Green funding for businesses: considering your options
Green funding for businesses: considering your options
07 February 2022
Awareness around the global climate crisis is pushing businesses to make more environmentally responsible decisions. Sustainability is now a core factor in consumer buying choices, and this market pressure is pushing more and more companies to think about what they can do better – and how.
This shift creates huge opportunities, where businesses have space to thrive through making real, positive impact in the world. However, there is also the shared challenge of transitioning that all businesses must face, and which looks different depending on what type of business you run.
For small and medium sized businesses, it can feel especially difficult to make positive changes and promote environmental practices, as upfront costs can be steep. However, there is support available no matter the size of your company.
Financial support can help you to cover the short-term and perhaps ongoing costs that environmental and sustainability initiatives incur. Knowing where to go for funding, what to expect, and how to prepare can make responsible decision-making in your business attainable from the start.
The type of funding support that is available to you will depend on:
What kind of business you run
Where you are based
The kind of project or initiative you want to set up
The impact that this initiative seeks to have
What you could get funding for
There are so many possibilities for what you could find funding for to support your journey to a more environmentally responsible business.
These include:
Energy-efficient equipment
Waste management and reduction
Renewable energy and green buildings
Sustainable innovation
Other positive environmentally-impacting projects or initiatives
Choosing the right type of support for your business
Loans
Loans are generally the best form of financial support to opt for if you are looking to invest in assets such as machinery, rather than financing ongoing costs relating to long-term projects.
While loans have to be paid back with interest, they do have certain advantages that may make them the best option for you. They have the benefit of being less restrictive than grants, meaning that you may be more able to use the money in a way that best fits your purposes and vision. They are also generally easier to access when you need them, and are often more quickly arranged than grants, which tend to have deadlines and longer stages for approval.
Loans can come from various sources, such as business support agencies, local government authorities banks and other specialist lenders. There are often particular loans available from these sources for small businesses, or for businesses looking to reduce their carbon footprint or to develop eco-friendly products, for example.
Grants
If you are looking to set up a project or initiative or to embed environmental practices into your business which will cost money to action, then grants may be your best avenue for financial support. This is because grants are generally aimed at financing projects with defined goals, which can be monitored and measured over time.
Grants have the major advantage of not needing to be paid back, and so can often be the more attractive option. However, be aware that some grants are given as ‘match funding’, meaning that the funding body will provide money towards your project to add to your own contribution. This may be 50%, or it may be less – make sure you look into how this works if a grant scheme offers match funding.
You can often find grants available from the government, local authorities, specialist agencies, and non-governmental organisations (NGOs).
If you would like to learn more about securing green funding for your business, check out the rest of our blogs in this green funding series: Finding and Securing Funding and Funding Avenues.
If you would have any questions, please get in touch at info@esgmark.co.uk, we would be delighted to help.