Ten reasons a sustainability strategy can improve an SME’s business performance

It’s simple. Being sustainable drives better business.

1.Cost Reduction and Efficiency

Sustainable practices, such as energy-saving initiatives, waste reduction, and resource efficiency, directly lower operating costs. Energy-efficient equipment, waste reduction, and resource optimisation can also improve margins and profitability.

·     UK businesses saved £375 million on energy costs in 2022 by implementing energy efficiency measures, with many of these savings coming from SMEs​.

2.Increased Revenue from New Markets

Sustainability opens doors to new markets and customer segments. Sustainability is considered a major consumer shift, and it’s happening now. The growing number of eco-conscious consumers and businesses are more likely to choose suppliers with strong environmental credentials, which leads to increased sales opportunities.

·      67% of consumers in the UK are more likely to choose products from companies that are committed to reducing their carbon footprint​

3.Attracting Top Talent and Employee Retention

Employees are more motivated to work for companies that have a purpose beyond profit. A sustainability approach boosts employee morale, engagement, and retention, reducing recruitment costs and fostering a productive work environment.

·      76% of UK workers say they are more likely to stay with an employer that has strong sustainability practices, and 50% of job seekers consider a company’s sustainability commitment when choosing a job​

4.Improved Access to Finance

Banks and investors are increasingly focusing on Environmental, Social, and Governance (ESG) criteria when deciding where to invest. SMEs with a strong sustainability strategy are more likely to secure loans, grants, and investments, as they are seen as lower-risk and aligned with future trends.

·      UK green investment is on the rise, with 80% of investors now considering ESG factors in their decisions, offering more funding opportunities for sustainable SMEs

5.Compliance with Regulatory Requirements

The UK government is continuously tightening regulations around carbon emissions and sustainability practices. A proactive sustainability strategy ensures that an SME is ahead of the curve, avoiding fines, penalties, or the need for costly last-minute changes.

·      The UK Government has mandated that by 2035, all businesses, including SMEs, must meet Net Zero standards, putting sustainability at the forefront of compliance

6.Enhanced Brand and Customer Loyalty

A sustainability approach strengthens an SME’s brand reputation. Customers, especially millennials and Gen Z, are increasingly choosing businesses that align with their environmental values. A strong sustainability strategy fosters trust and long-term customer loyalty.

·      88% of UK consumers want brands to help them be more environmentally friendly, and businesses with sustainable practices are seeing a 20% increase in brand loyalty​

7. Operational Resilience and Risk Management

Sustainable businesses are often more resilient to external shocks, such as energy price volatility, supply chain disruptions, or climate-related risks. By minimising dependence on finite resources and adopting more resilient practices, SME reduce risk and are better prepared for unforeseen challenges.

·      UKSMEs that invested in sustainability were found to be 25% more resilient toto economic shocks, such as the COVID-19 pandemic and energy price fluctuations​

8.Increased Innovation and Differentiation

Sustainability drives innovation. SMEs that commit to sustainability are often forced to think creatively and develop new products, services, and processes. This positions them as industry leaders and gives them a competitive edge in the marketplace.

·      In the UK, 45% of SMEs adopting sustainable practices report new product or service innovations, giving them a clear competitive edge​

9.Higher Productivity and Efficiency

Adopting sustainable practices, such as reducing energy waste and optimising resource use, often leads to streamlined processes and improved productivity. With less wastage and more efficient operations, SMEs can deliver more with fewer resources.

·      UKSMEs that implemented sustainability strategies saw a 25-30% increase in operational efficiency due to reduced energy use and waste​

10.Improved Stakeholder Relationships

A well-implemented sustainability strategy improves relationships with key stakeholders, including suppliers, customers, employees, and the community. It builds trust and facilitates collaboration with other businesses and organisations, enhancing overall business performance.

·      84% of UK SME leaders said that implementing sustainability practices improved their relationships with stakeholders, including suppliers and clients, leading to better partnerships​

No matter what your current business is struggling with or succeeding with, we can find a core business driver that will increase or improve your performance in that area by implementing a sustainable approach. It’s time to make a change.

Book a chat today.

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