Three Quarters of Mid-sized UK Businesses Investing in Green Initiatives Benefit Commercially

As green issues continue to make big headlines, four fifths (82%) of mid-sized UK businesses have taken action on environmental sustainability. However, less than half (40%) indicated that they expect the amount they will invest in this area to increase over the next five years and only a similar amount (39%) view environmentally responsible programmes as ‘extremely important’.

Published today, the Barclays Environmental Commitment: Beyond a ‘Nice-to-Have’ report examines the emphasis being placed on green investment by business leaders and the obstacles they are facing when considering whether to invest more in green projects. While the UK’s biggest companies are increasingly embracing more investment in environmentally sustainable activity, less focus has been given to the environmental actions of mid-sized organisations. For this reason, the report explores the specific challenges facing mid-sized businesses and looks at the regulatory, reputational and commercial considerations that are influencing investment decisions.

The financial and reputational benefits of going green

Three quarters (73%) of businesses say they have experienced at least one commercial benefit from taking environmentally responsible actions, with more than a third indicating that this investment had led to reduced operational costs (37%). Reputational consequences are also recognised by a significant number of leaders, with a third (31%) taking environmental action ‘because it’s the right thing to do’ and 27% because they want ‘to be recognised as an environmentally responsible business’. Regulatory demands were cited by fewer respondents as the driver behind green investment (19%). However, four in ten (40%) do believe that existing environmental rules and regulations have had a positive effect on their business, compared to just 16% who think they have had a negative effect.

Despite the commercial benefits identified by most businesses who have invested in green projects, a quarter of businesses reported that that investment of this kind was ‘not a business priority’. The primary barrier to investment identified was cost, with financial concerns highlighted by one in three businesses as preventing more green investment. Lack of funds (19%) and concerns about return on investment (16%) were the most commonly cited financial worry. For the companies discouraged by financial obstacles, more than half (57%) think that the most effective way for these barriers to be overcome would be through incentives from government such as tax breaks or subsidies.

Tony Walsh, Head of Mid-Corporates, Barclays Corporate Banking, said:

“It’s a mixed picture, with most mid-sized companies taking some steps to invest in green activity, but with much more still to do. We found that there are clear commercial and reputational benefits if businesses do more in this area, as well as growing regulatory demands to increase green investment. It’s up to all of us: individual companies, trade bodies, government and finance providers to come together and make sure that investment in green initiatives is accessible and prioritised sufficiently. If you’re a business leader and the risks and opportunities around the green agenda are not being discussed in your boardroom, you might miss out on the commercial advantages that are available and suffer reputationally, and could be left behind.”

One business to have recognised the benefits of green investment is Unipart Group, the manufacturing, logistics and consultancy provider headquartered in Oxfordshire. They have become the first company to implement an environmentally responsible initiative through Barclays Green Asset Finance programme. Unipart has secured a £370k loan facility to fund the installation of LED lighting, fixtures and sensors at their warehouse in Cowley. The new lighting is environmentally positive as it will result in lower energy consumption and longer lifespan compared to traditional lighting. Unipart will also gain from lower energy costs in the warehouse, with the commercial benefits expected to be realised within 12 months. 

The Barclays Environmental Commitment: Beyond a ‘Nice-to-Have’ report is based on a survey conducted by YouGov on behalf of Barclays. Interviews were conducted between 2 October and 23 October 2017, with 535 senior managers in mid-sized UK organisations across a range of industries.

Barclays Green Asset Finance supports the finance of a variety of Green Assets through lease purchase, finance and operating leases. Qualifying Green Assets are defined by the Barclays Green Product Framework, which was developed with Sustainalytics, the global provider of environmental, social and corporate governance research and ratings.

About Barclays
Barclays is a transatlantic consumer and wholesale bank with global reach, offering products and services across personal, corporate and investment banking, credit cards and wealth management, with a strong presence in our two home markets of the UK and the US.

With over 325 years of history and expertise in banking, Barclays operates in over 40 countries and employs approximately 85,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide.

For further information about Barclays, please visit our website www.home.barclays.