Q1. According to the Small Business Finance Market report, £137 million was invested in net zero related deals in the West Midlands between 2018 and the third quarter of 2022, accounting for 4% of national deals. What do you believe this tells us about the regional economy and the wider national stance on green investments?
Given the size of the West Midlands in terms of both population (4.7 million) and contribution to the United Kingdom economy (£117 billion), this region, with a long pedigree in manufacturing, has a tradition of being at the forefront of innovation and creativity.
Receiving 4% of national deals for investment, though very welcome, should be viewed in the context of the emerging challenge reducing carbon emissions represents.
Reducing emissions is essential to avert the irreversible damage to the planet which are already being felt in weather patterns and which will cause food shortages and the need for massive relocation by many millions of people affected by rising sea levels. Investment in net zero is no longer optional. Like improvement in human relations and efficiency in processes, every organisation must invest in green energy which will radically reduce harmful emissions.
Moreover, as the last twelve months have so clearly demonstrated as a consequence of Russia’s invasion of Ukraine, the costs of production for all businesses have increased dramatically. This has meant overall costs have risen which have either had to be passed on to customers – which potentially reduces competitiveness – or absorbed which can wipe out profit/surplus.
The imperative, therefore, is that more needs to be done in terms of investing in ways to reduce dependence of fossil fuel.
Q2. Do you believe now is a good time for businesses to invest in net-zero, if so – why?
Analysts Deloitte believe that unless climate is effectively dealt with, the cost the global economy over the next 50 years could be a colossal US$178 trillion (£156.64 trillion) reducing global GDP by 7.6%. Therefore, there’s a phenomenally powerful business case for businesses and organisations to invest in ways to massively reduce harmful emissions which occur as a result of processes.
Indeed, as part of a quest which will contribute to saving the planet from the existential threat of climate change, it’s highly probable that creative solutions and innovative ideas will emerge which will make operations more logical and efficient.
As every business organisation will stress, the need to reduce energy, which has increased at an eyewatering rate in the last twelve months, has become vital to ensure survival. Having created a culture based on crisis, this attitude should be continued as part of the objective of ensuring net zero.
Q3. What can businesses do to explore their venture into net-zero?
In the 1970s, following the spike in energy which was caused by the ‘oil shock’ everyone recogonised the importance of switching lights off when not needed and turning the heating down by a few degrees to save money.
Every business can reconsider the way in which all day-to-day processes are carried out. What’s absolutely important is that every person who is directly involved in carrying out such processes should be intimately engaged in identifying ways to reduce energy use and cut down on waste. This was the key lesson of the quality/excellence movement which revolutionised business and organisation in this country in the 1980s to deal with the threat from Japan and the Far East.
Crisis, though always unwelcome is a great catalyst to change. Net zero must become a clarion call for innovation and collective thinking to develop new ways of working. A wonderful by-product is likely to be the fostering of better teamworking.
Q4. 46% of West Midlands smaller businesses prioritising environmental sustainability, stated access to external finance as one of their main barriers, with 61% stating the current economic climate as their main obstacle. What can businesses do to overcome these challenges?
There’s little doubt that small businesses, in which there’s frequently little or no slack in resources or funds, will face a tremendous challenge in investing in in environmental improvement.
However, it’s important to remember that’ like any investment, there’s a very serious risk of losing competitiveness by not considering how your goods or service are produced.
More critically, there is a perception problem of being seen as not being as engaged in sustainability as others. Clearly, it must be stressed, seeking additional funds should be regarded as an essential prerequisite to future success.
Therefore, allocating funding to develop improvement which is explicitly dedicated to securing business opportunity which will ensure employment and, perhaps, create new jobs. Given the government’s stated intentions, it’s worth exploring the potential for grants and loans which may be available to invest in reduction of waste and improving environmental sustainability. At the heart of every business’s strategy should be the maxim that we can’t afford to be left behind in playing our part in the quest to improve the environment.
Interested in exploring how your business can invest in its sustainability? Find out how the Ecrofit programme can help business to make better use of its data.