Two million UK businesses believe reducing their own carbon emissions ‘will not make a significant difference’ to climate change

  • Start Up Loans research finds 67% of micro-businesses have never sought information on how to reduce their carbon footprint
  • Online resources available from the British Business Bank to help founders understand how to make their business more sustainable

LONDON, 29 July 2022: Start Up Loans, part of the British Business Bank, today publishes research that reveals millions of micro-businessowners do not believe they can have a positive impact on the UK’s targets for a net-zero economy.

The UK has an estimated 5.3 million* micro-businesses, which is defined as any business with between 0-9 employees, including many thousands of start-ups. The research found half of business owners would value information that would help them assess whether reducing their carbon footprint would make financial sense for their business.

The survey of micro-business owners found:

  • 40% (2.1 million) don’t believe reducing their own emissions will make a difference
  • 50% (2.7 million) find the language, terminology and information around sustainability inaccessible, 78% don’t fully understand the term net-zero and 72% don’t fully understand the term carbon neutral
  • 67% (3.5 million) have never sought information on how to reduce their carbon footprint and 46% (2.4 million) don’t know where to go for information
  • 50% (2.65 million) would value information to help them assess whether reducing carbon impact would make financial sense for their business

The British Business Bank’s #GreenToGrow campaign aims to demystify and alert smaller businesses to the commercial benefits of investing in decarbonisation. This includes a host of free online resources include the ‘Green Decoder’, an online guide co-created with Nottingham Business School, Nottingham Trent University to help smaller businesses decipher the terminology surrounding decarbonisation.

Consumers want greener businesses

Other research suggests that it makes economic sense for micro-businesses to consider reducing their carbon footprint. A separate independent survey published by Hearts & Science found, for example, that half (52%) of consumers now take a brand’s eco-credentials into consideration when choosing products, and one in five (21%) have made the decision to stop buying from brands because of their environmental impact.

Below, Start Up Loans recipients and micro-business owners discuss the challenges they face in their efforts to implement and highlight their green credentials:

Jeroo Doodhmal, Founder of Pip and Henry, a sustainable children’s shoe company, said:

“Our mission is to help children take their first steps into the world more mindfully. While we create sustainable products, we do have an international supply chain which results in a greater carbon footprint than if we were entirely UK-based. Because a lot of our sustainable materials such as pineapple leaves and coconut fibres are sourced abroad, that’s likely to be an ongoing challenge.”

“There is a lot of energy and ambition among small business owners to make their operations sustainable and net-zero, but I think it’s fair to say that in practice it’s more complicated to implement both at the same time without consistent support and access to the right information.”

Ben Caspary, Founder of Booheads, a manufacturer of bamboo electric toothbrush heads, said:

“I created Booheads in November 2020 to bring sustainably sourced, biodegradable bamboo toothbrush heads to customers seeking an alternative to the disposable plastic versions that end up in landfills. Creating sustainable products and growing a sustainable business are very different things, but the key to achieving both is applying a thoughtful, long-term view to your decision making.

“Supply chain and production costs are make or break for small businesses, and the associated carbon footprint is often beyond an owners control. As an e-commerce business I can’t control whether our courier partners use fleets of low carbon or electric vehicles, for example. Needless to say if they did then that would be welcomed, but what matters to me managing the growth of Booheads is that our customers receive orders on time and at a cost that keeps us on an upward trajectory.”

Kate Barnard, Founder of Enjoy the Air, which provides data on air quality said:

“I founded Enjoy The Air in the height of the pandemic, December 2020, to primarily address outside air quality as it links to 10 of the 17 UN’s Sustainable Development Goals. We support cities by providing data and analytics, specifically in the areas of air quality and mobility.”

“When you’re starting a business for the first time you’re learning everything at once. You need guidance to make the right long-term decisions and to choose the options that enable you to grow ever greener. The first step we need to take as a business community is accepting that for as long as people are presented with bad options and inconsistent guidance, we can’t hold them solely accountable for their decisions.”

Richard Bearman, Managing Director of Start-Up Loans, said: “The UK’s start up and micro-business community has enormous potential to contribute towards our national net-zero agenda and it’s clear that there is a job to be done in helping many to understand how important they are to that crucial process. This is especially true amid a backdrop of continued economic turbulence and rising operational costs, which is putting unprecedented pressure on smaller businesses.

“However, it’s more important than ever for consumers to see the companies they buy from taking positive steps towards the climate crisis, even if they’re not able to be completely carbon neutral. That’s why we launched our #GreenToGrow campaign earlier in 2022; to provide a platform via which any business can access helpful, de-jargoned information that explains the terminology around net-zero, as well as how to take steps to convey to their customers that they are taking positive action.

ENDS

 

About Start Up Loans

The Start-Up Loans Company, part of the British Business Bank, was formed in June 2012. The Start Up Loans programme provides personal loans for business purposes of up to £25,000 at a 6% fixed interest rate per annum and offers free dedicated mentoring for 12 months and support to each borrower.

The primary aim of the Start Up Loans programme is to ensure that viable start-ups and early-stage businesses have access to the finance and support they need in order to thrive. A network of Delivery Partner organisations support applicants in all regions and industries throughout the UK. The Start Up Loans programme is not designed to generate a commercial profit. Capital payments together with the interest are recycled to help meet start-ups’ increasing demand for finance.

Free guides on a range of subjects related to starting a business are available on the Start Up Loans website: https://www.startuploans.co.uk/free-start-up-guides/ You can find recent media coverage and press releases in the Start Up Loans Media Centre here: https://www.startuploans.co.uk/media-centre/.

The funding for the Start Up Loans programme is provided by the Department for Business, Energy and Industrial Strategy (BEIS). The Start-Up Loans Company is a subsidiary of the British Business Bank plc. The bank is a development bank wholly owned by HM Government which is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such.

The British Business Bank makes finance markets for smaller businesses work better, enabling the sector to prosper, grow and build economic activity.

Start Up Loans – impact

  • Since 2012, the Start Up Loans programme has delivered more than 94,000 loans, providing over £870m of funding.
  • In the financial year 2021/22, the programme provided 12,433 loans with a total value of approximately £152m.
  • Since 2012, 30% of loans went to people formerly unemployed or economically inactive in the 18-24 age category. 40% were women and 20% of our loan recipients were from ethnic minority groups, excluding white minorities.
  • The economic benefits of the Start Up Loans programme are almost six (5.7) times its economic costs.
  • At Spending Review 2021, the Chancellor announced resources to provide 33,000 Start Up Loans over next three years.

For more information about Start Up Loans, please visit: https://www.startuploans.co.uk/

 

Methodology

Fieldwork was undertaken by Opinium. All figures, unless otherwise stated, are from Opinium. Total sample size was 1000 small-to-medium UK senior decision makers. Fieldwork was undertaken between 1st – 11th February 2022. The survey was carried out online. The figures are representative of all UK adults (aged 18+).

*Number conversions based on number of UK micro-businesses being 5.3 million, taken data from House of Commons Library published 21 December 2021: https://researchbriefings.files.parliament.uk/documents/SN06152/SN06152.pdf