Delivering Net Zero – the role of small businesses and funders

13 December 2023

The Finance & Leasing Association (FLA) and the Federation of Small Businesses (FSB) are today launching their joint report, Delivering Net Zero – the role of small businesses and funders

Speaking at Portcullis House to the All Party Parliamentary Group on Small and Micro Business, representatives from both trade associations will explain that the Government’s Net Zero ambitions can only be achieved if small businesses invest in new equipment with a smaller carbon footprint. 

Funding from the finance and leasing sector will be vital to make those investments more affordable, but to create the conditions where green investment is a viable option for more small businesses and a fundable proposition for lenders, the UK needs a credible Green Roadmap setting out the key deadlines for different sectors and the Government support available to firms making greener choices. Both are needed urgently. 

Stephen Haddrill, Director General of the FLA said: 

“Achieving Net Zero will require firms to make fundamental changes to their operations, including production methods, materials, distribution, packaging, and power usage. They deserve more clarity, consistency and certainty on what is expected of them by when, and competitively priced finance to make it happen. 

“Lenders need the Government to share the risks of funding green assets so that finance remains affordable, plentiful and available across the full breadth of the economy.”   

Martin McTague, National Chair of the Federation of Small Businesses (FSB) said: 

“Recognising their role in combating climate change, the vast majority of small businesses are already taking action to mitigate their impact on the environment, from installing energy-saving lighting to self-sufficient microgeneration.

“The creation of a net zero economy needs small businesses to go further, which requires support from the financial sector and governments across the UK. This report importantly identifies what this support should be and where policymakers must do their part to enable 5.5 million small businesses and the self-employed to reach net zero.” 

Today’s report, Delivering Net Zero: the role of small businesses and their funders, calls for: 

  • Government risk-sharing via the British Business Bank for green assets.
  • A “Green Roadmap” backed by statute, setting out the key deadlines for different sectors and the government support available to businesses.
  • Government vouchers for businesses as part of a “Help to Green” initiative.
  • A ‘Green Tax Allowance’ for small businesses.
  • Changes to the VAT system to encourage green investment.
  • Lowering the capital requirements for lending on green investments.
  • A taxonomy of green assets developed with industry and backed by Government, to help provide certainty for businesses and target incentives.

 Notes to Editors 

  1. Delivering Net Zero – the role of small businesses and funders can be found here
  2. In 2022, members of the Finance & Leasing Association provided £148 billion of new finance to UK businesses, households and the public sector.  
  3. Of this total, £55 billion was provided by non-bank lenders. £34 billion was provided in the form of asset finance to businesses - £22 billion of which went to SMEs to fund new equipment, plant and machinery, or purchased software. £115 billion was provided in the form of consumer credit, which includes £50 billion of motor finance supporting the purchase of 84% of all private new car registrations.
  4. For media enquiries, please contact the FLA press office on 020 7420 9656.



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