Is it possible for small businesses to go green?

As organisations become more environmentally conscious, we weigh up how SMEs can do their bit to help.

30 October 2015

According to statistics from the Federation of Small Business (FSB), around one-third of its members believe that trying to operate a sustainable and energy-conscious business inhibits growth by putting a squeeze on their time and resources. Even if improvements to waste management, carbon reduction, and of course, energy saving measures are on the radar for many small businesses, implementing these in any meaningful way isn’t practical or manageable due to time and cost pressures.

However, given that corporate social responsibility (or CSR) is becoming a greater concern for businesses across every industry in the UK, small businesses may need to reassess their approach to sustainability, and find ways to improve their green credentials.

Here, we take a look at whether embracing green practices could really benefit the 99% of UK businesses that fall within the ‘SME’ category, and offer a few tips on how small businesses can start making steps towards a greener future.

The value of going 'green'

For the UK’s largest businesses, green initiatives are pivotal to financial performance and, as a result, business success. To give a couple of examples, since 2006, the Co-operative Group has saved in excess of £50m a year through its sustainability drive involving staff training and education. Likewise, restaurant chain Nando’s achieved a 9% reduction in energy costs across its UK eateries by encouraging employee behaviour change at shop-floor level.

female employee at eco retail business

Additionally, over 90% of young professionals said they would rather work for an environmentally-conscious company, suggesting that businesses which embrace green initiatives will benefit from their pick of the talent.

Many of the UK’s largest corporate outfits are well-versed in the benefits of CSR and are busy implementing initiatives accordingly. But for the majority of small firms, the advantages of being environmentally conscious are yet to be realised.

What’s standing in the way of small businesses and CSR?

Although the benefits of going green are clear (and demonstrable) when we look to large businesses, many smaller companies do not have the capital to invest up-front in energy efficiency or sustainability measures.

In recent years, the government has attempted to alleviate this. The Green Deal, for example, was conceived as a way to financially assist small businesses in making their business premises more energy efficient. But the reality is that the scheme has had little take up since its introduction in 2012 – maybe due to the long payback times for many cash-poor SMEs.

It’s clear that more attainable government support is needed to assist small businesses in their sustainability efforts. But with fewer than a fifth of FSB members saying that their current energy supplier has offered help or advice on improving efficiency, there’s certainly more to be done to support customers in their green endeavours.

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The smart and advanced meter roll-out

As the old adage goes: you can't know where you’re going until you know where you’ve been. One way in which the government and energy suppliers are helping small businesses to be more efficient is with the roll-out of sophisticated meter technology. This will essentially provide companies with more accurate and intuitive data about their energy consumption so they can make changes for the better.

young businesspeople going green

By 2020, smart meters will need to be offered to all domestic and small non-domestic consumers, making it easier for businesses to identify opportunities for greater efficiency, assist with energy procurement processes and help address over-consumption.

For many businesses, small but effective measures like switching to LED lights, encouraging employee behaviour change and installing more efficient equipment, aren’t beyond reach. It’s hoped the introduction of smart meters, alongside ‘energy services’ offerings from the suppliers, will provide a more solid justification for facilitating change.

A greener future

What we do know is that small firms do have an appetite for sustainability — even if the pay-off isn’t currently as significant as it is for corporate businesses. This desire is largely down to the obvious benefits of keeping the costs down and gaining competitive advantage.

However, for firms to seriously think about ‘going green’ and take on some of the more costly sustainability measures, there needs to be a more tangible business benefit alongside achievable cost and a low risk to their investment.

For more information about how you can better manage your small business’ energy bills, visit our homepage or get in touch with the Gazprom Energy team today.

The views, opinions and positions expressed within this article are those of our third-party content providers alone and do not represent those of Gazprom Energy. The accuracy, completeness and validity of any statements made within this article are not guaranteed. Gazprom Energy accepts no liability for any errors, omissions or representations.

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