Q2 2022

4 | Q2 2022 New research1 from Aldermore has found that UK small and medium-sized enterprises (SMEs) invested an average of £61,250 on their own sustainability during the last 12 months. Investing in sustainability With the green agenda becoming more prominent across society, businesses have been increasingly willing to take action, with over half (53%) of SMEs investing in their own sustainability during the last 12 months1. This represents a significant shift from the research Aldermore conducted2 among SMEs in early 2021, which found that only 12% of businesses saw sustainability as a significant priority. The high-profile nature of events like COP-26 and the Government’s own green agenda has likely emphasised the importance of green transformation to SMEs. SMEs have employed a wide variety of strategies to become more sustainable. The leading approach has been recycling, with two thirds (65% - 3.3million) of UK SMEs investing in workplace recycling schemes. Meanwhile 55% (2.9 million) of UK SMEs have consciously reduced their business travel and half (50% - 2.5 million) have changed the materials they use to be more sustainable. The future is green The research reveals that businesses plan to increase their investment in sustainability in the next year, spending on average £78,392, an increase of 27% (£17,142) compared to the previous year. SMEs are willing to take more significant steps to tackle sustainability in the next year. One in five (21% - 1.1 million) SMEs are considering changing to an eco-friendly product or service. Furthermore, over one in ten (12% - 550,000) will invest in carbon offsetting. In terms of the barriers to embracing more sustainable practices, just over one in four (27%) SMEs think Covid and the broader economic climate are a limiting factor, whilst less than one in ten (7%) found access to finance was a barrier. Funding sustainability While 31% of UK SMEs plan to fund their investment in sustainability with business savings, the vast majority will turn to 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%). Many SMEs recognise the importance of having a lender who understands funding around sustainability, with nearly half (45%) wanting a partner with experience funding green projects. For mighty businesses Aldermore recently launched its ‘For mighty businesses’ campaign, profiling stories of its SME customers who are looking to grow and innovate their business in a rapidly changing world. A GREENER FUTURE FOR SMES