With environmental summit COP26 opening in Glasgow on 31 October, a group of financial services providers and small business leaders are lobbying the government to adopt proposals designed to reduce the carbon footprint of UK SMEs and make the nation a world leader in green finance.
Small and mid-sized companies are responsible for just under half of the UK’s carbon emissions from business and industry, yet just 20% of small businesses have committed to a Net Zero target, according to a British Standards Institution survey. This is in contrast to 50% of larger businesses.
Concern over additional and unnecessary cost is cited as the primary reason for the lack of activity. In the government’s Greening Finance: A Roadmap to Sustainable Investing, the Chancellor Rishi Sunak stated that “greening the financial system is an integral part of my plans for the future of the UK’s financial services” but to-date financial products that marry both commercial competitiveness and ESG-related benefits have not been offered to SMEs. Not addressing this could derail the government’s 2050 Net Zero target.
Led by business Finance marketplace Funding Options and alternative lender Swishfund, the open letter has been co-signed by some of the biggest names in fintech and the small business community, including Enterprise Nation, Capitalise, Fintech North, Inchorus as well as Greenr, an organization that enables businesses to baseline emissions, support offset projects and engage their employees to reduce emissions at source through their gamified mobile app and web dashboard, and Carbon Footprint Ltd, which for almost 20 years has guided private companies of all sizes and public sector organizations on tracking and reducing their environmental impact. The open letter calls for HM Treasury to open discussions with a view to announcing measures in the 2022 UK Budget, if not sooner.
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