A new survey by digital payments provider TakePayments has found that in 2023 UK businesses are being held back by financial challenges which is preventing them from prioritising sustainability.
The survey of over 1,000 UK-based SMEs was carried out to understand how businesses are approaching sustainability in 2023 — and what more could be done to make it easier for UK employers to become greener moving forward.
Findings revealed that “environmental and sustainability challenges” were considered the second-biggest obstacle for businesses in 2023, with the first being “financial challenges”
The survey’s findings suggest that businesses are now less willing, and in some cases less able, to take action on sustainability and net zero. For example, less than a third of businesses (31%) said they were passionate about becoming more sustainable, this is down from 39% in 2022.
Part of the reason companies are placing less emphasis on sustainability is the belief that consumers care less about brands’ green policies than they did last year. Only a quarter (25%) now believe that their clients and customers care about what the company is doing for the environment, significantly down from 37% in 2022. The results also correlate with those released in the EY Future Consumer Index earlier this year, which also found that UK consumers were turning away from sustainable products due to cost of living pressures.
Furthermore, implementation costs were found to be by far the biggest barrier preventing businesses from becoming more environmentally friendly, with nearly half (43%) of employers reporting it was preventing their efforts. This is a significant jump since 2022 when only a third (34%) of businesses cited costs as a major barrier.
“The data here underscores the need for an approach that aligns the interests of consumers—who are navigating their own economic pressures—with those of businesses struggling to implement environmentally friendly practices within constrained budgets,” said Jodie Wilkinson, head of strategic partnerships at TakePayments. “To achieve lasting change, the government should continue investing in substantial financial incentives and policy frameworks that support the transition to sustainability.”
The UK government claims that there is currently more than £5 billion in funding available to help businesses become greener. Despite this, more than a quarter of businesses (27%) still feel the government needs to offer more financial incentives for companies, while a third (33%) said that a lack of funding was one of the key barriers preventing them from making changes to reduce their environmental impact.
Sustainability in action
Despite sustainability falling down the priority list for many employers, UK businesses are still taking action to reduce their carbon footprint. The most common measure that businesses have taken is to reduce business waste – 37% of the business owners surveyed said they were actively trying to reduce their waste, more than double the amount in 2022. In addition to that, more than 1 in 6 businesses (18%) said they were changing their packaging to reduce the amount of non-recyclable waste they produce.
Businesses are also changing where they source their materials in a bid to help the environment. The number of businesses using locally or sustainably sourced materials is up from last year, with 29% improving their buying practices to become more climate conscious. Additionally, 1 in 5 businesses plan to go cashless or paper-free in the next 12 months.
This survey echoes similar results from similar surveys, including that from SME Climate Hub, which also found that a significant number of businesses need more financial help to take action or accelerate emission reduction plans with some claiming they would need up to $100,000 (£82,000) of public and private investment to reach net zero.
The survey shows a clear need from businesses for greater governmental support, but comes off the back of the announcement made by Prime Minister Rishi Sunak to delay a number of sustainable strategies, including the ban on petrol and diesel vehicles, along with the boiler replacement scheme.
The delays announced by Mr. Sunak are being interpreted by some as a weakening of the UK’s prioritisation of climate change, and have not left businesses feeling like the support they need is on its way any time soon. Many businesses will now have to weigh up whether becoming greener is a realistic possibility given the financial climate and fiscal challenges they continue to face.
You can read the full report here.
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