The UK’s drive towards decarbonisation has created a significant income stream for SMEs. Our latest in-depth research of the UK SME landscape has found that this revenue opportunity has increased by £15bn since 2021 and is now worth over £175bn. What’s more, capturing this revenue will require the creation of an estimated 40,000 new SMEs, which could generate 260,000 jobs to contribute to regional growth in the UK.

While environmental concerns remain important for SMEs, an increasingly challenging economic environment means that, in many cases, they have other competing priorities. SMEs have been facing tighter cash flows and uncertainty about their future. This is a consequence of the turbulent macroeconomic environment, including the cost of living crisis, rising energy prices and global supply-chain issues.

The updated Springboard to Sustainable Recovery report is a timely reminder that, if properly supported with upfront capital, SMEs transitioning to a low-carbon world may potentially see significant savings in energy costs. 

Not only that, but decarbonisation could make businesses more competitive and productive and, if applied across the whole economy, support growth. 

Alison Rose, Chief Executive Officer, NatWest Group said: “The imperative to tackle climate change – still the biggest single issue facing humanity – is more pressing than ever. But in the context of a turbulent macroeconomic environment, with the prospect of a recession in the UK, and the increase cost of living due to rising prices, SMEs face tighter case flows and fears for the future of their business.

Yet against this backdrop, we find that SMEs in the UK are well placed and pivotal to drive the next decade of decarbonisation in the UK, and to harness growing revenue opportunities. This creates opportunities for business of all shapes and sizes, and at NatWest we will do everything we can to help businesses access that opportunity.”

For SMEs, the business case for decarbonisation is more positive than ever. Our report highlights the key steps they can take: 

1. Insulating premises to make them more energy efficient
2. Installing a heat pump to combat rising gas prices
3. Switching fleets to electric vehicles (EVs)
4. Deploying low-carbon power, such as solar panels

The Springboard To Sustainable Recovery report also identifies ways in which businesses are creating value from delivering climate action today, and explores how financial institutions, government, industry bodies and large corporates will play their part in unblocking the barriers for SMEs.

Want to know more about funding, carbon footprints, decarbonisation opportunities, and where to find resources? Download the report.