According to new research from Lloyds Bank Commercial Banking 71 per cent of SMEs said they did not understand the commercial benefits of being environmentally responsible and are therefore putting their “competitiveness and reputation” at risk.
Only a quarter of SMEs said green issues were a top priority for the business this year with one in five accepting that they are not doing enough to take on environmentally responsible practices.
Amongst those SMEs that aren’t taking steps to become more environmentally responsible just over half, 58 percent, said they have never thought about the need to do so. Almost one third of firms do not believe there are any risks in failing to adopt environmentally responsible practices.
“The importance of environmental responsibility can often be overlooked and our research shows that many businesses do not understand the benefits, but it is an issue that has become increasingly important, not least to customers,” said Adrian White, managing director of SME Banking at Lloyds Banking Group.
“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.”
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Lloyds said eight out of ten businesses which have implemented sustainable business practices believe there are clear benefits in doing so.
Over two fifths believe it helps reduce their costs with 35 per cent stating their customers responded positively because of it. Other benefits included making them a more attractive employer and improving profitability.
Lloyds research came as it launched an online planning tool allowing firms to “build their own action plans in which they can set goals” to make better use of resources, or to find new opportunities for cost savings.
It said businesses can also use the planning tool’s range of templates and guidance notes to write their own environmental policy, which they can then use to prove their green credentials to customers, stakeholders, or in supply chain negotiations.
White added: “Some businesses might see environmental responsibility as costly or irrelevant but with our new online planning tool we hope to help firms overcome these perceptions.
“It will help businesses look at the gaps they need to address and the practical steps they need to take. In our 2015 SME Charter we have pledged to help 10,000 SMEs to engage in more environmentally responsible practices by 2020 and we hope that through our new sustainability portal we will succeed in reaching this goal.”
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