Almost a fifth of small businesses are risking their financial success and reputation by not doing enough to ensure they are being environmentally responsible, according to new research from Lloyds Bank Commercial Banking.
The research revealed that 19 per cent of small businesses are aware of the fact that they are not doing enough to change their practices to more environmentally minded ways. However, exactly a quarter of the businesses said they will emphasise green issues and make them a top three priority for 2015.
The study, collated by Gusto Research, pointed out the benefits – financial and reputational – of adopting environmentally sound practices and the risks a business runs if it does not do so.
Over 80 per cent of SMEs believe that adoption of sustainable practices brings with it very clear benefits. Nearly half (46 per cent) believe such practices reduce costs; 18 per cent believe it improves their profitability.
However, profit margins were not the only reason cited. Interestingly, many businesses took in to consideration the opinion of the customers and prospective employees. Over a third (35 per cent) believed running an environmentally conscious business makes customers respond more positively to it. Over a quarter (27 per cent) of SMEs believe it makes them a more appealing employer.
These statistics are reflected when asked about the risks of not being environmentally responsible. 45 per cent were worried they would be falling foul of legislation. The same percentage was concerned it would make them appear antiquated. Over a third (31 per cent) took into account potential customer backlash for disregarding their environmental responsibilities.
“Being environmentally responsible can help reduce business risks and can also bring lasting benefits – from lower costs and a wider customer base to better staff morale and retention,” said Adrian White, managing director of SME Banking, Lloyds Banking Group.