The green market is already worth £112bn to the UK and is set to expand rapidly in the next four years creating new jobs and export opportunities. So how can SMEs become part of Britain’s green growth agenda?
After a painful few years, all economies are looking out for encouraging signs of recovery, growth and new opportunity. The green economy is a good place to start, suggests the Carbon Trust. Currently employing more than 900,000 people in Britain, the sector is set to grow by over £5bn a year to become worth £140bn to the country by 2015.
While China and the US make up one third of the total global green market the UK has become the sixth-largest country in this field and the government regards “green growth”—the economic progress achieved through carbon reduction and sustainability—as a key area of focus.
Why? There are myriad reasons, not least the significant economic rewards to be had for organisations through increased sales, new revenue streams and clearer business opportunities in the UK and abroad.
Competitive advantage
Through developing green products and services companies are giving themselves a better opportunity to access international markets. Encouragingly, Britain is already home to thousands of businesses at the cutting edge of clean technology which are exporting their innovations globally to support a long-term vision of energy security and economic returns.
But this isn’t just about chasing a profit. Businesses that put sustainability at the heart of their strategy can also benefit by reducing operating costs. Just by managing energy consumption better they could reduce their bills by as much as 20 per cent, for example.
As Miles Templeman, director-general of the IoD, points out: “The green agenda is important to all businesses. The rise in energy costs by itself provides an incentive for businesses to become more energy efficient. In addition, energy costs are a major component of businesses’ costs and by implementing energy efficiency measures companies can improve their competitiveness and reduce their costs.”
Bold action
Then there’s the matter of reputation. Research by the Carbon Trust shows that over 65 per cent of consumers think it’s important to buy goods and services from environmentally responsible companies. Suppliers large and small are also under the radar as their green credentials are scrutinised. In this trying market, which firm has the luxury of losing customers to a competitor with better guarantees?
And of course there’s a huge opportunity for the UK to grow export revenues in this sector, which in 2008 accounted for £10.8bn. Seven out of 10 business leaders have told the Carbon Trust that they expect the green economy to account for a larger percentage of exports in five years’ time.
But according to this same research, it appears the UK government has a challenge on its hands. The reason? Many business leaders are failing to make the most of chances created by the growth of the green economy. They tell a good story but don’t deliver the goods.
Name a country that’s most likely to take advantage of the global green economy and senior decision-makers in the UK will say Germany. While 92 per cent believe green growth represents an opportunity for their business, only a third are actually investing money in the research and development of green products and services. This matters because, according to Carbon Trust chief executive Tom Delay, no other sector can drive the recovery.
He says: “Green growth is the only show in town. The consequences of British businesses failing to grasp this opportunity are almost too horrific to consider: anaemic growth, a jobless recovery and the risk of a return to the economics of boom and bust. We cannot afford to carry on as we did before.
“Businesses need to look beyond the short-term financial reporting cycle and place some smart, early bets on the future. Otherwise the cost, both to the UK’s economy and to the environment, will be too great to ignore.”
And this is where organisations such as the Carbon Trust come into their own. It has already helped thousands of UK companies catalyse the market for low-carbon products and services and helped companies across the country better understand how they can seize new green growth opportunities. On another level, it helps companies with regulatory compliance to find low or even no-cost measures to help them lower overhead costs.
What it would have business do now is straightforward. It’s encouraging UK businesses to join the likes of Kingfisher, Aviva, GE and PepsiCo to explore the new commercial opportunities that green growth offers. To develop new green products and services and commercialise low-carbon technologies. Standing still is no longer an option.
CASE STUDY
Company Lamport Gilbert
Sector Print, mail, project management
Pressing issue
Lamport Gilbert is a 40-employee printer and designer based in Reading that produces print catalogues, brochures
and leaflets for its clients as well as offering mailing, logistics and project management services.
As the UK print industry averages £67m on energy bills every year, it can
be a pricey and environmentally unfriendly sector. As Andy Robbins, managing director at the company, explains: “We’ve got a fairly substantial plant and some
of our printing presses use an awful lot
of energy.”
But the company has always strived to examine every aspect of its operations in order to limit its impact on the environment and it’s never been a box-ticking exercise: Robbins says: “We have a forward-thinking management team who believe it’s right but can also see the benefit for the business both in terms of the way customers see us and also in terms of saving money through reducing energy costs and waste.”
The business began working with the Carbon Trust in 2008 and during this time its energy costs have decreased by £10,000 and it has saved 26 tonnes of CO2. As Robbins explains, after an electricity audit the company now uses passive infrared sensors (PIR) to control the heating and lighting throughout its building which “saved us a substantial amount in terms of electricity bills”.
There have been other benefits, adds Robbins. Lamport Gilbert’s reputation has grown among its customers, which acknowledge how hard it has worked to improve its green credentials and the firm has even been approached by new clients as a direct result.
It took the company 18 months to achieve the ISO 14001 environmental standard but Robbins says it’s important to stick with green growth. “You’ll soon see the benefits,” he says. “For us it’s only been a relatively small capital outlay. And people in all areas of the business appreciate being involved. It’s worked really well.”
For more information visit www.carbontrust.co.uk/greengrowth
or call 0800 988 3713. Look out for the Carbon Trust special report on green growth opportunities with the April issue of Director
