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Survey: Two-thirds of British SMEs not confident on net-zero pathway

Only one-third of decision makers at UK-based small businesses say they are extremely confident about how to reach net-zero emissions.

That is a headline finding from BSI’s new net-zero barometer, which polled 1,000 senior decision-makers at small and medium-sized businesses (SMEs).

Awareness of the importance of transitioning to net-zero, the barometer survey found, is at al all-time high. 82% of those polled said it was important to set and achieve net-zero targets – triple the proportion who agreed in 2020. But the survey revealed an awareness-action gap.

BSI found that many SMEs have already tackled low-hanging fruit, such as reducing waste (44%) or fitting energy-efficient lighting (38%). Only 17% of those polled said they have not made any key changes to become more sustainable.

But the survey found that half of SMEs do not yet have a net-zero plan or policy. Moreover, only one-fifth of SMEs are measuring and reporting progress to cut emissions in a standard way. These findings suggest that many businesses are yet to embed the net-zero transition into their strategic planning, despite increasing pressure to do so from customers and investors.

BSI found that the biggest challenge preventing SMEs from developing and delivering a credible pathway to net-zero is the fact that they need to dedicate resources to respond to the cost-of-living crisis and energy price crisis.

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Facing these challenges – and other perceived barriers such as a lack of Government support and a desire not to be seen as greenwashing – only one-third of the SMEs polled would describe themselves as extremely confident in reaching net-zero.

“At a time where the attention of many SME leaders is being diverted by economic pressures, they want help to navigate a path that is both credible and realistic,” said BSI’s director-general of standards, Scott Steedman.

“SMEs want to understand both where they are on this journey, and what that transition means for them and their stakeholders. They can benefit from having a clear roadmap to how they’re going to achieve net zero, not only in their own operations, but also in their supply chains. Our research shows that with the right guidance – including the use of standards – SMEs are more than able to rise to this moment.”

Earlier this year, the SME Climate Hub posted similar findings from its own study of 350 businesses. That study found that seven in ten firms need more available funds to transition to net-zero, with most citing increased difficulty securing funds in the current economic climate.

By Sarah George


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Festive cheer: SMEs to reward employees with 120 million extra days off

Small and medium-sized businesses are set to reward their employees with 120 million extra days off as the cost-of-living crisis bites.

More than half a million UK small and medium-sized enterprises (SMEs) are spreading festive cheer among their workforces by giving the gift of time, according to the latest quarterly SME barometer from Barclays. One in ten SMEs said they would be gifting each employee 2.5 extra days leave, on average, meaning that workers across the country will receive 120,345,602 days off cumulatively, the bank said.

People working in the hospitality and leisure, and manufacturing sectors will get even more time off, with 3.5 days and three days of additional holidays, respectively. The Barclays research found that 41 per cent of SME employers believe staff activities leading up to the festive season contribute to employee retention. Similarly, nearly a third (30 per cent) of Scottish employees say they are less likely to look for another job if their employer organises activities to reward staff over the festive period.

Of employers who are seeing an increase in demand for benefits from new employees, more annual leave is one of the top three benefits being requested by existing employees. In addition to providing time off, about two fifths (44 per cent) of SMEs will be hosting end-of-year parties, spending an average of £56 per head on festivities, while 41 per cent will be closing offices between Christmas and New Year and 25 per cent will be awarding Christmas bonuses.

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According to the latest barometer, more than half (55 per cent) of UK SMEs reported their total revenue grew – with turnover up around 9.1 per cent year-on-year, on average. Some 51 per cent of UK SMEs reported turnover growth in the third quarter of 2022 compared with the second quarter, consistent with data from Barclaycard Payments, which showed a modest increase of 5.2 per cent in the value and 4.4 per cent in the volume of payments made to Scottish SMEs between July and September this year.

Festive cheer and optimism are, however, dampened by the cost-of-living crunch as nearly half (47 per cent) of UK businesses are worried about their prospects heading into the new year. Some 68 per cent of firms are concerned about the negative impact that rising energy bills will have on their business, with 26 per cent feeling very concerned. Larger businesses are feeling the pinch too, with nearly two-thirds (59 per cent) predicting a decrease in consumer spending and 41 per cent worrying about their businesses prospects as they approach 2023.

Colin O’Flaherty, head of SME at Barclaycard Payments, said: “The upcoming festive period will be our first since the pandemic without restrictions, with employers and employees looking to make the most of it. While it’s been yet another challenging year for businesses, many SMEs are looking to inject some festive cheer by rewarding their employees, as business owners are aware of the positive impact that employee morale can have on staff retention. Our research shows that although owners are very aware of the difficulties to come, they remain resilient in the face of rising costs.”

By Scott Reid

Source: The Scotsman

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UK lending figures point to cooling economy, market turmoil

LONDON (Reuters) – Lending to British consumers rose last month by less than expected and the number of mortgages approved by British lenders eased back, according to Bank of England data on Monday that point to tougher times ahead for Britain’s economy.

The BoE said net unsecured consumer credit rose by 745 million pounds ($861 million) in September, the smallest monthly increase since December 2021, following a 1.215 billion pound increase in August. A Reuters poll of economists had pointed to net lending of just under 1 billion pounds.

