UK SMEs are struggling to put in place their action plans to combat climate change and become more sustainable due to high inflation.
According to NatWest’s Sustainable Business Tracker, it has been concluded that two thirds of UK SMEs have suggested that rising costs will have a significant effect on their climate action this year (2023).
Due to rising inflation, SMEs were subject to several difficulties including higher borrowing costs, lower demand and a reduced rate of output volumes. One of the worst sectors hit was the construction industry, as, since May 2020, it saw a major fall in business activity. Leading to a huge hit to the sector.
Many of these difficulties came from the rising costs within the UK and around the world, as the price of energy and raw materials have seen significant increases. This is putting pressure on SMEs that manufacture and produce goods and services.
The study has shown that at least 39% of SMEs surveyed wish to prioritise their action plans to combat climate change within the next year. However, 68% have claimed that they cannot carry out the climate action plans, due to these rising costs. This may be the reason why the percentage for SMEs prioritising their climate action plans is so low, one of the lowest percentages since February 2020.