Novuna Business Finance’s latest research reveals a bold shift among UK SMEs, with 89% actively pursuing suppliers who have solid green credentials and a shared commitment to carbon neutrality.

As government initiatives urge business to commit to climate change pledges and recent policy making it mandatory for SMEs to present verified carbon reduction plans to potential suppliers in the future. SMEs are not only anticipating these requirements but are also implementing thorough ‘sustainability checks’ to identify suppliers who align with their carbon neutral objectives.

A survey of over 1,000 small business leaders (nationally representative and multi-sector) by Novuna Business Finance asked business owners when thinking about their own carbon emission targets and the supply chain, what do they look for when working with a supplier.

High Standards And Thorough Research

Small Businesses are raising the bar for sustainability standards, with 35% seeking suppliers who share their values and commitment to carbon neutrality. A further 23% of business insist on reviewing supplier’s green credentials, including conducting internet searches, which 41% research and assess their green credentials online.

Greater research is also being done into suppliers’ terms of reference, with 23% of businesses now insist on seeing the supplier’s green credentials and carrying out internet searches on their green credentials (41%).

Accreditation is also high on the checklist, with 35% requesting evidence of a suppliers’ green accreditation from reputable bodies such as the Federation of Small Business or internationally recognised bodies (35%). Word of mouth remains a powerful research tool for the business community with 33% saying they would consult with network contacts about suppliers sustainability attitudes, while 29% would also request green references.

Businesses are also placing increasing importance on sourcing material responsibly, with 45% of businesses’ citing this as key evidence of their record on sustainability.

Regional Insight

There are notable differences in the requirements placed on suppliers by region.

Businesses based in the North East are more likely to focus on internet searches for green credentials (48%) and signs of green accreditation when evaluating supplier credentials.

London based business focus more in website research and reviewing supplier’s attitudes and intentions when it comes to carbon neutrality (42%).

North East based businesses place more importance in a business’s mission statement (43%) when evaluating whether to partner with a supplier.

Joanna Morris, Head of Marketing and Insight at Novuna Business Finance commented: “It is evident through the research that Small Businesses are changing the way they select the suppliers to work with and are actively seeking out suppliers who care about the environment and are working to reduce carbon emissions. This is an encouraging and welcome trend and proves that businesses place great important on building relationship with suppliers who share the same commitment to being eco- friendly. Novuna Business Finance are here to help support businesses so that they are in the best position to be able to sustain and build on those relationships in the future.”