SMEs delay 'greening plans' amid economic uncertainty – study

Businesses are more concerned about soaring costs associated with the day-to-day operations

SMEs delay 'greening plans' amid economic uncertainty – study

Hundreds of small and medium enterprises (SMEs) have put on hold plans to implement energy-saving measures in their workplaces due to the struggling UK economy, a new study has revealed.

A survey by specialist lender Together shows that two thirds (67%) of SMEs have delayed their ‘greening plans’ amid the current economic uncertainty.

One in five, or 20%, have postponed installing solar panels, while 18% have put on ice plans to upgrade lighting to longer-lasting LEDs. A further 17% have shelved installing or replacing heating, ventilation, and air conditioning with more efficient equipment, 14% have delayed replacing windows, and another 14% have put on hold installing internal or external wall or roof insulation.

Meanwhile, only 16% have carried out plans to put in place energy saving measures, and another 16% said they had no plans to invest.

Together said that the study also suggests SMEs are more concerned about soaring costs associated with the day-to-day running of their business with fuel (37%), price inflation – the cost of raw materials, labour, and transportation (34%) – and access to finance for expansion (18%).

The survey results have been published at a time that the UK government is working towards its pledge to reduce the nation’s greenhouse gas emissions to net zero by 2050. According to a study by the British Business Bank, smaller companies are responsible for about half of all greenhouse gas emissions in the UK.

From April next year, commercial buildings must have an energy performance certificate (EPC) rating of at least Grade ‘E’ to be let to tenants, and there is a longer-term target for all commercial buildings to be rated a minimum of Grade ‘B’ by 2030.

Economists have predicted that the UK economy will remain weak until 2024. Latest GDP data from the Office for National Statistics has revealed that the economy grew in November, though businesses said they are still struggling with increasing costs.

“What’s clear from our research is that SMEs are feeling the harsh effects of the current economic climate, and this is forcing them to make tough choices when it comes to taking necessary steps towards reducing carbon emissions,” Sean Williams, head of professional sector at Together, said.

“There are about 5.6 million SMEs in the UK – 99.9% of the country’s business population – so improving energy consumption in this sector is crucial if we’re going to meet the government’s targets, with UK business a key driver for change.”

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