aldermore bank

Over half of UK SMEs invested in sustainability in the last 12 months

Some 53% of UK SMEs have invested in their own sustainability during the last 12 months, spending an average of over £61,000, revealed the latest research from Aldermore Bank.

This represents a significant increase from last year’s data, which found that only 12% of businesses saw sustainability as a priority.

SMEs have employed a wide variety of strategies to become more sustainable — 65% of firms have invested in workplace recycling schemes, while 55% have opted to reduce their business travel and 50% have changed the materials they use to be more sustainable.

The research revealed that next year, SMEs are looking to further increase their investment in sustainability, with an expected average spending of over £78,000.

One in five (21%) SMEs are considering changing to an eco-friendly product or service, while 12% aims to invest in carbon offsetting.

The vast majority will look to fund this through personal finance products, such as personal savings (22%), personal investments (12%), their overdraft (18%) or a personal line of credit, like a credit card (8%).

Meanwhile, 31% are considering using business savings finance as an option to fund their investment in sustainability.

UK SMEs have also recognised the importance of having a lender which understands funding around sustainability, with nearly half (45%) wanting a partner with experience in providing finance for green projects.

In terms of the barriers to embracing more sustainable practices, 27% of SMEs think Covid and the broader economic climate are a limiting factor, while 7% found access to finance is an impediment.

Tim Boag, group managing director for business finance at Aldermore, said: “Businesses across the country are now re-evaluating their priorities and looking ahead to how they can innovate in the future.

“A particular area of focus for many SME businesses is the responsibility they have for the UK’s green transformation.

“SMEs are going to see increasing demand and expectation from their customers to deliver more sustainable products and services and will face scrutiny in terms of their own operation’s impact on the environment. 

“It’s hugely encouraging to see that businesses are increasingly willing to address the issue of sustainability and it will be the ingenuity and drive of SME owners that will help make much of the UK’s green transformation possible. 

“At Aldermore, we work closely to support our SME customers, helping them to access specialist funding which can help accelerate the transition to net-zero practices.”

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