UK Finance report highlights SME challenges in net zero transition – The Intermediary

UK Finance has released a new report that explores the difficulties faced by SMEs as they navigate the transition to a net zero economy.

The study, incorporating interviews and quantitative data, shows that 48% of SMEs are concerned about rising costs and economic conditions affecting their business, with this concern increasing to 57% among those looking to reduce their climate impact.

The willingness among SMEs to take significant carbon-reducing actions has declined from 27% in 2021 to 19% in 2023, according to the report.

It also highlights a general reluctance among these businesses to take on additional external finance for sustainability improvements.

David Postings, chief executive of UK Finance, emphasised the challenges: “SMEs are a critical part of the transition to Net Zero.

“Alongside running their businesses in challenging economic conditions, they told us they often feel unable to prioritise action to decarbonise and are overwhelmed or confused by mounting expectations.”

The report offers ten recommendations to aid SMEs, including establishing a government-led taskforce, issuing ‘Help to Green’ vouchers, and relaunching the UK Business Climate Hub to provide clearer, more accessible information.

Dame Teresa Graham DBE, chair of the UK Finance SME Advisory Group, also commented on the findings: “The transition to Net Zero is one of the greatest challenges we all face. SME business owners are short of time and understandably find it hard to know what needs to be done to decarbonise and how to do it.”