Many small firms are keen to adopt environment friendly measures but are put off by the cost, a leading business group has claimed.
As a result, the government needs to do more to encourage green business policies, the Federation of Small Businesses (FSB) has said.
The FSB report, entitled Small Businesses and the Low Carbon Economy, pointed out that the UK is expected to cut its carbon emissions by 20 per cent within the next ten years.
However, many smaller firms are deterred from playing their part by the upfront costs of going green.
The FSB recommended expanding a current green investment loan scheme and offering financial incentives to make buildings more environment friendly as two actions the government could take to improve the situation.
At the moment, small firms can access a zero per cent loan scheme for energy efficient equipment. The ‘pay as you save’ scheme enables businesses to save on costs without having to bear the full, front-loaded weight of the investment. The FSB believes the programme should be reformed and developed so that more firms can take advantage of it.
Almost a half of the UK’s carbon emissions are produced by buildings, making changes to premises an urgent priority, the FSB argued.
The problem is that many small firms (44 per cent) rent their properties, often for periods of less than five years, so there is little incentive for tenants or landlords to introduce green building upgrades.
The report put forward a series of proposals that would encourage more to be done in this area. These include incentivising private sector providers (banks, energy or construction companies) to pay the upfront costs of major building energy efficiency upgrades.
The FSB also wants to see guaranteed ‘pay as you save’ repayments through energy bills. Linking the responsibility of repayment to the building would help overcome the landlord/tenant divide, the business group said.
And businesses that push up the rateable value of their buildings by ‘greening’ them should be rewarded by a waiving of the increased rate charges.
John Walker, the FSB’s national chairman, commented: “The need to cut carbon emissions and the predicted increase in the cost of energy over the coming decade means that the move to a low carbon economy is more of an economic imperative than ever.
“In order to achieve the tough targets set by the government, it must ensure that it makes economic sense for the UK’s 4.8 million small firms to go green. 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.
“If the correct policies are put in place now, then small businesses will have the potential to significantly reduce carbon emissions while also delivering the substantial economic growth that the UK economy desperately needs.”
Mike Childs, Friends of the Earth’s head of climate, added: “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.”