris Sims, Managing Director, Small and Medium Business at BT.

“BT has already supported more than 1 million small businesses with digital skills support, but we are determined to help even more, which is why we are launching these new initiatives. They are designed to provide enhanced practical support to the UK’s entrepreneurs, so they can cut their CO2 emissions, implement lasting sustainability principles into the core of their businesses, and drive forward the UK’s net zero agenda in a manageable way.”

Read the report here.

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Recent back-tracking by Rishi Sunak in crucial green drives, including delaying the phasing out of new fossil-fuelled cars and approving more oil extraction in the North Sea, are weakening firms’ intentions towards sustainability, says the report, Small Business Perspective on Sustainability – The Mandate for Support from a new UK Government”.

Ahead of this year’s still undeclared General Election, researchers hired by Novuna Business Finance sought to measure SME owners’ desire to boost their firms’ sustainability.

Clearer guidance from Westminster is needed across a range of green initiatives, researchers found, if firms making up Britain’s commercial heartland are not to lose heart.

Two years ago, Novuna’s research reveals, fewer than 60% of SMEs were working on at least one internal sustainability drive.

By February 2024, the survey finds, that share had soared to 92%.  Typical small businesses now juggle three or more green drives at the same time.  Nearly a fifth are managing at least five projects.

Topics most exercising SMES in their green-seeking ambition, the study shows, include

• reviewing or switching energy usage (31%),
• having a positive environmental impact on a firm’s immediate community (29%),
• cutting out packaging and waste/recycling (28%)
• switching to greener forms of transport (cycling schemes, electric vehicles, public transport).

The report also highlights how Sunak’s recent policy U-turns, intended to retain Far Right voters and science-deniers, are sowing doubt in Britain’s boardrooms.

Nearly a quarter of small businesses now feel less confident about obtaining grants to fund green initiatives (23%), Novuna’s report discovers. One in five told the survey they are now looking to adopt green and sustainable measures at a slower pace.

Fourteen per cent said green initiatives have fallen in their business priorities, reflecting ministers’ changes of heart.  12% were blunter, agreeing with the view “If the government doesn’t take sustainability seriously, why should I?”

Novuna asked small businesses too what green policies they hoped for from a new government.

Topping the firms’ wish list, 73% sought more and firmer Whitehall backing for renewable energy. 72% seek wider, more substantial investment in the green economy.  On a par were government pledges to ban single-use plastics, crack down on littering and plant more trees.

The answers imply frustration widespread in boardrooms at Labour’s retreat from its  pledge to spend £28 Billion from day one to expand low carbon power.

From Novuna Business Finance, researcher Jo Morris commented: “Too often the sustainability debate circles around big brands. There is an urgent need to better understand the small business community’s views on key issues.”

“Our report contributes a better understanding of SMEs, the crucial role they play in supporting sustainability – and the support they need to achieve more.”

For a copy of Novuna’s report, email here.

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In its response to Ofgem’s current consultation on the standing charges issue, the FSB flagged complaints from its members of rises as high as 12-fold in the per day fee set by energy suppliers, regardless of energy usage.

While standing charges are capped for household customers, they are now on a second year of hikes for business customers.

Small businesses are often left, the FSB claims, with no explanation from suppliers, and have no means to challenge what they call stealth charges.

FSB national chair Martin McTague said: “Energy suppliers have some explaining to do on the sudden and dramatic hikes in standing charges, which become a regressive form of billing that hamper small business growth, confidence, and investment.

“Even now that the wholesale energy prices have come down from the peak we saw in 2022, small businesses are still scratching their head over skyrocketing bills.

“While parts of the standing charges are being reinvested into green and energy efficiency measures, there’s little to no clarity on the cost make-up, and small businesses are forced to pay the increases with no options and explanations from their energy suppliers.

“Small firms do not have the same protection as household customers when it comes to energy price hikes. Business energy bills could continue to stay high if the standing charges system remains the way it is now.

In its evidence to the Ofgem enquiry, the group cited an auto parts business in Dorset was paying. After multiple increases over two years, standing charges of 70p per day in July 2021 rose to £9.69 per day.

A second case had a tech firm in the Highlands suffering a jump in its standing charge from 32p to £7.50 per day, adding £2,500 to its annual bills.

Currently, “operational costs” of energy suppliers make up around half of standing charges costs. The lobbyists conceded that many elements of operational costs are relevant to SME supply, including metering, customer support and billing collection.

Standing charges also incorporate costs related to energy supplier failure and acquisition from suppliers taking on failed businesses under the Supplier of Last Resort (SOLR) procedure.

FSB is calling for:

• greater transparency on suppliers’ calculations of standing charges, including disclosing any commission to third-party Intermediaries TPIs
• Exclusion of SOLR acquisition costs that will only directly benefit the profits of larger energy suppliers
• Ofgem and energy suppliers work together to narrow the discrepancy of standing charges between rural and urban areas

FSB’s latest Small Business Index shows utilities were once again the most commonly-cited cause of rising cost pressures, chosen by 62.5% of small firms, a position they have held since Q1 2022.

The business group is urging Ofgem to work to ensure that standing charges do not continue to rise at a time when small firms are squeezed under rising business costs.

Said McTague: “A more transparent standing charges system is needed to ensure market competition and, most importantly, to enable small business customers to understand clearly what they are paying for.

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Launched in summer 2020, Electoverse at first addressed private motorists. Still in beta-testing phase, its latest variant is the service provider’s offering assisting operators of small corporate fleets to manage charging, cost-monitoring and fulfillment.

All charges appear in one consolidated invoice, enabling a full overview of the business’ EV charges at the tap of a finger, according to the powerco.

