New research shows encouraging signs that UK businesses are looking to reduce their carbon footprint by switching suppliers and re-shoring to the UK, as well as improving their own operations.
The latest issue of the NatWest Sustainable Business Tracker found that nearly half of the SMEs surveyed (46 per cent) have already taken the decision to switch to a domestic supplier at least partly due to sustainability concerns.
Switching supply - a rising trend
A further 20 per cent are looking to re-shore at least part of their supply chain to boost sustainability during the year ahead, suggesting that around two thirds of SMEs will have switched at least some of their external vendors to domestic suppliers by summer 2023. On a five-year horizon, the research suggests that this figure will rise to three quarters of all SMEs in the UK.
Businesses are also readjusting their supply chains by switching to suppliers with higher environmental credentials, with 28 per cent of those surveyed having done this already.
“Global supply chain pressures have focused SMEs’ priorities on switching to UK suppliers. This ensures they have the consistency they need while matching up to their increased sustainability priorities,” explained Andrew Harrison, head of business banking at Natwest Group.
‘SMEs need to be supported’
When asked about their own operations, over half (51 per cent) of SMEs reported generating their own green energy as a high priority for the year ahead – the largest percentage in the survey’s history. Overall, 43 per cent of those surveyed said sustainability was a priority for them, up from 40 per cent in the previous quarter and the highest since the start of the pandemic in 2020.
Andrew Harrison added: “NatWest’s Springboard to Sustainability report, published in October 2021, found that 50 per cent of the UK’s carbon reduction ambition can be delivered by the SME sector. This could also unlock a £160 billion opportunity for them. Sustainability, recovery and growth go hand-in-hand and SMEs need to be supported to know how to make the most of the opportunities that lie ahead.”
