The number of ‘green’ small and medium-sized enterprises (SMEs)—businesses committed to eco-friendly practices—has surged almost threefold since the start of 2023, according to Aldermore‘s latest ‘Green’ SME Index.
The Index, which monitors the progression of businesses towards net zero, shows that 715,000 UK SMEs now have formal measures in place to achieve sustainability by 2050, a significant rise from the 220,000 recorded at the start of last year.
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The Index further reveals that 65% of UK SMEs have embarked on the journey to align their operations with net zero objectives.
Additionally, 26% of SMEs are actively evaluating their sustainability goals, and 7% are in the advanced stages of their green transition.
Despite the growing adoption of sustainable practices, the formal tracking of such measures has not seen a similar uptick. The Greenhouse Gas (GHG) Protocol outlines various scopes of emissions, with Scopes 1, 2, and 3 categorising emissions directly and indirectly associated with business activities, and Scope 4 accounting for the positive environmental impact of products or services.
Investment in sustainability among SMEs, however, appears to be on the decline. On average, SME leaders dedicate 18 hours annually to sustainability strategies, with the total investment averaging £47,900, a decrease from the previous year’s £83,517.
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By GlobalDataThe report says SMEs are calling for more robust government legislation to aid their climate change efforts, with 73% indicating the need for governmental support.
Furthermore, 71% of SME decision-makers believe that larger corporations should address environmental issues first.
This research was conducted by Opinium for Aldermore in April, surveying 1,000 senior SME decision-makers.
Aldermore commercial director for commercial real estate John Carter said: “We are seeing many businesses become ‘green’ in a relatively small space of time, this is hugely encouraging as SMEs make up the majority of private sector businesses in the UK and as such, they will always be at the heart of our national transition to net zero.
“However, SMEs need more help if we’re going to achieve our ambitious net-zero targets. We can already see that SME business leaders are struggling to fund sustainability initiatives and have not been able to make the formal commitments which will be required for us to really assess the impact of their efforts on our environment.
“For businesses that do embrace change, there can be commercial opportunities. SMEs estimate they could add thousands to their bottom line according to our data. At Aldermore, we’ve seen many of our customers pivot or diversify into exciting new spaces which meet the growing demand for ‘greener’ solutions.”
