• Bookstore

The study reveals that the number of small firms who see themselves as environmentally friendly has actually fallen over the past few years – perhaps an indication of the growing awareness amongst firms of the actual lengths they need to go to, to become more environmentally sound.

More than half (52 percent) of the UK's small businesses believe they still have some way to go before they become 'environmentally friendly' – a nine percent increase on a similar survey in 1999. This is despite the fact that most firms (57 percent) realise customers are becoming increasingly sensitive to green business issues.

The firms questioned cite several reasons for their lack of action. A fifth (21 percent) blamed a lack of information on environmental issues; 15 percent said they lacked the time to make the necessary changes; and 12 percent said they didn't fully understand the laws relating to 'green' business. A worrying 14 percent said they didn't believe environmental considerations were relevant.

Of the actions taken by firms which have made moves to improve their green credentials, most relate to transport. A third (33 percent) have cut down on non essential business travel, however, just one in ten (11 percent) have switched to cleaner fuels. Similarly, only 14 percent have started to make greater use of public transport and just one in ten (11 percent) have cut down on air travel. However, in a sign of things to come, four percent have begun to use hybrid vehicles.

Some firms have also made non transport related changes. A quarter (26 percent) have begun to make more use of technology such videoconferencing to reduce reliance on meetings; one in ten (11 percent) have downsized their business, for example by moving to a smaller premises; and a similar number (nine percent) have changed the focus of their products and services to make them more environmentally friendly, for example by dealing only with customers who are 'green'. One in twenty (five percent) have gone to the extreme of relocating to reduce their impact on the environment.

When questioned about the future, the vast majority of firms (78 percent) say they expect costs to rise over the next two or there years, as the pressure to go green mounts. However, just over half (55 percent) expect these costs to dent profits. On the other hand, a third (31 percent) are bracing themselves for slower growth, while a quarter (24 percent) expect staff cuts.

Stephen Pegge, head of communications, Lloyds TSB Business said:
"No business can afford to ignore the environment, but it's clear from this study that many need more information and support to help them take action.

"This study seems to show that the potential cost of going green is a real worry for some small firms. However, those firms that are taking steps to change are demonstrating that a lot can be done to make an impact – and these changes don't always cost the earth. Indeed, sensible management of energy, waste and travel usually saves costs.

"More importantly, as customers become increasingly sensitive to environmental issues and as the business opportunities around environmental management expand, a greener SME sector could really make a huge difference by helping them grow their customer base and helping all of us by applying the innovation, flexibility and drive that's the hallmark of smaller firms."

Professor John Stanworth, of Westminster Business School, who authored the report, said:
"The days of plentiful and relatively cheap energy seem to be numbered. For example, the UK's self-sufficiency in gas is predicted to deteriorate quite markedly over the coming decade.

"Meanwhile, though, it is suggested that we are on the verge of becoming a permanent net oil importer. And so our smaller firms would be well-advised to assess - sooner, rather than later - the opportunities and costs that will arise from the demands of an increasingly energy-efficient future."