SMEs need support to meet costs of climate change

Date: 23/08/2007

Published by: Companexus Admin

British Chambers of Commerce has warned that the government?s carbon reduction ambitions will go unmet without a serious programme of support for small business.

Responding to the Joint Committee Report into the Climate Change Bill, the British Chambers of Commerce today warns that carbon reduction ambitions will go unmet without a serious programme of support for small business. Accounting for over 50% of business energy use, small and medium sized enterprises (SMEs) offer the prospect of significantly contributing to carbon reduction targets, but lack information on energy efficiency measures, and support in meeting the costs of making them.

BCC Head of Policy Natalie Evans said:

Small business is acutely aware of energy efficiency priorities, and many firms are already taking significant steps. But to make their most effective contribution they need a stable legislative environment and a coherent set of support measures. We?re pleased then that the Joint Committee is supportive of five-yearly budgets, giving business the flexibility to meet targets over a reasonable period of time.

We are particularly encouraged that the committee has highlighted issues around the membership of the new Committee on Climate Change. Environmental issues impact on the whole of society and it is important that the committee reflects this. It is essential that business has significant representation on this body, and a say in any further legislation.

However we note the lack of any statement for assistance of SMEs, who account for the majority of the business community. As it stands the Climate Change Bill lacks clarity over the legal enforceability of climate change reduction targets, making it unclear exactly what is expected of business. Much of the information and support available has so far been difficult for small businesses to access, as they lack the time and resources of larger companies. We call on the Government to refocus the work of environment agencies, ensuring that the needs of small businesses are not forgotten, and that their potential contribution is not lost through a disproportionate focus on big business.

The BCC energy efficiency survey last year showed that while small businesses are more than willing to contribute to energy efficiency, the agencies intended to support them are offering little help.

84% of SMEs surveyed consider themselves energy efficient or considering options to conserve energy use.
Over 60% of survey respondents believe that current government initiatives at promoting energy efficiency have been unsatisfactory, and nearly a third had no knowledge of organisations set up to advise companies on conserving energy. Of those that were aware, 30 separate companies were mentioned, highlighting concerns that messages from government are muddled and confused.
Many businesses feel the organisations that have been set up to assist companies on energy reduction measures simply do not cater for SMEs or fail to understand the constraints of a small business, such as limited time and resources.
The BCC makes a number of recommendations which would aid SMEs in tackling climate change:

Work in partnership with business - Government agencies, devolved administrations and other stakeholders should work in partnership with the business community top achieve climate change goals.

Refocus initiatives towards SMEs - Government supported organisations such as the Carbon Trust should be refocused to better deal with SMEs, taking into account their limited time and resources

Create better incentives to assist business - Better targeted incentives would encourage small businesses to adopt energy efficient strategies. Where incentives do exist such as the Enhanced Capital Allowance (ECA), better communication is required to ensure businesses take up the incentives.

Climate change as an opportunity - Tackling climate change is a necessity but it can also be an opportunity. Government should create a programme of support and incentives to encourage entrepreneurial innovation in the climate change market.