By Lord Taylor, former energy and climate change spokesman, Defra (The Department for Environment, Food and Rural Affairs)
Small and Medium Enterprises (SMEs) represent 99% of businesses in the UK, and provide half of all private sector employment. It’s therefore natural that these organisations will play a key role, as the economy shifts to a greener footing. Economic growth and development is of course a priority. However, the unprecedented pressure on our natural resources and our climate means economic activity must be green, it’s about sustainable, long term growth. Growth that provides benefits and opportunities for UK business, consumers, society as a whole, and the environment.
We know that going green saves money. Going green also makes money. Defra research estimates that UK SME’s alone could save ten billion pounds a year by using raw materials, energy and water more efficiently. SME’s can also contribute to long term green growth in many ways, from the development of low-carbon technologies, to the creation of environmental goods and services and improvements in the way in which natural resources are used.
To take just one example, Aquamarine, a British SME won the product award at the European Business Awards for the Environment, for the development of the Oyster wave technology. This technology generates clean sustainable energy from near shore wave power. It is heartening to see that UK companies are leading the field, and around half of the UK Finalists for these awards were SMEs.
In the food and drinks industry, pubs will now be able to save almost £3,000 a year, serve better pints to punters, and conserve significant amounts of energy using state of the art drinks cooling technology being developed with Government backing. Businesses and SME’s are getting government funding to develop technology that can boost food and drink production and improve the environment. One of the winning entries, from bar equipment suppliers Brewfitt, will develop an on-tap cooling system for pubs which they estimate could save pubs approximately £700 a year in energy costs and £2,000 worth of wasted drink.
I recognise that it can be tricky to identify these resource savings and drive them out of established processes. That is why the Government announced a package of measures to help energy—intensive organisations make the transition to a greener, low carbon economy. We’ve launched the worlds’ first Green Investment Bank set up with £3 billion, to help unlock private sector investment and tackle market failures and we’re supporting innovation in a low carbon and water saving technologies.
We already have existing guidance on how companies should measure and report their greenhouse gas (GHG) emissions, including specific SME advice. Of course, emissions are an issue of increasing interest especially to the investment community and this was one of the reasons why the Deputy Prime Minister and I announced at the Rio+20 summit last month that we would introduce mandatory reporting of GHG emissions by quoted companies. Although only quoted companies will be required to do this next year, I would encourage SMEs to see the potential benefits and opportunities they could gain from actively managing their emissions and other environmental impacts from now.
The old adage of “what gets measured, gets managed” is very true and especially when it comes to environmental impacts which is why we are currently seeking input from the business community on draft guidance to support companies on measuring and reporting a range of environmental impacts including water, waste, materials, pollutants, and biodiversity - and I would encourage business to give us their views as we develop this guidance.
The low carbon and environmental goods and services sector was estimated to be worth £3.3 trillion globally in 2010/11. The UK share was over £122 billion and turnover is expected to grow at about 5% for each of the next 4 years. So there are real opportunities here, but also challenges. To make the transition to green economy businesses will need to adapt to take advantage of benefits and manage risks.
The economy will be more resilient and prepared for the implications of climate change and environmental risks such as floods and heat waves. SME’s too will need to think about their own resilience and that of their supply chain ensuring they are prepared for environmental risks in the future and businesses can continue to operate.
Simple measures which businesses can take would pay back in less than a year; this includes things like turning off lights when not in use and refilling inkjet cartridges rather than buying new ones. It also means saving around four percent on our annual carbon emissions. Through our support in these areas, we want to help SME’s to seize these opportunities. We want all business to understand this challenge, and take advantages of the opportunities it presents.