Small and medium sized businesses need financial help to hit tough UK carbon emission reduction targets, a new report suggests.
The report by the Federation of Small Businesses (FSB) calls for the government to provide financial loans and incentives to small companies to support them in reaching carbon reduction targets.
The FSB notes that while many small businesses understand and welcome the benefits of green investment, the upfront cost is a huge disincentive.
The UK is expected to reduce carbon emissions by 20% in 2020 and the report looks at how small businesses can help tackle the problem.
John Walker, national chairman of the FSB said: "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.”
He added "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."
With 47% of the UK’s carbon emissions coming from buildings the FSB believes there is an urgent need to encourage the private sector to take action. However, at present there is little incentive for small businesses as 44% rent their business premises for less than five years so would not see the benefit of making the building more environmentally friendly.
Mike Childs, Friends of the Earth’s head of climate said: "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.”
Proposals by the FSB include incentivising private sector providers to pay the upfront costs of energy efficiency upgrades, guaranteeing ‘pay as you save’ repayments through energy bills and supporting new owners to make their buildings greener.
The report also discovered that if all UK businesses undertook effective energy measures that £3.6bn could be saved amounting to 29 metric tons of Co2 reduction in carbon emissions.