SMEs Can Improve Business Profits by Going Green – Part 2


There are currently many online comments and advisory reports designed to encourage UK SMEs into ‘Going Green’ – sustainably running their business.

We at HaesCooper are all for SMEs taking advantage of the tax incentives available when ‘Going Green’. In our ‘Part 1 Going Green blog post’, we dealt with the ‘green’ business tax savings related to electric vehicles, available to SMEs. In Part Two, we have summarised the business profits improvements that can be achieved by introducing green sustainable business policies.

Financial Support

Our Planet’s environmental health is becoming more and more prominent in the news – and businesses are increasingly under pressure to show how they are, or how they are becoming, sustainable.

Business lenders and investors like to see that their client’s and investment’s business models consider ever-increasing environmental and ethical requirements for sustainability.  

This means having strong business management controls which demonstrate a business’s ability to continue in an ever-changing marketplace. Environmental controls will lead lenders and investors to believe that in the medium to long run, their investment is in the safe hands of business owners that are more likely to perform financially better than a ‘head in the sand’ approach to the changing environment and political requirements hitting capitalism and SMEs in particular.

SME Environment Grants & Loans

As an SME, you should research and identified grants or so-called ‘soft loans’ which can support your business in the completion of projects which are related to the environment. Bespoke finance arrangements are also available to companies wishing to develop technologies that fit with sustainable environment objectives.

The Energy Efficiency Financing scheme is an example of a bespoke finance arrangement available for businesses looking to develop technologies that fit with sustainable environment objectives.

Marketing & Public Relations

You should always make sure you understand your customer’s needs. This should always be the focus of an SME’s marketing strategy – but this is even more important in the changing marketplace going forward.  

As customers become more environmentally aware, they may start to look for suppliers that fit with an environmentally-friendly ethos. Regularly asking your key customers about their concerns and including them in your sustainability plans will show that you are serious in your commitment to creating a sustainable and environmentally friendly business.

Another way to show what you are doing as a sustainable business is to include it in your advertising. Include third-party evidence such as kitemarks for independent endorsements, like energy efficiency labelling. In short, this can help your business build a reputation for being environmentally friendly and sustainable.

The above can help you maintain your future business income and may even increase such income as customers begin to accept that buying goods or services with environmental safeguards can come at a premium.

Many businesses, especially those in the public sector, look for evidence of a supplier’s environmental and sustainability controls when asking for tenders. Work with and make sure your suppliers share your environmentally friendly responsibilities in the goods/services they sell to you.

Minimising Environmental Harm

Look for ways to produce longer-lasting products, with minimal environmental harmful packaging and transportation, including by your suppliers. Advertise this sustainable business approach in your marketplace, and it can give you an edge over your competitors.

Involve your employees in your approach – encouraging them to come forward with new ideas and suggestions for change. This can help you develop a business plan which will help to achieve your sustainable business objectives.

SMEs Business Waste Management

Several small environmentally-friendly changes to the way you manage your business can add up. An example of small changes which can add up is the way you, your employees and your suppliers manage business waste.

For example:

  1. Sorting or segregation-the acronym TEEP is used meaning Technically, Environmentally and Economically Practicable. SMEs may not have the TEEP facilities or money to collect and separate all business waste but just a small step of having two waste containers, one for general waste and the other for dry mixed recycling.  Avoid contamination of the dry recyclable waste. If it is contaminated, then it goes with the general waste.
  2. Procurement – look to buy whenever and wherever possible, your supplies/materials that are signed as recyclable. Also, micromanage your supply needs, i.e. do not overbuy and end up with an enhanced waste problem-also this is just good business management as well as good for the environment.
  3. Returns – there will be supplies/materials/packaging that cannot be recycled. Check with the supplier as they may have a returns policy particularly for unused supplies.
  4. Waste disposal enterprises – make an effort to be sure that your business waste is being collected and disposed of by a reputable enterprise and that they have a waste carrier licence. This avoids your business waste ending up with a fly-tipper!
  5. Employee involvement – make sure your employees are aware of your business waste management policy and are educated in what is required from them. Also, encourage their participation in your environmentally friendly business plan so that they feel comfortable in putting forward their ideas as to positive changes to achieve your environmentally friendly and sustainable business plan.

It is reported that approximately 80% of UK businesses do not have a green policy and business waste recycling plan. Let’s try and make that 80% relate to the UK businesses that do recycle their business waste. This would be a great start to helping to save the Planet!

A Final Thought

Given the need for change in the political will in the UK, to set the rules to provide ‘green capitalism’, there becomes ‘another side of the coin’ to the proposed ‘green tax’ incentives. Specifically, how the Government will replace the ‘green’ tax reliefs and reduction in the overall tax taken by the UK Exchequer – particularly via the current easy to collect fuel tax!

Watch this space is the honest answer – as nobody really knows at present.

However, many revenue-enhancing tax reforms will be under consideration whether or not the UK leaves the EU. This is, in spite of the current political ‘vote for me, and I will cut taxes’. If you would like to learn more about anything discussed in this blog post, or about how we can support your business in ‘going green’ – contact us.

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