Although the vast majority of small and medium enterprise (SME) founders recognise the importance of sustainability, when it comes to implementing their own green strategy, many find reasons not to do so. Whether it’s the perceived cost, or feeling like their business is too small to make a real difference, taking steps towards net zero can feel overwhelming.
The truth is, taking your first steps towards sustainability is much easier than you probably think. Don’t believe us? Well, here are five common sustainable business myths, busted.
Myth #1: Going green is too expensive
One of the biggest misconceptions among small businesses about going green is the assumed cost. Making business operations more sustainable, which could involve having to change products and services, will inevitably incur some costs, but these will be vastly outweighed by savings and opportunities to earn and win new business – a critical factor for all SMEs.
Paolo Taticchi, professor of strategy and sustainability at the UCL School of Management, explains: “It is true that there are costs involved, but as with every business activity, what is important is how those costs are categorised and considered in terms of the value they deliver. For example, in many cases, being able to prove credible sustainability practices opens up new commercial opportunities for SMEs, thereby turning the cost in this area into an investment.”
Significant cost savings can be made by adopting lower-carbon measures and alternatives. Simply switching traditional halogen bulbs to bright LED bulbs could save £2-£3 a year for every bulb, according to the Energy Saving Trust. Other easy energy-saving tactics include turning off unused equipment and lights, minimising heat loss, and monitoring energy consumption levels more effectively via a smart meter.
There are also financial incentives for small businesses to adopt a sustainability strategy, particularly with regards to securing investment. Taticchi adds: “Some banks today offer capital at a lower cost for SMEs that can demonstrate a strong ESG performance.”
Myth #2: There is a lack of support for small businesses to start their journey to net zero
A survey by BT in conjunction with Small Business Britain found that although 99% of small firms recognise the importance of sustainability, three-quarters (77%) don’t know how to measure their carbon emissions and need support.
If you feel lost, the good news is that there are plenty of resources and free online tools to help you get started.
A good place to start is the British Business Bank Finance Hub. With everything from a Green Decoder, which helps you cut through the jargon, to a library of articles and Net Zero Hero case studies, the sustainability hub aims to help small businesses take that first eco step.
Another great option is Small Business Britain, which partners with big businesses to help SMEs build their confidence in monitoring and measuring net zero progress by delivering training, workshops and skills both in person and online.
Myth #3: Going green is just for big companies
Many SMEs believe they are too small to make an impact, but when it comes to saving our planet, every business counts. The UK’s 6m small businesses make up 99% of its total number of enterprises, employ 60% of the UK workforce and generate £2.2tn of revenue to the economy – so the more small businesses that commit to the journey of reducing their carbon footprint, the bigger the overall impact will be.
“It’s imperative that we all understand that net zero requires organisations and their supply chains to collaborate to get to net zero,” says Steve Malkin, CEO of SME sustainability business certification and advisory company Planet Mark. “Given that most companies in most supply chains are SMEs, it’s critical for the UK and global economy to support SMEs in embracing their sustainability and support them in their own net zero journeys,” he says. “It is within SMEs and entrepreneurs that we will find the climate solutions we’re looking for to deliver our transformation to a sustainable society.”
Myth #4: People don’t really care about business sustainability
The idea that people aren’t interested in a company’s green credentials could not be further from the truth. Small businesses are coming under increasing pressure from customers, employees and suppliers to become more sustainable, with evidence growing to show that consumers are favouring brands and products that use sustainable practices. In fact, just over half (52%) of consumers take a brand’s eco-credentials into consideration when choosing products, and a fifth (21%) have stopped buying from brands because of environmental impact, according to a survey by Hearts & Science. By responding to customer preferences for buying from sustainable brands, businesses can gain an edge over competitors who are yet to adopt green business strategies.
Myth #5: Making claims about sustainability might mean we’ll be accused of greenwashing
Greenwashing is when a company pretends to be more environmentally responsible than it really is, by either making up claims or exaggerating the truth. But while there have been some high-profile examples of greenwashing, contrary to some cynical beliefs, authentic sustainability initiatives are anything but a marketing stunt.
As ratings quality and reporting requirements continue to evolve, a company’s sustainable development – and the evidence supporting its progress toward sustainability goals – will come under increasing scrutiny from regulators, investors, and customers. And with the Advertising Standards Authority taking a stronger stance against those making false green claims, greenwashing shouldn’t deter SMEs from taking their first steps towards launching and communicating their own sustainability agenda and goals.
If you’d like help to green – and grow – your business, the British Business Bank should be your first port of call. Dedicated to making finance markets work better for smaller businesses, it provides free financial tools and expert information to get you moving in the right direction. Find out more at british-business-bank.co.uk/finance-hub/sustainability