The initiative helping SMEs decarbonise

Siobhan O’Neill speaks to the organisers of a new programme helping SMEs decarbonise in the London Borough of Southwark.

The Southwark Climate Collective operated by the Better Bankside Business Improvement District (BID) launched on 3rd October with around 60 SME attendees, giving them access to a range of free training, tools and their own online dashboard valued at around £6,000 of support.

SMEs are invited to sign up to one of four programme streams focused on energy, waste, freight or supply chains. They will receive a free audit of their existing processes, plus recommendations for changes they can make to their business which will make them more sustainable. They have access to expert advisers, training, networking and other initiatives to support them along the way.

The project is funded by a £653,000 grant from the Mayor of London as part of its UK Shared Prosperity fund (UKSPF), and builds on the learning of a previous project, the Business Climate Challenge. It’s hoped that this more area-focused model will grow to support approximately 160 SMEs around the borough.

Intention gap

Sadie Hodgson, Sustainability Manager at Better Bankside explained why the Southwark Climate Collective is focused on SMEs in particular. She said, “We know that SMEs make up over 90% of the business population in London. They account for 40% of non-domestic emissions. We know there are many challenges facing small businesses: if that’s the cost of living, energy, Brexit, recovering from COVID etc, and prioritising climate action is really hard to do.

“We also know that there’s an intention gap. We know that businesses want to take action on climate change, but knowing where to start can be really difficult. And so the Climate Collective is trying to engage businesses, no matter where they are on their sustainability journey. There are significant challenges of having the skills, the knowledge, the finance, the time to be able to do these kinds of projects. So the support that we’re offering is high quality, and we’re hoping it really helps businesses to take that first step and then continue to take action.”

The project is supported by some local big business technical partners who provide the audits, recommendations and some of the training for SMEs. Steer supports the freight strand, Recorra supports the waste aspect of the programme and Turner & Townsend works on the energy and supply chain elements of the project. They also provide the data for the SMEs’ dashboards.

Raising awareness

Southwark Climate Collective are hoping more businesses will support their work. Hodgson said, “We’re looking for other businesses in Southwark to support delivering the carbon literacy training, hosting networking events, for example, so that we can spread out and grow the number of businesses who are involved in this Collective. It’s not just the businesses receiving the support that we want to bring on board.”

The project also has a target to engage ethnic minority run SMEs. “We’ve got a target for 25% of the businesses to be black, Asian or minority ethnic owned or led businesses,” says Hodgson. “We know from census data that Southwark is a really diverse place to live. But we don’t necessarily know what that looks like for businesses and in particular businesses accessing support. So a lot of what we’re doing around engagement is making sure that we’re reaching out to those ethnically diverse businesses. We’re looking at the Latin community in Elephant and Castle, for example.”

The energy stream of the project encourages businesses to begin with some low and no-cost actions to start decarbonising, often around behaviour change: switching off unused appliances and adjusting HVAC systems to be more efficient during and outside operating hours. Recommendations build on the learning of organisations involved in the Business Climate Challenge, for example from Shakespeare’s Globe which reduced its energy bill by 23% by deciding to refurbish and retrofit its office space, rather than demolish and rebuild.

SMEs are unlikely to have large finance available for widescale development or retrofitting, so the Climate Collective will signpost them to other projects and funding opportunities which might support those efforts.

And just as the project builds on previous learnings, it’s hoped that this could be a model for adoption on a national scale. The Collective aims to gather data to help make the business case for councils and boroughs across the UK to adopt their own SME-targeted programme.

But they recognise that, whilst the government appears to be rolling back on climate commitments, it’s going to be difficult for hard-pressed SMEs to prioritise decarbonisation efforts. Hodgson says, “We know there are really significant challenges for SMEs, and for us, it’s really trying to say, ‘yes, we want you to reduce carbon, but actually there are significant benefits for your businesses in taking part in this.’ Through the Business Climate Challenge companies saved over £8,000 on their energy bills. There’s competitive advantage with consumers and customers being more drawn to businesses that have that sustainability credential. It’s having that network of businesses around you for support, and on other aspects of the business that you might be struggling with. So there are many other benefits, and we will give you all of the support that you need to get the most from this.”