2 minute read
NatWest: Green is the colour
Green is the colour
How brokers can support carbon reduction opportunities
Dave Furnival Head of Broker NatWest
In 2021, in-depth analysis of the UK SME landscape by NatWest found that small and medium-sized enterprises have the potential to unlock significant revenue growth from climate action. To help deliver on the UK’s carbon reduction ambition, though, the Springboard to Sustainable Recovery report said SMEs must have access to funding.
As SMEs consider their sustainable investment strategy for 2022 – from improving buildings’ emissions and insulation to switching to electric vehicles or renewable power – they will be seeking specific financing options from their local broker.
There is significant opportunity to add value here by providing customers with the targeted support they need to realise their net zero ambitions. There is a chance for brokers to think more holistically as we enter the net zero era. Those that understand the customer’s green requirements and convert them into a relevant debt package will not only provide solutions for ambitious SMEs, they will also be future-proofing their own business by becoming part of the ecosystem.
Some business customers will know how they want to recover from the pandemic and invest to grow and become more sustainable. In the agriculture sector, for example, a farmer might be looking to invest in vertical farming, wind power turbines, electric motor tractors or biomass boilers. The green energy credentials and bespoke asset finance capabilities of lenders will be hugely important here.
Other customers might be searching for support on relevant financing options to help them step into green growth opportunities. Brokers with the knowledge and understanding of this evolving market will be well placed to help SMEs join the green transition and deliver climate action.
Part of the UK innovation strategy is to ensure ambitious growth businesses can access the right private finance. The government wants to see a surge of business-led investment and now is a great time to be thinking about investing.
Sole traders and partnerships can look to take advantage of the Annual Investment Allowance, which is currently set at £1 million and is in place until 31st March 2023. And the super-deduction means companies investing in qualifying new plant and machinery assets will be able to offset expenditure against taxable profits.
The finance community has a crucial part to play in creating a more resilient world. That is why NatWest has pledged £100 billion of climate and sustainable funding by 2025 to support the investment the UK needs.
There could be significant further demand for funding throughout 2022 as businesses seek to move on from the pandemic and transition to a new net zero economy. Brokers will continue to play a key role in supporting SMEs towards a sustainable recovery.
