New research reveals that a quarter (26 per cent) of small businesses are giving a higher priority to environmental considerations this year, in spite of the current economic pressures.

This contrasts with 16 per cent of small businesses who have downgraded environmental issues this year in order to keep their firms afloat, with nearly half of them blaming the cost. But small business owners admit they would like to do more, with 42 per cent saying they are held back from improving their environmental practices.

Around one in six (17 per cent) have not been able to make their companies more environmentally sound, as desired improvements are prohibitively expensive. One in 10 (nine per cent) are hindered because of restrictions placed on the business or the premises, while four per cent say they don’t understand the changes that could be made.

Despite this, nearly all (98 per cent) small business owners claim to have taken some measures to improve their environmental impact, up from 80 per cent in 2008, spending a total of £1.5 billion, or around £1,000 per company, in the process. The measures taken, range from ensuring that all electrical equipment is turned off when not in use, through to the installation of renewable energy sources.

Changes made by businesses to reduce environmental impact

Type of change made	per cent of companies which have made change
Make sure all electrical equipment is turned off when not in use	80 per cent
Encouraged staff to use scrap/recycled paper	64 per cent
Set up a recycling scheme for waste	64 per cent
Bought low energy light bulbs	59 per cent
Cut down heating and/or air conditioning usage	56 per cent
Encouraged staff to reduce the amount they print	44 per cent
Upgraded old equipment to more energy efficient versions	42 per cent
Encouraged more conference calls to cut down on travel	20 per cent
Allowed staff to work from home to cut down travel	16 per cent
Purchased energy efficient vehicles	9 per cent
Introduced a car sharing scheme	7 per cent
Provided staff with passes for public transport	5 per cent
Introduced a bike to work scheme	3 per cent
Installed renewable technologies e.g. solar panels/ wind turbines	3 per cent
Have made no changes	2 per cent

Paula Ickinger, head of business banking marketing at Abbey and Alliance & Leicester said: “There are one and a half million small businesses in the UK, so it is very encouraging to find that so many of them have taken steps to reduce the environmental impact of their operations, in some cases at great expense. While some of these changes are relatively minor, the cumulative impact will have been huge.

“It is particularly interesting that so many companies have actually made environmental considerations a higher priority since the economic downturn. Many green initiatives incur a significant up front cost, which can be off-putting but in the longer term they can help to reduce overheads as well as carbon emissions.”

The Federation of Small Businesses (FSB) has opened its £500,000 Disaster Recovery Fund for its members in Scotland, Lancashire and Cumbria and the North East of England, which have been adversely affected by recent heavy rain and flooding.

The FSB is offering interest-free loans of up to £5,000 to help small firms cover costs associated with keeping their business trading and with repair of their premises.

John Wright, national chairman of the Federation of Small Businesses said: “The last 18 months have been difficult for FSB members up and down the country, so the last thing otherwise successful FSB members need is unpredictable weather and flooding to damage their prospects. The FSB recognises that to ensure that the long-term damage to the areas affected is mitigated as best it can, all bodies, public and private, need to work together closely and effectively.

“That is why the FSB is stepping in and providing this additional service for its membership in the affected areas.

“We are also asking other institutions which have a bearing on local small firms’ cash-flow – such as banks, local authorities and Regional Development Agencies – to reassure our members that they will be as understanding and flexible as possible.”

More business owners are waking up to the benefits of going green according to a survey of small business owners.

Research conducted on behalf of Alliance & Leicester Commercial Bank, shows four out of five (80 per cent) small businesses have made changes to improve their green credentials.

Three in ten small business owners (29 per cent) expect the improvements will lower their operating costs – an achievable target given that the Environment Agency believes that savings of around £1,000 per employee can be made each year through basic energy efficiency. However, for nearly two thirds of small business owners (62 per cent) the main driver to become a greener business is their own personal principles and more than two in five (44 per cent) have spent up to £15,000 on eco-initiatives.

As well as helping the environment, switched on SMEs are cutting their bills and their carbon footprint. Over half (55 per cent) make sure all electrical equipment is turned off when not in use, 51 per cent have invested in low energy light bulbs, 30 per cent have cut down on heating and air conditioning usage and 19 per cent have upgraded old equipment to more energy efficient versions.

Staff are also being encouraged to participate in green schemes to maximise their impact. A quarter (25 per cent) of small business owners support staff in reducing the quantity of documents they print, two in five (40 per cent) said staff re-use paper, over a quarter (28 per cent) have a recycling scheme in place for office waste and one in six (16 per cent) allow staff to work from home to cut down on travel.

In addition, nearly half (45 per cent) of SMEs questioned wish they could implement even more environmentally-friendly practices.

Steve Jennings, director business management & strategy at Alliance & Leicester Commercial Bank said: “Our research highlights that many business owners are embracing the green cause. This is benefitting their business financially as well as reducing their carbon footprint.

“With the economic downturn set to continue, businesses are looking at adopting new ways to reduce overheads and by incorporating a number of initiatives to save energy, considerable cost savings can be made.”