Energy top concern as small businesses make sustainability a priority for 2022

The majority of UK small business owners (58%) have started 2022 looking to improve their sustainability credentials - with small businesses in the agriculture, manufacturing and hospitality sectors most likely to be making sustainability a focus for the year ahead.

Energy was the top priority. Following weeks of soaring energy prices, likely to be exacerbated by the mounting Ukraine crisis, reviewing energy usage was the top sustainability concern for UK small businesses (25%), who were prioritising a full review of heating bills and looking into renewable energy options.

Other top sustainability improvements for 2022 included; improving policies towards packaging, waste and recycling (18%), improving working conditions for all employees (19%), and investing more in local suppliers and contractors (15%).

The Novuna Business Finance poll of 1,132 small business decision makers grouped survey responses into the three key areas of sustainability - planet, people and profit. The results suggested a broad appreciation of sustainability issues spanning planet (39%), people (27%) and profit (25%) considerations. Overall, in eight industry sectors, small business owners were most likely to prioritise planet or environment issues - and in the remaining sectors it was people issues that came before profit. These findings suggest that whilst many small businesses see bottom-line benefit from supporting sustainability, their primary focus is to do their bit to avert the climate crises and support people in their community.

Percentage of small businesses that plan to do more to support sustainability issues in 2022 - and breakdown on focus areas into planet, people and profit themes.

Protecting the planet: Environmental sustainability

Despite the mixed progress made at COP26, environmental sustainability was the top priority for the small business community. Top areas to tackle included: reviewing energy usage (25%), improving policies towards packaging and waste for products and services (18%), exploring greener forms of transport (12%) and monitoring and reducing any harmful impact on the community (6%).

Looking after people: Social sustainability

With mounting public pressure for businesses to provide employees with suitable and fair working conditions – and the likes of ‘fast fashion’ brands being under fire in recent months – small business owners were keen to make progress when it came to their social sustainability. A fifth of respondents committed to ensuring suitable working conditions and fair treatment for all employees (19%), making this the second most important area to focus on for those businesses looking to improve sustainability in 2022.

Investing in the local community through employment (15%) and working more with local suppliers (15%) was also seen to be a key target, with business leaders recognising that community health and cohesion was an important aspect of sustainability.

Sustainable growth and profit

Beyond the environment and community issues, small businesses also plan to do more in 2022 to ensure they are part of an ethical supply chain (12%), invest where possible in new equipment and a sustainable infrastructure (9%) and make progress with governance and risk management (7%).

Joanna Morris, Head of Insight at Novuna Business Finance commented: "With the climate crisis front-of-mind, sustainability is one of the most pressing issues for businesses to prioritise in 2022. To date, the views and contribution of the small business sector to this crucial issue has been largely ignored by policy makers and influencers. Given the seismic contribution that the small business community makes to the economy at large, we need to better understand and support the work this sector is doing not just on environmental issues but sustainability more broadly. Our survey suggests small business owners could in fact be role models from the private sector in driving progress on the issues that matter. There is evidence of a healthy balance of work being planned on economic, social and global issues and we must all support this. Novuna Business Finance will be exploring these issues more fully this year and we hope to give a voice to the small business community - and to celebrate the meaningful sustainability contribution they make to society at large."

Small business research

The research was conducted by YouGov among a representative sample of 1,132 small business decision makers on 9 February 2022 spanning industry sectors.

Additional tables

Percentage of small businesses working to improve on sustainability in 2022 - by region

Specific areas of sustainability that small businesses are working to improve on in 2022