Simon Cureton, CEO at Funding Options
Green Finance Comments – COP27
“UK SMEs are responsible for approximately 25 percent of the country’s CO2 emissions. If SMEs do not reduce these emissions, the UK will be unable to meet its climate goals and yet only 1 in 5 have committed to a net zero target. To stem and reverse that, these businesses require the requisite infrastructure and support to allow sustainability goals and commercial viability to co-exist – especially as they rebuild following the events of the past year.
Enabling greater capital flow into the market is vital to facilitating the transition towards sustainable practices, but entrepreneurs need easy access to green finance at a lower cost. A three step plan is required to push the UK’s transition to a net-zero economy forward.
Firstly, there needs to be access to funding for any lender, especially those that are green businesses or undertaking green financing ESG initiatives. A funding vehicle, facilitated by the state-owned British Business Bank, needs to be made available to enable lenders to originate loans to sustainable-oriented business and/or for sustainable-related purposes.
Secondly, alternative lenders need to be given a mandate which allows them to offer green lending products to businesses that qualify. A year on from COP26, very little has changed and the reality is that action needs to be taken now. The alternative finance community possesses the necessary agility to facilitate green loans at speed.
Finally, there needs to be a government promoted standardised form of assessment to be able to categorise the extent to which a business is green. Laying this foundation and providing clarity on what sustainability means for business will be crucial to moving the dial. Once we have the framework from a government body in place, which properly defines green finance, every lender can then create products that meet demand and are fit for purpose.”
“For too long the onus has been on innovative businesses and individuals to make a difference on climate action and it often feels like many are banging their heads against a brick wall. Climate conferences and pledges are all well and good but the current situation demands action. We have seen the government move swiftly on support schemes such as CBILS and, more recently, around energy bills in the public interest. The time is now for the government to step up and provide a well thought out, step-by-step plan offering both the carrot and the stick for businesses to achieve better outcomes at scale.
