Keen To Go Green But Not To Go Into The Red

Small businesses are keen to go green but need financial support so they don't go into the red.

Expanding the current loan scheme for small businesses and providing incentives for firms to green their buildings are just two of the measures that Government must look at in order to achieve the UK's tough carbon emission reduction targets, according to a new report from the Federation of Small Businesses (FSB) today.

The UK is expected to reduce its carbon emissions by 20 per cent by 2020 and the report, 'Making sense of going green –small businesses and low carbon economy', looks at the many opportunities which will allow small businesses to play their part.

The FSB believes that to get small business owners to proactively embrace energy efficiency, the Government needs to make going green economically viable. While many small businesses understand the benefits of green investment, the upfront cost is a huge disincentive.

Currently, small firms can access a zero per cent loan scheme for energy efficient equipment which the FSB urges the Government to reform and expand. The scheme allows firms to 'pay as you save' so firms can realise a genuine cost saving through energy efficiency, without having to make an upfront cost.

With 47 per cent of the UK's carbon emissions from buildings there is an urgent need to engage with the private sector to tackle this problem. Furthermore, with 44 per cent of small businesses renting their business premises, many for less than five years, neither the landlord nor the business would see the benefit of making the building as environmentally friendly as possible. The FSB believes this can be done by:

• Incentivising private sector providers (banks, energy or construction companies) to pay the upfront costs of major building energy efficiency upgrades
• Guaranteeing 'pay as you save' repayments through energy bills - by linking the responsibility of repayment to the building would help overcome the landlord/tenant divide
• Supporting new business owners to green their buildings by encouraging firms in the worst G-rated buildings to take steps to move to an F-rating
• Not penalising those who increase their rateable value through greening their premises by waiving the increased business rates

Ken Moon, Chairman of the FSB's Wessex Region, said: " Small businesses have the potential to make a huge difference in reductions in carbon emissions but tough targets have been set so the government needs to make sure that it makes economic sense to carry out any initiatives and make changes. Therefore the correct policies need to be put into place now. Small businesses can play a huge part in the UK's fight against climate change and we urge the Government to harness this potential when it publishes its Energy Bill, expected later this Parliament."

Mike Childs, Friends of the Earth's Head of Climate, said: "As this report sets out, small businesses have much to gain from cutting their emissions - insulating offices and producing clean energy will save thousands on fuel bills, and there's going to be plenty of new job opportunities as loft-laggers, roofers and technicians are needed to improve the UK's woefully inefficient buildings.

"Increasing zero-interest loans and more ambitious incentives for green energy for businesses would make going green more financially rewarding, but businesses also need certainty about what will be expected of them in the years ahead – which means getting regulations and taxation right.

"The Government's immediate priority should be to set all areas Local Carbon Budgets, encouraging councils and businesses to work together to cut emissions, save energy and transform the places in which we live and work."