FSB development manager says small businesses need financial aid to help pay for climate change measures

Business Focus by David Richardson

Investment pledges measured in trillions, target timescales measured in decades, tens of thousands of delegates, a hundred thousand protesters… Why? Because at Glasgow’s COP26, the world’s leaders have been debating the survival of our planet.

Translating their high-level, aspirational rhetoric into actions that we can and must take as individuals is understandably difficult – which perhaps explains why a new FSB report finds that, while three-quarters of Scotland’s small businesses have already taken steps to become more sustainable, only a third have emission-reducing plans in place.

There’s a lot of work to do and obvious barriers to be overcome. Top of the list, ticked by nearly three in 10 small firms, is a lack of capital. Our latest small business confidence index reports that over three-quarters of Scotland’s businesses face rising running costs (staffing, utilities and so on), and their confidence has been shaken. They are in no position to rush out and spend even more money that they don’t have on environmental measures or productivity enhancements.

So how are small businesses in Caithness and Sutherland going to recover from the Covid crisis in a sustainable manner?

Well, reducing running costs to free up the financial headroom they need is key, and the most effective boost for small businesses would be direct help with these costs. Three in five Scottish businesses say a grant or low-interest loan would encourage them to make changes, and FSB is arguing for a new Help to Green voucher scheme, paying grants of up to £5000 to be invested in energy efficiency.

Additionally, the British Business Bank says 22 per cent of small businesses are ready to access external finance to support their net-zero activities, so it’s vital that suitable products are available.

On another matter, too many small tenants say that their landlords won’t work with them to improve their premises’ energy efficiency. But above all, we need leadership and teamwork. We expect our governments – local, Holyrood and Westminster – to take the bold action required, but they will only succeed if they take the small businesses with them.

David Richardson is the Federation of Small Businesses' Highlands and Islands development manager.

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