More than eight in 10 small businesses (88%) say there are areas of sustainability that are more important to them at the start of 2025 than they were a year ago – but many cite financial obstacles to fully achieving these goals, according to new 2025 research by Novuna Business Finance.
Between Christmas and New Year, Novuna Business Finance asked a representative sample of 255 small business owners which areas of sustainability had become more important to their enterprise than it was a year ago. Topping the list of findings was reviewing the energy usage – with many businesses intent to review their water use, heating and possibilities for making greater use of renewable energy. Other top green considerations included switching to greener forms of transport (29%) and investing in new equipment and sustainable infrastructure (18%).
Beyond green and Net Zero issues, many small businesses see sustainability in the broadest sense. Nationally, 27% of small businesses said that improving working conditions and contracts for all employees (treating employees fairly) was more important to them than it was a year ago. Other sustainability issues rated more important for 2025 included: Creating jobs locally (32%), investing in local suppliers/contractors (16%) and having a positive social impact in my immediate community (27%).
Whilst the depth and range of sustainability goals prioritised for 2025 was significant, many small businesses also voiced concerns over the obstacles to achieving them. The top obstacles to investing in sustainable initiatives in 2025 included: Paying for high energy costs (55%), coping with rising fuel costs (47%), the prosect of rising inflation/interest rates (40%) and the economic impact of Government policies (i.e. budget changes to National Insurance) (48%).
More broadly, more than seven in 10 small businesses (77%) said they were also fearful on how the Trump presidency could have a ripple effect and adversely impact the outlook for UK small businesses in 2025 and beyond. More than one in four small businesses (26%) feared the prospect of the new US administration placing less importance on climate change and the need for businesses to do their bit to work towards Net Zero targets. The possibility of increased market volatility impacting the UK was also a major concern and on two counts: 33% were concerned about the impact on UK economic growth forecasts and interest rates, whilst 22% feared the impact on their own trading relationships.
Regional findings
Around the UK, the commitment of small businesses to sustainability for 2025 is particularly strong in the East Midlands, West Midlands and in the North – the very regions that reported quarter on quarter increases in growth forecasts during 2024 [see notes to editors]. This suggests a possible correlation between businesses that are growing and those that invest in sustainability as part of their strategic planning.
The opposite could be said for Wales, where small businesses placed less importance on many sustainable initiatives factors and are consistently below the national averages.
Jo Morris Head of Insight at Novuna Business Finance commented: “It is positive to see so many small businesses starting 2025 with a positive commitment to sustainable projects and for the vast majority to rate sustainability as more important than it was a year ago. This suggests that UK small businesses are not following external trends on these issues, rather they have their own sense of the important role that responsible businesses can play in positively supporting climate action, looking after staff, being financially resilient and to positively make a difference in the local community. Small businesses are doing more than attempting to be green in 2025 – they are true leaders in the sense that they are actively engaging with sustainability in the full meaning of the word. We will share more small business stories on sustainability through our podcast this year – a project that shines a light on inspiring small business success stories from around the UK.”
Regional growth plans for West Midlands and North through 2024
|
Q4 2024 (Oct-Dec) |
Q3 2024 (July-Sep) |
Q2 2024 (Apr- Jun) |
This time last year (Q4 2023) |
|
| West Midlands |
40% |
32% |
29% |
27% |
| East Midlands |
37% |
32% |
24% |
16% |
| North East |
36% |
31% |
19% |
30% |
| North West |
34% |
26% |
23% |
30% |
About Novuna
Novuna is a trading style of Mitsubishi HC Capital UK PLC, a leading financial services company, authorised and regulated by the Financial Conduct Authority (FCA). We have over 2,250 employees, £8.2bn of net earning assets and over 1.3 million customers across five business divisions; Novuna Consumer Finance, Novuna Vehicle Solutions, Novuna Business Finance, Novuna Business Cash Flow and our European division specialising in Vendor Finance providing innovative finance solutions to enable consumers and businesses to grow and prosper.
We are a wholly owned subsidiary of Mitsubishi HC Capital Inc., strengthening our relationship with one of the world’s largest and most diversified financial groups, with over 11trn yen (£57bn) of assets.
Novuna Business Finance
Novuna Business Finance provides business finance to SMEs and bigger corporations across the UK. This includes asset finance, stocking, block discounting and sustainable project finance provided through brokers, vendor organisations, manufacturers and direct to the business community. With an asset portfolio of more than £1.8bn, the business is active across multiple sectors from transport and agriculture to construction and manufacturing and was awarded Best Service from an Asset Based Finance Provider at the 2024 Business Moneyfacts Awards. The business’ Sustainable Project Finance team is also supporting the development and construction of sustainable energy and transport projects, which are critical to the decarbonisation of the UK’s infrastructure. Novuna Business Finance is a trading style of Mitsubishi HC Capital UK PLC, part of Mitsubishi HC Capital Inc., one of the world’s largest and most diversified financial groups, with over 11trn yen (£57bn) of assets.
