The Willow Review offers the following recommendations to government, SMEs, and financial services to ensure UK small businesses realise the commercial case for sustainability.
The Review highlights the importance of Government developing long-term consistency and clarity around policy and regulation as it impacts SMEs, ensuring that they can have confidence in their sustainability efforts.
Government
Local Sustainability Champions - Assign sustainability champions at the council level to provide tailored support to SMEs, linking to local funding.
Reframe Sustainability Messaging - Focus on growth, competitiveness, and profitability rather than compliance to better engage SMEs.
Campaign to Enhance uptake of existing resources - Develop ways to enhance uptake of existing resources such as UK Business Climate Hub.
Support SME Transition through engaging landlords to facilitate SME energy usage transition.
Improve Access to Finance - Improve visibility and accessibility of existing sustainability grants by simplifying application processes and enhancing signposting; British Business Bank should also consider adapting existing initiatives such as Start-Up Loans with Green-Up Loans to support transition.
Expand the Growth Guarantee Scheme to include Green Initiatives - Consider expanding existing government guarantee schemes to enable access to green finance for SMEs, to incentivise larger-scale sustainability investments. The British Business Bank has launched a pilot to support this type of lending and, using insights from the pilot, should develop the proposition further with the aim of announcing a permanent Green Guarantee Scheme by the end of 2025.
Drive Forward Fiscal Incentives for SME Sustainability - Work collaboratively with the Department for Energy Security and Net Zero, HM Treasury and the Department for Business and Trade and The Willow Review to develop a set of recommendations by the end of the year focused on improving fiscal incentives for small businesses. This will include but is not limited to: simplifying existing schemes and boosting awareness and accessibility.
Integrate sustainability into the core offering of the Business Growth Service - Ensuring that SMEs receive clear, consistent, and practical support for their sustainability transitions.
For SMEs
Adopt a 5-Point Plan for Sustainability – Encourage SMEs to take 5 simple, actionable steps:
Switch to sustainable materials.
Reduce travel and optimise logistics.
Minimise waste.
Take action on energy.
Partner with sustainable suppliers and customers.
Join SME Sustainability Networks – Participate in mentoring programmes and networks to share best practices, facilitated by Government, financial services and business support organisations.
Investigate informal and formal tracking of sustainability measures (such as carbon emissions and waste reduction) as a tool to demonstrate and motivate progress.
For Financial Services
Provide Green Finance Education – Offer advisory services to help SMEs understand green commercial opportunities.
Support Sustainable Business Planning – Help SMEs develop business plans that clarify return on investment (ROI) for sustainability initiatives, and champion the digitisation of carbon and energy data to better understand the opportunities and long-term benefits.
Innovate Green Finance – Champion innovative funding mechanisms and greater access to support from public and private sector, to enable green finance demand to grow.
