Small firms need cash incentives to go green, says FSB

SMEs are struggling to reduce their emissions. But can the Government afford to help?

by
Last Updated: 31 Aug 2010

With the economy on a knife-edge, many firms have put green issues on the back-burner (so to speak). But no matter how much we’ve taken our eye off the ball, the UK's stretching carbon emissions targets remain - and the Federation of Small Business reckons that if the Government wants to meet them, it needs to start giving SMEs more incentives. Unsurprisingly, for many struggling businesses, reducing carbon emissions is well down their list of priorities – so the FSB thinks the Government needs to do something before it’s too late. All well and good - but with swingeing cuts in the offing, is that really going to happen?
 
At the moment, there are some measures in place to help businesses reduce their carbon emissions – an interest-free loan for energy efficient equipment from the Carbon Trust, for example – but the FSB says it’s not enough. With a target of cutting emissions by 20% by 2020 (see what they did there?), the FSB thinks the Government will have to go further. It’s easier said than done, though: 44% of small businesses are in rented premises, which gives them no incentive to do anything about, say, insulation. And landlords are equally unwilling to invest, because they won’t see any gain in their profits.
 
The FSB’s report, called ‘Making Sense of Going Green’, outlines ideas to get businesses enthused about carbon efficiency. These include incentives for the likes of banks, energy companies and construction companies to bear the up-front costs of ‘major building energy efficiency upgrades’ and providing financial encouragements for small businesses that move from the worst G-rated buildings to the slightly-less-heinous F-rated offices. The group also suggests that businesses which increase the value of their premises by making them greener are exempted from higher business rates.
 
In reality, though, it looks unlikely. With a spending review scheduled for October that promises to be tough, to say the least, there isn’t a lot of spare cash around for schemes like this. And unless something dramatic happens in the next few weeks, we can't see that changing. Yet without these cash incentives, it's going to be tough to convince businesses that this is a suitable focus for their attention at the moment...

In today's bulletin:
Inflation slips back toward 2% target
Unite calls off BAA strikes
General Motors to float, one year after bankruptcy
Small firms need cash incentives to go green, says FSB
Time to turf out boring meetings?

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