Green is the new black and green finance, or sustainable finance, aims to connect SMEs with the funding they need to achieve their net zero ambitions.
According to the Department for Business, Energy & Industrial Strategy (BEIS), business and industry accounts for 25% of all UK territorial emissions, with just under half of these attributable to SMEs - The SME community therefore has a vital role to play in the collective journey to net zero.
Sustainable Funding: 101
Green finance is gaining momentum driven by global climate change pressures and recognition of the critical role which sustainability will play in our future. Sustainable finance can support those businesses looking to reduce their carbon footprint by investing in green technologies, purchasing low carbon assets and adapting their operational models.
From minor adjustments in daily operations to large-scale investments in renewable energy infrastructure, change matters and to help facilitate this change, an increasing number of commercial lenders are offering incentivised funding products to support sustainable initiatives.
For eligible investments, incentives can include discounted finance rates and/or removal of arrangement fees (subject to credit) across a range of products including term loans, asset finance and revolving-credit facilities.
It might also be that alongside funding, you're looking to work with lenders who share your values and ideas around future sustainability. At KeySME, we can help align your needs with a partner who demonstrates sustainable practices and a clear commitment to carbon neutrality.
What might constitute an eligible investment?
The spectrum is broad but covers any tangible initiative or project that will contribute to a reduction in carbon emissions, improve energy efficiency or reduce waste. Some typical examples include investment in:
Low carbon vehicles including EV's and hybrids
Green technologies such as solar panels, wind power and biomass boilers
Water efficiency improvements
Waste reduction and/or improvement in recycling rates
Energy efficient LED lighting
Whilst green finance might improve your bottom line, it can also help put meaningful change within reach and send a clear signal to your customers and suppliers that you're investing in a more sustainable future for your business.
How can I find out more?
Whether you have a dedicated ESG strategy, ambitions to achieve net zero or would just like to learn more about sustainable finance, get in touch with the team at KeySME to discuss how this type of funding can support your carbon reduction goals.
In addition, why not check out the UK Business Climate Hub and review the SME Climate Commitment, where SME leaders future-proof their business by committing to halve greenhouse gas emissions before 2030 and reach net-zero emissions before 2050.
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