Octopus says worldwide chargepoints for the Electroverse brand now exceed 430,000 across 470 operators’ brands, all accessible with a single charge card.

Features available include a interactive global map showing chargers and availability, a route-planner, and in-car support with Apple CarPlay, AndroidAuto and other platforms.

Today’s launch comes as EVs continue to climb in popularity; over 20,000 new UK car deliveries were made in April alone, says Octopus, citing industry statistics.  It positions Electroverse as a source of greater confidence in EVs among SMEs adopting low carbon mobility.

Product director Matt Davies observed : “Octopus Electroverse is revolutionising EV public charging, with just one card and app to use with hundreds of charge point brands. Accessing over 430,000 public charge points, we’re over the moon to now bring our simple and seamless EV charging solution to businesses.

“This will be a game-changer for companies making the switch and will help them manage their EVs easier than ever before.”

The Electroverse for Business Beta phase is available for businesses to sign up to today; see this link. The subscription-based model will follow shortly.

After today’s initial targeting of SMEs, businesses of all shapes and sizes will be catered for later this year.

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The Federation of Small Businesses & the British Chamber of Commerce independently allege that price gouging last summer by suppliers and their brokers has left family firms and small traders tied into excessive deals.

The resulting plight afflicting as many as 1 million SMEs amounts to Britain’s “greatest mis-selling scandal since PPI”, a third trade group has reportedly alleged in its letter to energy secretary Grant Shapps.

The groups say their polling indicates many member enterprises were left hooked on expensive deals, imposed last year as prices to commercial customers soared as much as fourfold in the aftermath of Russia’s Ukraine invasion.

At the time, say the groups, the effects on wholesale power prices of Putin’s aggression left small firms struggling to find suppliers. Many either refused outright to supply small businesses or else demanded hefty signing on fees upfront.

Now the Federation of Small Business is calling on energy ministry D-ESNZ to allow small traders to renegotiate fixed deals struck when prices peaked last summer.

After six months of support delivered by its Energy Bill Discount Scheme, two weeks ago the government drastically cut help for firms still facing unprecedented heat and power costs.  Though extended until next March, its new levels offer less generous compensation.

The Federation of Small Businesses wrote last month to ministers and to Ofgem, seeking their approval to free up firms wanting to re-open talks with suppliers and their agents. “Blending and extending” contracts is among solutions promposed by the advocates, enabling members to leave dear fixed deals, and opt instead for today’s partial recovery of normality.

“Small firms that fixed their energy contracts last year will see their bills rise by three or even four-fold as prices revert back to high prices and to pre-Energy Bill Relief Scheme levels”, FSB policy director Tina McKenzie wrote this month on the group’s blog.

“We found that 24% of small firms are trapped in fixed contracts, and of them, 28% say they could be forced to downsize, close or restructuring their businesses,”, McKenzie warned. “This equates to 370,000 small businesses, and not to mention the jobs and communities which depend upon them.

“Let’s not forget these small businesses are the ones that pushed through Covid and the energy crisis in winter despite their very limited resources. These firms deserve a fighting chance this year”, she wrote to FSB members.

As reported in today’s Guardian, the Confederation of British Metalformers has told Shapps expensive price commitments snagging up to 1 million firms is Britain’s “biggest mis-selling scandal since PPI”.

Quoted by the newspaper, CBM president Stephen Morley tells the energy secretary that small manufacturers face a “perilous situation”, threatening “another nail in the coffin of the British manufacturing sector”.  Morley alleges that energy suppliers and brokers make “huge profits at the expense of UK competitiveness”.

Ofgem reportedly wrote last month to chancellor Jeremy Hunt, telling him that companies were facing energy bills which are “higher than is explained by market conditions”.  The regulator says it has learned of steeply increased deposits sought by suppliers to guarantee commercial supply, including dearer standing charges.

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In 2023’s first three months Brighton Energy Co-op has allocated cash lingering on from the UK’s now vanished EU membership, passing it to ten Sussex firms to aid onsite generation with solar PV arrays.

In only one quarter enterprises including a tea importer, a carpet wholesaler and a conservation project have together gained around 1.5 MWp in PV capacity, generating an expected 1.43 million kWh for qualifying firms, located across the seaside city and its Sussex hinterland.

The allocation brings to 19 the number of firms to benefit from the co-op’s anticipatory application for solar grants, made by Brighton Energy in the dying days of this nation’s forty-seven year EU membership.

A further 15 solar projects are due to be completed by June, according to the co-op’s latest newsletter. It is due to pay out a further £300,000 of grants before October.

The cash comes from Brussels’ Regional Development Fund.  Brighton Energy worked with Sussex Local Enterprise Partnerships to distribute £25,000 packages under its Community Solar Accelerator programme, supporting up to 40% of a qualifying SME’s new rooftop installation.

“We often found that other businesses saw their neighbours using our grant to install solar panels on their roofs. Several of these neighbouring businesses then decided to install their own PV arrays even without our grant!”, Brighton Energy’s latest newsletter relates.

Last year the Brighton citizens brought to fruition their biggest ever PV project, a giant 0.57 MW set of arrays at Rathfinny Wine Estate, near Alfriston, pictured. Funded to the tune of £400,000 by around one hundred small investors, the project has been nominated by its installer Genfit for a regional energy efficiency award.

Now thirteen-years old, Brighton Energy has in its history raised £2.5 million for free PV on schools, from 500 local investors placing stakes from £300 upwards.

Its next project is assisting in continuing consultations aimed at setting up a community-focused energy benefit company on Crawley’s Manor Royal estate next to Gatwick Airport.

Read more about Brighton Energy here.  Interest declared: The present writer is a member of Brighton Energy.

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