The road to Net Zero: A country divided?
The UK’s North and South divide continues to widen as businesses begin their journey on the road to Net Zero, according to new findings from Time Finance.
Exploring business efforts to “Go Green” in the New Year, the alternative finance provider found that whilst 70% of the UK business owners surveyed have already implemented measures to become more sustainable (from partnering with sustainable suppliers to investing in electric vehicles and other eco-friendly machinery), the findings paint a concerning picture of regional challenges and setbacks.
Firms based in central and northern regions of the UK reported concerns surrounding the affordability of making sustainable investments, with 100% of East Midlands-based firms and almost 1 in 5 North West firms surveyed reporting that the cost of implementing green initiatives is deterring them from taking steps to improve their sustainability. Comparatively, business owners in the Southern and Welsh regions of the UK did not see affordability as a barrier to change.
As a result, only 20% of northern-based firms will consider green investments, such as resources, equipment and training, over the next 6 months compared with 100% of South East, South West and Welsh regions who will. Half of those businesses will use existing cashflow to finance their sustainability plans, 1 in 4 will use their existing bank provider, and 1 in 4 will turn to an alternative finance provider.
Ed Rimmer, CEO at Time Finance, commented: “Our impact on the environment dominated the headlines following COP26 and the pressure is on British businesses to act now. For those already taking steps to reduce their carbon footprint, it refocused their attention and for those that were yet to embark on environmental initiatives, the road to net zero was being paved out for them. What we can see in our survey is that for many intent is there, but SMEs, many of which are still in post-pandemic recovery, are facing a lack of capital, encouragement and confidence to invest in more sustainable practices.
“There appears to be a considerable difference between businesses in the North and South and the progress they are making with their efforts to go green. As a national funder, we want to ensure that every business regardless of location, breaks down those barriers and can bring whatever their investment plans are to life.”
Overall, 2 in 3 SMEs don’t think there is enough government support to help support the adoption of green initiatives. 45% believe there should be more guidance available on what measures can be taken to improve their carbon footprint and what systems can be put in place to track a business’ impact on the environment. 22% noted that there should be a skills training and investment programme to support a green economy.
Ed continued: “Interestingly, it doesn’t just come down to funding. There appears to be a gap in knowledge, guidance and skills training available. To me it is clear that moving closer to net zero is about incremental change. Business owners overcome a variety of challenges every day and for this very reason, they simply can’t give all of their time and resources to just one (albeit pressing) issue. That said, the pressure to address climate change still remains. If SMEs are to act now, they need more support.”