The pandemic has impacted businesses of all sizes, but in many ways, SMEs have found themselves enduring the worst of the economic fallout.
Supply chains have been disrupted and workplaces closed or, at best, radically transformed, and many customers have disappeared – some only temporarily, others permanently. Nevertheless, the crisis is demonstrating that there are opportunities for those who can seize them.
Michael Lewis, CEO at E.ON UK explains that one of the greatest opportunities lies in responding to the growing focus from the public and from politicians on ensuring the rebound from the Covid-19 crisis is as sustainable as possible – as the slogan goes, ‘build back better, build back greener, build back faster’
Claims that consumers want sustainable products and services are hardly new. However, good intentions aside, there is growing evidence that we, the consumers, are finally following up with our wallets.
E.ON’s own research published today shows the pandemic has radically changed consumer purchasing habits and that concerns about the environment are becoming more important in persuading people what to buy – and who to buy it from.
More than a third of Brits told us that, since the pandemic struck, they have started to buy more products and services from companies with strong environmental credentials. The increase was most noticeable in London where more than half told us they’d changed their habits in this way.
Consumers are willing to pay a premium, too. A third have knowingly paid more for greener products and services since the start of lockdown and more than half think the environmental credentials of a product or service are now just as important as the price they pay for it.
On average, consumers reported they are willing to pay 3% more for goods that are sustainable, with the food and drink the sector that consumers are most likely to demand sustainability in. Based on the average yearly turnover of an SME – which is £370,000 according to government figures – this increase could be worth as much as £11,100 a year to annual earnings.
Being more sustainable, then, makes good business sense. Consumers are increasingly buying sustainable products and services from companies that are demonstrating environmentally-friendly credentials. If your company is making green decisions, consumers are likely to reward you.
So, what practical steps can businesses take to seize this opportunity?
Becoming more sustainable can sound great in theory but many SMEs are lost on how to start that journey. There is, however, plenty of accessible advice available. For example, the Federation of Small Businesses has some great suggestions on how small firms can start to reduce their environmental footprints.
Doing so doesn’t need to come at with added cost. From cutting out plastic and going paperless to installing LED lighting and electric vehicle charge points, there are many ways in which SMEs can support the green economic recovery without breaking the bank. In addition, E.ON provides 100% renewable electricity at no extra cost to all small businesses when they join or renew with us.
Whatever measures a business chooses it’s imperative the steps taken are communicated to customers. Our report found that although the overwhelming majority of consumers now carry out research to find out whether a business’ products, policies or services are environmentally-friendly, nearly half think information is hard to find. Where they are able to find what they were looking for, the most common source of information is a company’s website, followed by social media and product packaging – so these are key channels for SMEs to prioritise.
The COVID-19 crisis is demonstrating that there are commercial opportunities for businesses who can seize them. SMEs that listen to their consumers and take advantage of the green economic recovery will prove successful. And by responding quickly and flexibly, not only can businesses benefit financially, they can also contribute to a more climate-conscious Britain.