Scots firms 'lagging behind UK in tackling climate change'

Leaders of Scottish small businesses are less likely to prioritise tackling climate change than in other parts of the UK, but should seriously consider adopting a “win-win” greener strategy to help accelerate the push towards net zero, according to a new report.

Nine in ten company bosses in Scotland said the environment is more important to them now than a year ago, according to Novuna Business Finance’s Small Business Sustainability Report 2023, an annual study looking at the attitudes among small businesses towards sustainability, and the action they are taking themselves and within their supply chains.

However, it also found that while 11 per cent of firms north of the Border said they were already a net zero business, 47 per cent reported not having a formal plan in place to date (versus the 42 per cent UK average), with a further 13 per cent saying becoming a sustainable business was not important to them (compared to the one in ten UK figure).

Novuna – which provides business asset finance to firms of a range of sizes across the UK – also found that bosses in Scotland said they were nearly twice as likely to say curbing carbon emissions was not a priority concern for their organisation compared to the UK-wide average (at 23 per cent and 14 per cent respectively). That comes amid Scotland targeting net zero by 2045 and the UK 2050.

Novuna's report comes after Luke Jerram's huge floating Earth installation, Gaia, was displayed in London earlier this year, shining a light on environmental issues. Picture: Daniel Leal/AFP via Getty Images.

Scottish business leaders were among the most likely to say other challenges had pushed tackling climate change down the list of priorities, with nearly six in ten reporting grappling with the cost of living crisis (vs the 47 per cent UK average), for example. Geoff Maleham, MD of Novuna Business Finance, said: “Many small business owners have struggled to maintain a focus on net zero whilst grappling with the economic ravages of Covid and then a seismic cost-of-living crisis. There are also issues when it comes to information and guidance which urgently need to be tackled.”

Frustrations

Novuna, a unit of global financial giant Mitsubishi HC Capital Inc, added that the research also found that businesses in Scotland were among the most likely to have frustrations with climate change inactivity within their sector and broader community. Chief among the concerns was leaders feeling that there were too many businesses that don't seem to be taking carbon emissions seriously (27 per cent vs 24 per cent for the UK as a whole).

Mr Maleham added that the importance of small business leaders getting on board with the UK’s move to net zero “cannot be understated”, given that such firms are the “engine room of the economy”.

He added: “Whilst Scottish businesses are slightly behind with sustainability plans, the data shows there is still a strong desire from business leaders to address the pressing issues of climate change. As the abundance of green alternatives for businesses increases, and with costs gradually decreasing as a result, the option for small businesses to go green becomes very real. Even with the cost of living crisis, we are quickly reaching the point where the green option is also the affordable one, which will be a win-win for everyone.”

Last month, Novuna said small businesses in Scotland were among the least likely to predict growth of any region in the UK.