Three Reasons Why It Can Pay To Go Green For Yorkshire’s SMEs

Steve Harris, regional director for Yorkshire at Lloyds Bank discusses why it can pay to go green for SMES.

Strong green credentials are no longer a ‘nice to have’ for SMEs. Consumer interest in sustainability has never been higher – 81% of respondents in a recent poll by Essity stated that environmental issues had become significantly more important to them during lockdown. And it’s no different for businesses – research by Lloyds Bank revealed that 91% of UK SMEs see sustainability as an important consideration, with almost half (45%) stating that the pandemic had made them think more carefully about its role in their business operations.

But critically, more than ever there is a clear business case for embracing sustainability. In fact, secretary of state for BEIS Kwasi Kwarteng last year stated that UK businesses could save as much as £6billion by lowering their energy use by 20% by 2030. Here are three reasons why Yorkshire businesses will benefit from going green.

1. People will pay more for green products and services

The ‘green pound’ is more valuable than ever, with a new generation of eco-conscious consumers willing to spend more on products and services with clear, strong sustainability credentials.

A study by Accenture showed that more than half of consumers would pay a premium for reusable or recyclable items, creating a strong business case for investment in this area.

A good place to start is reviewing any manufacturing processes, assessing whether any of your products can be made more environmentally friendly.

Similarly, think about your processes and practices – how can you reduce emissions at each stage of a product’s lifecycle? A great example of an innovative solution to this challenge is HebTroCo, the Halifax-based menswear manufacturer, which purchased two new Bullitt cargo bikes with a £7,600 finance package from Lloyds Bank Commercial Banking. Able to carry up to 70 pairs of trousers at a time, the team uses the bikes to ferry orders from the firm’s stockroom to the local post office, helping to slash emissions and keep down transport costs.

To truly maximise the competitive advantage of going green, businesses need to ensure they’re promoting their sustainability credentials clearly. Highlighting green initiatives on social channels, adding details to product packaging and having a dedicated sustainability section on your website are all ways to raise awareness with businesses and consumers alike.

2. It can boost productivity

It’s not just consumers that are attracted to businesses with green credentials. Most job hunters will actively seek out – and then stay with – the firms with the best sustainable practices. This means that in the long-term, there are significant productivity gains on offer for businesses that take steps to go green.

Operating sustainably – particularly through creating a green working environment – is proven to boost employee wellbeing. Research conducted by Harvard University showed that staff working in green-certified buildings had higher average cognitive function and benefitted from higher-quality sleep, making them more productive throughout the day. It also helps to minimise the challenge of absenteeism.

Here, small changes can go a long way. Simple steps like setting up a dedicated green space, maximising natural light and going paperless can have a big impact, and will be good for business in the long-term. And some measures, such as improving insulation or introducing LED lighting, can significantly drive down energy bills, with renewable technologies like solar panels paying for themselves in just a few years.

3. It can help you access finance

Companies with green credentials are increasingly attractive to investors, and in some cases there can be financial incentives for businesses looking to make green improvements. It’s here that schemes such as our Clean Growth Finance Initiative (CGFI) come into play, which offers discounted lending to firms embarking on sustainability projects to help make their green ambitions a reality. Businesses can access the support they need to grow, minimising their impact on the environment as they do so.

The funding can be used to support projects of any shape or size. One example is Company Shop, which used a £4.2m CGFI loan to kickstart a major expansion drive and create more than 200 jobs. The business, which buys and sells surplus stock from manufacturers to drive down waste, is now increasing its network of stores across the North of England, helping to prevent millions of products ending up in landfill every year.

It’s increasingly clear that going green isn’t just good for the planet, it’s also smart business. At this critical moment in the UK’s recovery from the impact of Covid-19, placing sustainability at the heart of business decisions, embracing more efficient ways of operating and helping consumers make greener choices will be key to maintaining competitiveness and driving growth. We’re committed to remaining by the side of business as they navigate the road ahead