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New research* released today by the Carbon Trust has revealed that lack of time and expertise to measure and reduce their carbon emissions is preventing the UK’s small and medium businesses from grabbing their share of the £3 billion worth of achievable business energy savings. In response, the Carbon Trust is launching an Energy Efficiency Loans campaign that urges businesses to take action now and apply for an interest free loan to replace or upgrade existing equipment to more energy-efficient versions.
This year the Carbon Trust has committed nearly £27 million to its Energy Efficiency Loans scheme, almost double the amount available last year, to help SMEs reduce carbon emissions and cut costs. In 2006/07 alone, £18 million was offered through the scheme to help small businesses realise annual savings of almost £7 million and 50,000 tonnes of carbon dioxide.
According to the Carbon Trust’s research, while 63 per cent of SME senior managers/ directors surveyed realised they could reduce their carbon emissions through low and no cost energy saving measures, more than two thirds (69 per cent) said their business had made no investment to reduce carbon emissions. Almost all (93 per cent) respondents said their company did not measure carbon emissions - citing lack of expertise as the key barrier.
Michael Rea, Carbon Trust Chief Operating Officer said:
“This new research highlights the increasing awareness among SMEs of both the need to take action on climate change and the bottom line opportunities available through making low cost changes to their business.
“SMEs account for around 20 per cent of the country’s overall emissions so it is essential they are supported to act on climate change. We are significantly increasing our interest free loans pool to help more businesses invest in new energy efficient equipment, save money and cut their carbon footprint. We have also launched a range of new online tools designed with SMEs in mind, to help them reduce their carbon emissions and cut costs.”
John Holbrow, Environment & Energy Policy Chairman, Federation of Small Business commented:
"The findings from the Carbon Trust research mirror the FSB’s own research into these issues and we would agree that lack of resources and awareness remains a barrier to small businesses exploring ways to mitigate rising energy costs. They know they have to do something but are unclear about the next steps. The smallest of businesses (less than 10 employees) will benefit from an intensive publicity campaign to make them aware of the loan facility."
Miles Templeman, Director General of the Institute of Directors commented:
"Better energy efficiency is the key objective for all business. Small enterprises often find it hard to navigate their way through the often conflicting advice on practical measures to take. A targeted scheme like this one could prove helpful to many."
David Frost, Director General British Chamber of Commerce commented:
“The BCC has long campaigned for more assistance to small firms and today’s announcement from the Carbon Trust is a step in the right direction. As the Carbon Trust study recognizes, given the right support SMEs can play a big part in reducing carbon emissions, alongside making significant cost savings. It’s disappointing then that so many are missing out. The offer of interest-free loans will help, and we look forward to seeing more practical action to support SMEs in becoming more energy efficient.”
Other research findings revealed:
• A significant proportion of SMEs underestimate savings from greater energy efficiency - nearly a quarter (23 per cent) believe their business can only save between 1 per cent and 4 per cent on energy bills, when the average figure is double that at 10 per cent
• Competition and adaptation cited as key reasons to change - of those businesses that did measure their emissions , one in three (37 per cent) said it was to gain a competitive edge and almost the same (32 per cent) said they wanted to adapt now before legislation and compliance required them to
• SMEs have a bigger role to play than they might think - more than a third (38 per cent) of SMEs believe their business is only responsible for under 10 per cent of UK emissions, when in reality they are responsible for around 20 per cent of the country’s overall carbon emissions
Over the past three years the Carbon Trust has provided around £90 million of support for SMEs to fund a range of services including interest free loans, site surveys, research grants, events, online tools and bespoke information. Of the 5,000 on-site energy surveys conducted last year, two thirds were for SMEs and 70 per cent of the business-related calls taken by the Carbon Trust’s dedicated advice line were from SMEs.
Energy Efficiency Loans are a cost effective way for businesses to replace or upgrade existing equipment with a more energy-efficient version. SMEs in England and Scotland, or all businesses in Wales that have been trading for at least 12 months, could borrow from £5,000 to £100,000. Businesses based in Northern Ireland that have been trading for at least 12 months may be eligible to apply for an unsecured interest free loan of up to £400,000.
More information on the Carbon Trust’s Energy Efficiency interest free loans can be found at www.carbontrust.co.uk/loans
A range of online tools for SMEs to measure and reduce their emissions can be found at www.carbontrust.co.uk/SME
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