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How small businesses can meet sustainability strategy costs

Sustainability and social responsibility are key components of company strategy in today’s business world – it’s important to have policy in place. But this planning comes with a significant price tag. How can small businesses afford it? Alternative finance can help.

For large organisations, sustainability and social responsibility policies and programmes are now a standard part of corporate culture. Rules and initiatives are in place to help shape company and employee behaviour towards the environment and to manage the impact that they have on the communities with which they interact.

For example, initiatives can include those to ensure that office lights are turned off, tree-planting days, the provision of electric work vehicles, volunteering in the community and using only recyclable paper cups. These policies and programmes help companies operate in a more environmentally and socially conscious way, which is turn positively impacts their reputation and brand.

Naturally, it’s not just big businesses that expected to be eco-friendly and have clearly defined and public-facing policies to demonstrate it. However, small businesses have access to fewer resources, which makes designing and implementing rules and initiatives a lot more difficult.

But that’s not to say that there isn’t a clear desire among small businesses to shift sustainability and social responsibility up the agenda. New research shows that SMEs are taking steps to improve sustainability and reduce the impact of their operations on the planet. However, when it comes to realising these ambitions, cost is a barrier.

Tellingly, the same study revealed that almost two-thirds of SMEs believe that the government is not doing enough to encourage and incentivise small businesses to adopt sustainability policies. These companies want to see action both in terms of greater investment in infrastructure, such as charging points, and more advice with regard to how legislation could be changing with regard to sustainability requirements.

The desire for greater government spending in the areas of sustainability and social responsibility is understandable, not least given current market conditions and the raft of other policy and non-policy costs that small businesses must manage. However, independent action is also required and in terms of affording the costs, there is where alternative finance can help.

In the wake of extended caution from traditional lenders, a position that the stalled Brexit process has helped to entrench, the likes of invoice finance, asset finance, peer-to-peer lending and crowdfunding are redrawing the small business funding landscape.

These facilities, which offer a more personalised approach to lending, are helping small businesses grow. They are providing them with access to capital, on an affordable and flexible basis, to help manage cash flow and for critical investment, including with regard to hiring and retaining talent.

This is how a Sussex small business used peer-to-peer lending, through a commercial finance broker that specialises in alternative finance, to raise the capital to invest in new equipment.

The debate on climate change has changed significantly over the last 12 months and there is a clear expectation for companies of all sizes to increase investment in sustainability and social responsibility policies. To meet the costs of being more eco-friendly, small businesses owners need to be aware of all the funding options available to them, including alternative finance.

To find out more about A&T Business Associates services, contact Steve Bowles on 01903 602211 or steve.bowles@atbusinessassociates.co.uk.

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