Letters: SMEs need cash for climate
[Re: Small businesses look to Cop26 for fiscal support, 2nd November]
The Federation of Small Business (FSB) report stated SMEs want more financial support and policy to help them become more sustainable. We agree, but financial products that marry both commercial competitiveness and ESG-related benefits have not been forthcoming. Not addressing this could derail the 2050 Net Zero target.
While the FSB has urged the government to issue green spending vouchers and set up a scrappage scheme, financial institutions supporting SMEs have proposed two green finance measures to HM Treasury which would provide the right incentives to encourage all stakeholders.
One, a government-backed guarantee administered through the British Business Bank in a similar manner to the Coronavirus Business Interruption Loan Scheme, in respect of eligible commercial ESG-related lending to small businesses. And two, a £1bn ESG Lending Pool of capital to be run by the Better Business Bureau, that is match-funded by institutional private capital, for lenders to originate loans for ESG-related purposes.
The loans would stimulate increased commercial investment in SMEs adopting ESG-related projects, policies and procedures while the lending pool would make affordable funding available for those businesses, simultaneously stimulating pension funds and other larger funders to provide capital and encouraging alternative lenders to reconsider their own ESG credentials.
Simon Cureton