The study polled over 1,000 small business leaders in the past 12 months and inquired about which areas of sustainability had become more important to their businesses compared to a year ago. The most significant changes over the last year are in the following five key areas: working with an ethical supply chain, increasing community activism, enhancing energy efficiency, and improving packaging and waste management. Across the board, small businesses are intensifying their efforts.

The biggest green strides

• Green Supply Chain Takes Centre Stage: Green businesses are increasingly prioritising ethical considerations over cost when it comes to their supply chain. Compared to 12 months ago, businesses are now placing greater importance on sourcing from and participating in an ethical supply chain (26% vs 14%). For those with net-zero plans in place, it was the top priority at 30%.
• Giving something back: Company success now extends beyond profit to include social impact. The research shows that small businesses are placing greater emphasis on the positive impact their business can make in the community (31% 2023 vs 22% 2022), creating local jobs (27% vs 18%) and contributing to green initiatives (25% vs 18%). There is also an emphasis on monitoring reducing the harmful impact businesses could have on the community (24%).
• Energising efforts: In line with the Government recent announcement of a new sustainability hub to support and help SMEs save on their energy bills, small businesses are turning energy price hikes into an opportunity for greater efficiency and renewable use (32% vs 26% in 2022). This is especially true for businesses with net-zero plans (35%) and those in the North East (43%).
• Less Waste: With businesses now liable under the Extended Producer Responsibility scheme for the cost of dealing with packaging waste, there has been a significant increase in the number of businesses prioritising ways of improving packaging and waste policies (27% vs 19%).

Biggest sustainability priorities for small businesses in the last 12 months

National drive towards zero emission targets:

Around the UK there is a concerted effort towards driving sustainability, with each region prioritising different initiatives.

• Businesses in the North East are concentrating on the green and cost benefits of reviewing current energy costs and exploring ways to be more energy-efficient (43%).
• In Wales, the Northwest, and the West Midlands, businesses are focusing on the positive local impact they can make: 36% of businesses in the Northwest aim to make a positive impact on the community in which they work, businesses in Wales are focussing on  developing local green initiatives (32%), and businesses in the West Midlands will be focussing their efforts on invest in local suppliers (31%).
• Focusing on creating jobs and investing in their workforce is also key for businesses across the UK. Businesses in West Midlands are more likely to be focusing on bettering employee working conditions (33%), while businesses in the West Midlands, Scotland, and the East are committed to creating more local job opportunities (32%).

Joanna Morris, Head of Marketing and Insight at Novuna Business Finance commented: “Most businesses would probably concede that it has been a really difficult year, with new challenges seemingly at every turn. However, the research suggests that, despite this, businesses are still making the time to focus on playing their part in the climate challenge. A certain amount of grit and determination is certainly evident and is also testament to the high importance and urgency that small businesses are placing on their efforts to be green and build a sustainable business.

At Novuna Business Finance, we work in partnership with small businesses to help them achieve their goals. This research is invaluable in helping us better understand how businesses are prioritising the green efforts, focussing perhaps on initiatives that will have the biggest impact in the short term, with an eye on the ultimate goal of achieving the net zero target for the longer term.”