The barriers to sustainability… and how to overcome them
15th October 2020
Throughout the coronavirus pandemic, small and medium-sized businesses across the country have faced significant challenges, making tough decisions they may otherwise would have avoided. Time and again, they’ve shown exactly the qualities required to start a business in the first place.
The journey has been tough, but as the country and the economy begins to recover, businesses must continue to make bold decisions. Collectively, SMEs make up the UK’s biggest employer, and so will play a significant part in reducing the nation's carbon emissions to net zero by 2050.
Encouragingly, in a recent survey carried out by Opus Energy, more than half of 1,000 SME business leaders said that sustainability has become more important to their business in the wake of the coronavirus pandemic.
But many also said there are several hurdles in their way, preventing them taking greater strides. What’s holding them back? Read on to find out what’s holding them back, as well as what they - and you - can do to overcome these challenges.
‘I need to stabilise my business’
Coronavirus has delivered a devastating blow to the economy and UK businesses. SMEs have been disproportionately affected, as they lack the financial reserves of big business and multinational corporations.
Around a third of SME business leaders say that stability is their main focus, holding them back from taking bolder action on sustainability. Yet previous recessions have proven that sustainability can present a lifeline for businesses during tough times. After the 2008 financial crisis, 93% of CEOs believed sustainability would become a crucial part of their company’s future success.
This was about building trust; customers had started to vote with their money, choosing companies which aligned with their values.
Post lockdown, the public is restless for change. The huge demand for a Green Recovery and the growing number of people choosing to shop sustainably. So, while businesses need to get themselves in check financially, abandoning their sustainable development goals would be highly damaging and could risk losing any goodwill.
Finding the right balance between financial necessity and sustainable responsibility will therefore be crucial to business success and in the fight against climate change.
‘It’s too expensive’ / ‘it doesn’t make sense financially’
Many businesses - around a quarter in our survey - cite cost as the biggest barrier to sustainability for their organisation, while another 25% said it’s because shareholders and investors don’t see the link between sustainability and profit.
In fact, a big part of being sustainable is about saving money. Some sustainable technologies such as solar panels initially require - investment, these often save you money in the long term. Some SMEs reduce their energy bills by generating and using their own electricity, but also benefit from these as a passive revenue stream. That’s because any excess electricity can be sold back to an energy company using what is known as a Power Purchase Agreement (PPA) or an Export Tariff.
There are also plenty of small, sustainable steps you can take that, over time, end up going a long way. For example, turning the office heating down by 1°C you can reduce your annual heating bill by up to 8%. For a business that spends £500 a month on energy, that small turn of the dial would save them £480 each year – almost one month’s energy.
Changing perspective from sustainability as a cost, towards sustainability as a cost saver, will be essential in getting businesses on board.
‘It’s not a big enough issue for my customers’
The future of the planet is everyone’s business. Yet almost a fifth of SMEs say that sustainability is not a big enough issue for them or their customers.
While some of the effects of climate change may still feel abstract, the truth is that sustainability is one trend you can’t ignore.
From a commercial perspective, overlooking consumer trends could leave you at a competitive disadvantage. Research published by the insights company Kantar has found that more than three quarters (77%) of Brits have switched, avoided or boycotted grocery brands because of their environmental policies.
More importantly, businesses need to recognise the environmental impact their operations. Last year, the business sector accounted for 18% of total carbon emissions in the UK, making it one of the biggest emitters along with energy production and transportation.
People are choosing to shop locally and more ethically than ever before, which means that SMEs are becoming even more influential. Now is the chance for small businesses to make an even greater difference by emphasising the importance of the climate emergency and the UK’s 2050 net zero strategy. The spotlight is firmly on the SME, and it’s the bold and brave leaders who will lead the way.
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