A survey of South West businesses has found many have yet to be convinced about the economic benefits of going green and want financial support to achieve it.
The South West Business Council (SWBC) surveyed firms of varying sizes about the net zero agenda and how well prepared they are to hit Government targets by 2030.
But it found that while many businesses said their customers are concerned about climate change, a significant number, particularly the smaller enterprises, had done little to tackle the issue.
And they were mainly concerned about the cost, and felt that Government loans and other bank credit will need to be forthcoming.
TIm Jones, SWBC chairman, said. “We have been undertaking survey work to assess levels of understanding within the business community and plans for tackling climate change.
“Included in this, we have also asked how well businesses understand their existing emissions. We received quite a good, detailed response, from businesses across the region.”
He said that most larger companies cited reputational considerations as the motivation for going green, but it was clear that reputation is of lesser importance to SMEs.
The survey found that more than 80% of SMEs have yet to put targets in place to reduce their emissions and said that surviving the pandemic has pushed the issue further down their agenda.
However, 25% of companies with more than 50 staff had an active delivery plan, but, overall, 65% of respondents did not see setting a target of net zero as a priority in the wake of the pandemic.
While 55% of respondents confirmed their customers were worried about climate change, only one in 10 were measuring their carbon footprint.
“Cost was considered to be the largest barrier to action,” Mr Jones said. “With 33% of companies referencing the high initial adoption costs and also difficulties experienced in obtaining or committing, finance for delivery programmes.”
He said a high percentage of the larger companies have active programmes and dedicated finance for green-related investments or mitigation to reduce their emissions.
But he stressed: “The vast majority of business owners and senior managers still need to be convinced of the economic case for going green and being sustainable.
“Most respondents felt that Government-backed loans on generous terms linked to sustainability targets, would be a way forward.
“The consensus view is that enormous funding commitments, and credit, will be needed to deliver the net zero agenda. Net zero effectively cannot be achieved without Government support and a strengthening of the alternative lending sector.”
The Government has introduced a Green Transition Loan, he said, but this is aimed principally at large companies. The scheme is partly delivered through UK Export Finance, the Government’s Export Credit Agency, and is designed to assist with new clean growth export opportunities.
“The hope is that this will be a catalyst for bank lending as part of a general move away from fossil fuels,” Mr Jones said. “To secure the funding, companies must have a credible transition plan that can be measured against annual targets. If the borrower cannot meet these, then the interest rate on their loan will be raised.”