Mortgage approvals totalled 66,789 last month, down from 74,422 in August, the BoE said, broadly in line the forecast in a Reuters poll.

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“September’s money and credit figures point to further signs that consumers have been become more cautious in response to the weakening economic outlook,” said Ashley Webb, UK economist at consultancy Capital Economics.

The BoE figures showed a huge jump in the money supply, which on the M4 measure rose by 2.1% in September alone.

The last time there was a bigger increase was in March 2020, when financial market turmoil early in the COVID-19 pandemic led to a squeeze on money market funds which had to sell assets such as government bonds and Treasury bills for cash.

September’s jump likely reflected a fire-sale of pension fund assets to meet collateral calls in the wake of the ill-fated Sept. 23 economic growth plan, from the government of former Prime Minister Liz Truss.

The sub-category of M4 which covers companies like pension funds and life assurance firms jumped by a record 67.8 billion pounds in September, more than double the previous record.

Source: UK Investing

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92% of SME leaders call on government to do more about inflation

As costs and inflation rise to record levels, small and medium-sized businesses across the UK are urgently calling for Britain’s new Prime Minister, Liz Truss, and her cabinet to provide them with more support.

A poll of 250 British SME leaders reveals an incredible 92% think the Government must do more to support small and medium sized businesses during this period of unprecedented difficulty.

The survey, commissioned by technology provider, Babble, identified the five biggest issues keeping SME leaders awake at night:

  1. Rising inflation costs impacting profit margins (58%)
  2. Retaining customers and clients (46%)
  3. Winning new business (39%)
  4. Impacts of Brexit on importing and exporting (24%)
  5. Providing exceptional customer service (22%)

SME leaders in the North West are particularly concerned with inflation pressures, with three-quarters (75%) of respondents from the region listing it among their biggest worries. Meanwhile, two thirds (65%) of business leaders in the East Midlands are losing sleep over retaining customers and clients, as SMEs struggle to compete. Delivering good customer service when the business is stretched is a particular concern for leaders in the north too, with 31% in the North West and 30% in the North East citing it as one of their biggest worries.

Following the last few years of pandemic-induced chaos, the healthcare industry (73%) is understandably one of the sectors most concerned about the impact of inflation, alongside arts and culture (78%). Investing in new technologies is another key concern for the sector, with a third (33%) of healthcare SME leaders saying so.

The impact of Brexit is still weighing heavily on small businesses too – manufacturing (50%), architecture and engineering (37%), healthcare (33%) and retail (24%) leaders each had it among their top four concerns, with worries around the effect on imports and exports.

Calls for cost-cutting support
When asked what support they’d like to see the Government provide to British SMEs, respondents overwhelmingly voted in favour of measures tackling rising costs. Over two thirds (67%) would like a cap on business energy bills, similar to household energy bills, whilst almost half (44%) want to see work done to reduce rapidly rising insurance premiums, especially on mandatory personal indemnity insurance policies. Other methods of support SME business leaders would like to see include:

• Corporation tax remaining at 19% regardless of business size (35%)
• Reintroduction of the furlough scheme through the initial recession period (27%)
• Reintroduction of the Brexit Support Fund for SMEs who are exporting to Europe (22%)
• Faster rollout of Building Digital scheme so all businesses have fast broadband (20%)

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Tech investment key to navigating trouble
With support so far unforthcoming, British SMEs are having to consider which areas they should invest in to successfully navigate this period. Over half (57%) plan to invest in new technologies to stay ahead of competition, though a quarter (23%) said they would have to scale back on spending plans. When asked, business decision makers are most likely to invest in:

• Software to improve customer experience (48%)
• Cloud technology to improve hybrid and remote working (38%)
• Increased protection from cyber attacks (31%)
• Initiatives to keep staff morale high (29%)
• Software to manage HR and recruitment processes (20%)

Commenting on the findings, Babble’s CEO, Matt Parker, says “SMEs are the backbone of the UK’s economy. But instead of being able to dream big, they are being kept awake at night worrying about how they’re going to navigate the next twelve months and it is clear they are going to need more support to do this. Whether it’s reducing costs long-term, ensuring greater customer service, stronger defences against cyber-attacks or promoting greater collaboration between teams, cloud technology provides the answer.

“At Babble, we’re passionate about working with SME leaders to find the solutions to these issues and seeing small businesses thrive. As the country enters a new era of leadership, we’re determined to see SMEs up and down the country get the support they need and make the right investments to allow them to dream big for the future of their business.”

Babble is committed to powering business up and down the country, aiming to provide a local service to its customers, with the all the benefits of a national provider. The company supports over 10,000 organisations across a range of sectors and has over 250 staff located nationwide.

This makes Babble a natural partner for Ride Across Britain, an annual 980-mile bike ride from Land’s End to John O’Groats. As lead sponsor, Babble is demonstrating its support for clients across the UK, reflected in the cross-country route, as well as fundraising over £500,000 for charities, The Prince’s Trust and The Buffalo Foundation.

By Serena Haththotuwa

Source: Business Leader