If your business wants to make sustainability upgrades such as generating green energy, find out about the financial support you could access. The information in this article is provided by Good Energy’s funding partner, Finpoint.
What is sustainable finance?
Sustainable finance means considering environmental, social and governance objectives when investing in your business. ESG activities that you could require external financial support with include measures to significantly reduce your carbon emissions. These include meeting some of your energy demand by installing renewable energy generation technology, or adding infrastructure to support electric vehicle usage.
Why is investing in sustainability important?
From multinational banks to pension providers, financial organisations are increasingly moving away from investments in activities that contribute to the climate crisis. For example, in October 2022 Lloyds Bank announced that it would no longer support direct financing for new oil or gas fields. While Scottish Widows’ recent Green Pension Report found that 72% of UK workers expect their employer to provide options to invest their retirement savings sustainably.
Many financial providers are turning their attention to the growth opportunities presented by the transition to a green economy. For example, research from Natwest highlights that investing in a net-zero future could generate £160 billion for the UK economy. The research also finds that small businesses can play a vital role in achieving carbon reduction targets, which could create up to 130,000 new jobs and 30,000 new businesses.
What opportunities are available to SMEs within the green economy?
There are a few different ways that SMEs stand to benefit from investing in sustainability. This may include new business activities in areas that are essential to reducing the UK’s carbon footprint, such as retrofitting and insulating draughty homes; installing renewable energy technology such as solar panels and heat pumps; and installing electric vehicle charge points.
But it isn’t just by offering these services to customers that businesses stand to gain. If your business is not directly part of the green economy, you can still unlock value by increasing the sustainability of your operations. For example, installing a commercial solar panel array won’t just reduce electricity bills and carbon emissions, it means you can sell electricity to an energy supplier.
How can SMEs access financial support with meeting their sustainability targets?
As discussed above, lenders are increasingly setting up initiatives to provide funding for climate action. However, more active support is needed to enable the UK’s small business community to reach it’s full potential in creating a zero carbon Britain.
Here are five recommendations from Natwest’s Springboard to Sustainable Recovery report:
- Access to funding: more financing options that reflect the benefit to society of delivering climate action, and make sure that business investments to achieve this make financial sense.
- Awareness and education: support to recognise the opportunities to arising from increased commitment to climate action. Help with understanding how to reduce carbon emissions, improve sustainability and measure impact.
- Upskilling: support to develop new skills to take part in the transition to a green economy, such as training employees, identifying skills gaps, understanding environmental certification schemes.
- Market access: more certainty about the financial benefits of climate action.
- Navigation: support to navigate a complex and evolving landscape, to understand what options are available.
Do you have a sustainable project that you want to finance?
Good Energy’s preferred funding supplier is Finpoint, an FCA-regulated intermediary that gives businesses greater transparency about the funding options available to them. Explore options from a range of lenders, all through one application. Good Energy customers can also benefit from 24/7 support and impartial financial advice.
Find out more and get your renewable energy project off the ground.