FSB urges UK government to step in with green scheme

The Federation of Small Businesses (FSB) has thrown the weight of its members behind the move to combat climate change but called for help for SMEs.

It comes as research by the FSB found the majority of small firms concerned about climate change but only one in three have a plan in place to tackle it.

Many already taking steps with large numbers addressing energy usage, increasing recycling and investing in microgeneration, however the FSB believes more help is needed if SMEs are to play their part.

“Small businesses are keen to reduce carbon emissions, become more sustainable and achieve net zero status, but will require support and smart policies to help them along the way,” according to the Accelerating Progress: Empowering small businesses on the journey to net zero.

The FSB is holding its Small Business Net Zero Conference, to coincide with COP26, and the report found a clear majority (56%) of small businesses believe that the planet is facing a climate crisis, but only a third (36%) have a formal plan in place to combat climate change within their business.

FSB National Chair Mike Cherry said: “Adopting sustainable practices on the journey to net zero is everyone’s duty. Small businesses are keen to play their part, but often don’t have the resources, deep pockets and dedicated specialists enjoyed by their larger counterparts, so can find identifying and taking the necessary steps a challenge.

“With world leaders converging on Glasgow for COP26, we need much more than a talking shop. This moment must be a catalyst for governments to remove the barriers that are holding small businesses back. If we are to successfully transition to net zero, it’ll be through grassroots action, enabled by smart and supportive policies.

“Whilst the Chancellor rightly embraced some of our proposed changes in this area at the Budget, it was disappointing to see that the Government’s recent net zero strategy contained only four specific mentions of small business.

“We now need to see the changes announced last week brought in as swiftly as possible, so that small firms can install solar panels and heat pumps without fear of higher business rates bills.

“With inflation surging, cost is proving a significant barrier to the green investment we need. Small businesses require certainty and long-term support – they need to know for sure that their sustainable investments will be worth it in the long run.

“Equally, we have to avoid scenarios where landlords are barriers to progress – too often we hear from members who say they are ambitious when it comes to net zero, but the owner of their premises is less so.

“The challenge we face calls for practical action plans that can be implemented immediately, and we hope to see such plans emerge from this week’s conference.

“There’s no shortage of enthusiasm among small firms to reduce their impact on the environment, and the Government should take note – our report sets out a range of comprehensive recommendations which, if taken forward, will equip our 5.6 million small business owners with the tools they need to build a more sustainable future.”

The report said many firms have taken meaningful steps towards becoming more sustainable, with two thirds (67%) addressing energy usage, and nearly a fifth (18%) investing in microgeneration.

Amongst those who have not yet taken action to reduce energy usage, a significant proportion cite uncertainty around return on investment (24%) and a lack of sufficient capital to invest in assets such as heat pumps and solar panels (22%).

Where waste is concerned, two thirds (64%) of small firms have increased recycling and half (50%) have taken steps to eliminate waste wherever possible.

With regards to the move to zero emissions vehicles (ZEVs), close to half (46%) of those surveyed cite the extra expense of ZEVs as a barrier to change, and a third (35%) say poor provision of charging points is holding them back – one in six (16%) cite the lack of an established second-hand market for ZEVs.

As such the FSB has called on the government to launch a Help to Green initiative, modelled on Help to Grow, encompassing £5,000 vouchers that businesses could spend on environmental products and services. Vouchers could be used to fund an audit of a firm’s carbon footprint coupled with advice on how to reduce greenhouse gas emissions or enable firms to replace equipment and materials to become more energy-efficient.

The plan would also see the introduction of a scrappage scheme through which diesel commercial vehicles could be recycled in exchange for grants that could be put towards cleaner hybrids and ZEVs, providing businesses with £2,000 for each qualifying disposal.

Amongst those who have not yet taken action to reduce energy usage, a significant proportion cite uncertainty around return on investment (24%) and a lack of sufficient capital to invest in assets such as heat pumps and solar panels (22%).

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