UK Small Businesses Drive Change in the Sustainability of Supply Chains

New research from Novuna Business Finance shows that UK small businesses are driving ahead with a green agenda and many have already taken steps to be the catalyst for change in the broader supply chain.

Applying best practice into the supply chain

The research revealed that more than 8 in 10 small business leaders (82%) now treat sustainability as a priority in the supply chain, driving change with those enterprises they deal with as suppliers or customers.

  • 26% of small businesses were particularly interested in the sustainability of materials and said they were moving away from buying non-recyclable or single-use materials with climate negative production processes.
  • 22% of respondents now expect businesses they deal with to follow similar standards on carbon neutrality.
  • 17% of businesses now assess the green credentials of firms before they decide to business with them. In addition, 15% of respondents said they now insist that their suppliers improve their carbon standards in order to continue doing business with them.
  • In addition to setting their own standards for their supply chain, a number of small businesses have had to react to the demands of others. Almost one in five enterprises (18%) acknowledged they had changed their own practices to meet the environmental demands of their customers and suppliers.

Separately, the research found that more than a quarter of businesses (28%) felt frustrated that there were not clearer guidelines from the Government on how supply chains can be greener. This rose to 36% in the manufacturing sector, and 40% a transport and distribution.

Small businesses driving the agenda of green action within their enterprise

Sustainability matters more to small businesses than it did a year ago – with 89% saying carbon reduction is important to them. This year, small businesses have been setting out to review energy usage,  considering renewable alternatives (26%), looking to have a positive social impact on their immediate community (22%), and switching to greener forms of transport (20%). In addition, many enterprises have actively contributed to local green initiatives – such as litter picking and community green energy projects (18%).

As a result of these activities, 13% of small businesses already claim to be Net Zero, 31% have a Net Zero plan and target they are working to – and 45% are taking positive steps even though they don’t yet have a formal carbon reduction plan in place.

Views from small businesses about their broader community’s approach to sustainability

  • There are too many businesses that don’t seem to be taking carbon emissions seriously 24%
  • Businesses tend to do their own thing rather than work together 23%
  • There is not enough happening in my community to reduce carbon emissions 22%
  • It’s not clear whether there are initiatives within the community that all businesses can support 21%
  • It is not made a big enough priority by business clubs and networks 17%
  • I know of businesses in my community that are prospering because they have gone green 16%
  • Our business supports community projects that help the environment 16%
  • Our business supports educational and green matters at local schools 15%
  • Not applicable – Carbon emissions do not seem to be a priority in the community 13%

Joanna Morris, Head of Insight at Novuna Business Finance commented: “It is evident that small businesses are implementing change in their businesses and also insisting on change within their supply chain – whether it be assessing sustainability goals before agreeing to collaborate, or urging those who are current partners to improve their own practices. There is always a focus on the role big businesses can play in driving forward the climate change agenda – but our own data suggests the valiant efforts of smaller enterprises should not be overlooked. Many of them are acting as true change agents in the broader supply chain and their influence may well prove to be far greater than their relative size.”

Additional data

Ways small businesses are approaching carbon neutrality within their supply chain

  • We are particularly interested in the sustainability of materials and are moving away from buying non recyclables/single use/materials with climate negative production processes 26%
  • I expect business I deal with now to follow similar standards to us on carbon neutrality 22%
  • We have had to change our practices to meet the environmental demands of our customers and suppliers 18%
  • We assess the green credentials of firms before we decide to business with them 17%
  • We have insisted that our suppliers improve their carbon standards in order to continue doing business with us 15%
  • Not applicable – Carbon emissions are not treated as a priority in our supply chain 18%