New research from The Willow Review finds that among SMEs benefitting from sustainability practices, two thirds (67%) of SMEs report reduced operational costs,  over half are attracting new customers  and a third are seeing improved customer loyalty.

In publishing its final report, The Willow Review is issuing a series of fourteen recommendations for Government, financial services, and the UK’s SME community, to accelerate these financial gains and encourage a ‘mass shift’ in SME sustainability adoption to boost business resilience and growth.

With SMEs accounting for 99% of British businesses and responsible for around half of all UK Business Carbon emissions, the UK’s 5.45 million small businesses have a vital role to play in driving green growth and reducing the nation’s impact on climate change.

Launched last November to demonstrate the financial benefits of SMEs going green, The Willow Review has also concluded that while many SMEs are already seeing the advantages of sustainability, barriers such as upfront costs, knowledge gaps, and financial support limitations continue to slow widespread adoption.

The Willow Review is calling for wide-ranging action to improve the landscape for SMEs to realise green growth opportunities across several areas: making sustainability simple and accessible, improving support across financial services and government, as well as improving the policy landscape and access to finance.

Making sustainability simple and accessible

The Willow Review’s final report found that while many small businesses want to act more sustainably, they struggle with complexity, mixed messaging, and a lack of time, funding or accessible support. Indeed, earlier research from Small Business Britain and BT found that over half (53%) of small business owners feel they lack the time or resource to take sustainability action. And according to The Willow Review’s data – which surveyed 425 small businesses on the benefits of sustainability – 72% also cited perceived cost of implementation or access to finance as key barriers.

Despite this, The Willow Review also found that for over half of SMEs benefiting financially from sustainability practices, cost savings was a motivation for these efforts. Out of this group over 65% now use sustainable materials, 60% introduced waste reduction measures, 57% reduced business travel and 45% partner with sustainable suppliers.  

To help more of the UK’s SMEs embrace sustainability and identify changes that will boost their growth, The Willow Review sets out a simple five-point sustainability plan for small businesses, with a focus on sustainable materials, waste reduction, logistics efficiency, renewable energy, and green supply chains. 

To further support SMEs on the sustainability journey the Review is also advocating for increased mentoring and peer-networking, such as facilitating SME Sustainability Networks.

Financing the future

The need for simplified access to finance was also called out, alongside support to show the commercial advantage of going green and business planning to clarify return on investment. In particular, it identified an opportunity to improve access and visibility of existing funding options, from both the public and private sectors.

The Review particularly recommends Government simplifies the application process for grants, enhances signposting and implements local sustainability champions to help guide businesses to funding options and support.

As engagement with sustainability for commercial opportunities grows, it argues that the opportunities and flexibility of ‘green finance’ must grow too, alongside innovation and exploration in these areas. This includes recommendations to adapt current Government-backed funding initiatives through the British Business Bank, such as extending ‘Start-Up Loans’ to encompass new ‘Green-Up Loans’ to support small businesses to make necessary transitions. Driving forward fiscal incentives for SME sustainability is also proposed,  including simplifying existing schemes and boosting awareness and accessibility.

The Willow Review also calls for the existing Government Growth Guarantee Scheme to be expanded to include Green Initiatives and enable and incentivise larger-scale SME sustainability investments.

Creating a landscape of success

The importance of a clear policy framework that supports SMEs to factor sustainability into business planning and the need for Government interventions to support SMEs is also highlighted. For example, with more than half of UK commercial properties being rented, offering incentives for landlords to upgrade SME premises could be one way for Government to help SMEs transition to green energy. Integrating sustainability into the core offering of the Government’s new Business Growth Service is another example.

A positive message

Finally, The Willow Review also recommends championing a more positive, solutions-focused message about sustainability, positioning the green transition as a profit-driving opportunity, not simply a cost to be managed. Existing resources, like the UK Business Climate Hub, should be amplified as part of this update.

Jointly chaired by the Minister for Small Business, Gareth Thomas, Nick Stace OBE, Global Head of Sustainability Engagement for Barclays, and Michelle Ovens CBE, Founder, Small Business Britain, The Willow Review has been supported by a steering board of industry experts. This includes representatives from the Department of Energy Security and Net Zero, British Chambers of Commerce (BCC), BT, Business Climate Hub, Federation of Small Businesses (FSB), Startup Discovery School and Planet Mark, as well as academics from the University of Glasgow.

Michelle Ovens CBE, Founder of Small Business Britain and Co-Chair of The Willow Review said: “The Willow Review’s report is about recognising that sustainability and commercial success can, and must, go hand in hand. Too often, sustainability has been presented as a moral obligation or regulatory hurdle, rather than an opportunity for growth and resilience. We must change the conversation. Through deep engagement with the small business community, we have uncovered powerful examples of businesses using sustainability to cut costs, reach new markets, and build stronger relationships with customers and employees alike. The small businesses that embrace this now will not only future-proof themselves, but also lead the way in shaping a more resilient and inclusive economy for the UK.”

Gareth Thomas, Minister for Small Businesses and Co-Chair of the Willow Review, said: “We are determined to give small businesses the support they need to play a leading role in kickstarting economic growth and making Britain a clean energy superpower.

“The Willow Review sets out a clear case for why this is important, showing that sustainability is not just an environmental goal, but a solid business strategy, leading to increased opportunities for growth.

“We look forward to engaging with the report’s recommendations and will publish a response in due course.” 

Nick Stace OBE, Global Head of Sustainability Engagement for Barclays, said: “The Willow Review is an incredible opportunity to support small businesses across the UK to realise the financial benefits of adopting sustainability practices. The growth agenda for the UK needs small businesses to flourish and this report provides recommendations to support that endeavour.”

Following this final report, The Willow Review will continue to work closely with government, financial services, and SMEs to ensure sustainability becomes embedded as a core driver of business growth. A key priority will be working with the Net Zero Council to bridge the gap between the commercial opportunities for SMEs and the wider global climate goals.

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