Where to find Green Funding for your business
As world temperatures rise and our climate becomes increasingly unpredictable, pressure is mounting to make more environmentally-friendly choices. In 2019, the UK Government pledged to achieve net-zero carbon emissions by 2050.
Emissions across the UK must drop by at least 78% by 2035 to reach net-zero emissions by the middle of the century. The government has created almost five billion in funding for businesses so companies can place sustainability at the forefront of their development.
Over the past five years, 85% of consumers have consciously sought out sustainable businesses as they seek to play their part in creating a greener world. Don’t fall out of favour with your customers and instead make sustainable changes today to safeguard your future.
How to Choose the Right Funding for Your Business
Small businesses are currently spoilt for choice with regard to green funding. As well as the government, companies can find financial backing from their local authority, banks, specialist agencies and non-governmental organisations (NGOs).
This guide provides your business with the tools essential to finding the best option for you. By empowering you to make the right choice, your company can bloom and grow in a sustainable fashion.
Grants Vs. Loans
Grants don’t have to be paid back, making them an exceptionally appealing choice. However, they are typically much more restrictive, and the financial backer will have specific requirements about how a business can spend the money.
The grant is typically provided in instalments. Your business will be required to give regular updates on how the money is being used effectively by your company. Mismanagement of funds may result in the grant being revoked, and your company may be responsible for returning any financial aid already accepted.
Who Can Provide Financial Support for Your Company?
Depending on how ambitious your sustainable business plan is, you'll need different amounts of funding. For significant investment funds, the government, banks and specialist agencies are typically the most generous.
Financial Projects Provided by the Government
The government provides a wealth of funding opportunities. As 2030 draws closer and the government pushes to reach net-zero, it's likely even more funding will become available.
The Department for Business, Energy and Industrial Strategy, alongside the Department for Environmental, Food and Rural Affairs (DEFRA) provide grants, loans and advice to businesses. Between them, they offer a range of services, including:
- Grants to improve energy efficiency and cut down on fuel use.
- Free energy audits to determine your businesses energy efficiency.
- Advice on reducing carbon emissions.
- Expert advice on developing low-emission equipment.
- If you’re generating energy using renewable sources, your company is eligible for 100% tax relief on renewable energy products. This includes the use of solar panels, heat pumps and biomass boilers.
- Provided your company commits to increasing energy efficiency, you’re eligible for a tax cut on your Climate Change Levy taxes.
Current loans available can be found on their website, each with specific requirements and goals. If your company is looking to invest in green technology and improve your energy efficiency then a number of suitable schemes are currently available.
They also have several grants currently available aimed at transforming businesses to rely on sustainable energy and resources whilst improving energy efficiency.
Green loans from banks
Lloyds have launched their Clean Growth Financing Initiative that offers companies a 0% arrangement fee on loans to reduce emissions across the business. Companies with £3m+ in annual revenue can apply.
Triodos were one of the first UK banks to focus on ESG lending. They have a range of options for businesses, from online business accounts to green loans.
Other Loans and Grants Available Now
If you can’t find a government scheme perfect for your business you can contact your local authority directly to see what they can offer you. This is often the best choice if your business is looking for a small financial contribution.
What to Consider Before Applying for Investment
Assess what your specific business needs are before you begin your application for financial support. Once you’ve decided what you want to achieve you can determine what resources you’ll need to make your plan come to life.
Devise a timeline over which you’ll meet your green targets and development plan. Once this is done you can determine how much financial backing you’ll need.
Ensure you are clear on the outcome of your investment and detail how it will benefit you financially whilst protecting the environment for future generations.
This information will guide you towards the perfect financial support package for you. Once you’ve found your perfect pairing, you then need to understand your financial contribution - covering repayments and penalties for misguided judgements.
Finally, redevelop your business plan to put sustainability at the heart of your company growth. This displays a commitment to environmentally-friendly practice and will boost confidence in your financial backers and your clientele.
Transitioning to Renewable Energy
Experts predict that by 2050 solar power will be the dominant energy source across the world. As fossil fuel supplies dwindle, it’s illogical not to diversify your business’s energy supply.
Reduce your emissions by swapping to a green energy supplier, such as Green Energy UK or Octopus Energy. They provide energy that is 100% derived from renewable sources.
Alternatively, opt for a green energy plan from E.ON Energy, Shell, or SO Energy. While the energy company may generate energy from non-renewable sources, all of the energy your company consumes is from sustainable sources.
If feasible, you can generate your energy via wind, solar or hydroelectric, depending on your energy demands and resources. This is an excellent way to boost profit whilst protecting the environment, as any surplus energy produced can be sold back to the National Grid via the Smart Export Guarantee (SEG).
Businesses and individuals must adapt quickly to protect the planet, for ourselves and future generations. Adopting renewable, efficient energy resources is essential in achieving net-zero carbon emissions across the country by 2050.
While the initial cost of developing your business may appear significant, there are a wealth of loans, grants, tax cuts and expert information available to help. In the long run, green investment will save your business money, directly translating into more profit.