More than one million small businesses are planning to access finance to help reduce their carbon emissions, according to research by the British Business Bank (BBB).
Analysis by the state-backed bank found 11 per cent of the smaller business population – equating to around 700,000 businesses in the UK – have accessed external finance in the form of loans or equity to support net zero actions.
Another 22 per cent, equivalent to around 1.3m businesses, said they are prepared to access external finance to support net zero actions in the next five years.
The BBB estimates that small- and medium-sized enterprises (SMEs) account for almost a third of all current UK greenhouse gas emissions and around half of total emissions from UK businesses.
But its research showed a lack of preparation for a net-zero economy among SMEs.
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Just three per cent of smaller businesses surveyed said they have measured their carbon footprint in the past five years and subsequently set an emissions reduction target.
Three quarters are yet to implement decarbonisation strategies and 35 per cent of smaller businesses said cost was a barrier for reducing carbon emissions
The BBB suggested finance could be an enabler to the net-zero transition.
“Smaller businesses will generally have lower individual carbon footprints than their larger counterparts, but by broadening their vision and committing to action they can collectively produce a significant overall impact,” Catherine Lewis La Torre, chief executive of the BBB, said.
“Action to mitigate the impacts of climate change is at tipping point, and it is crucial for smaller business owners to feel empowered, informed and supported in making the relevant steps to decarbonising their business if the UK is going to meet its wider net zero objectives by 2050.”