A new report from the government-backed Willow Review has found that UK small and medium-sized enterprises (SMEs) that are embracing sustainability are already seeing measurable business benefits, including cost savings, new customer acquisition, and improved customer loyalty. However, the report warns that persistent barriers are hindering wider adoption, thereby threatening the UK’s green growth potential.
With SMEs representing 99% of UK businesses and accounting for around half of all business-related carbon emissions, their role in achieving national climate targets is crucial. The Review surveyed 425 small businesses and found that 67% of those implementing sustainability practices reduced operational costs, 52% gained new customers, and 33% improved customer loyalty. Many reported using sustainable materials, cutting waste, limiting travel, and sourcing from greener supply chains.
Despite these advantages, many SMEs struggle to take action due to upfront costs, time constraints, and difficulty accessing financial or advisory support. To address this, the Willow Review issued 14 recommendations across three key areas: simplifying sustainability guidance, expanding access to finance, and creating a more supportive policy environment.
The report calls for clearer signposting to existing funding options, the creation of tailored ‘Green-Up Loans’, and reforms to government schemes like the Growth Guarantee Scheme to support green investments. It also urges integration of sustainability into core services such as the Business Growth Service, alongside incentives for landlords to improve energy efficiency in SME premises.
