Mastercard has revealed that small businesses in the UK want to be more sustainable and are embracing new technologies to try and achieve this. However, due to rising costs, over half (56 per cent) are struggling to meet these goals.
The drive from young people for greater sustainability from their financial institutions is being heard as Mastercard finds that 51 per cent have stated sustainable practices are a top priority. This figure is even greater when looking at younger business owners aged 18 – 34. Seventy per cent marked it as an important factor.
Small and medium enterprises (SMEs) make up 99.9 per cent of the UK business population, so theoretically the country should be making good pace to reach its net zero goals. In reality, though, rising costs are creating new hurdles which are making the sustainability goals harder to achieve. Businesses need to be provided with adequate support and an understanding of the importance of sustainable practices.
When looking at the bigger picture, for every two steps forward businesses take to achieve net zero, it seems they take one step back. Mastercard finds that while 63 per cent of SMEs are using tech to reduce their environmental footprint, like decreasing their reliance on paper, 48 per cent state that costs are stopping them from adopting less damaging tech.
Kelly Devine, division president, UK and Ireland at Mastercard, comments: “When you run a small business, you don’t have teams of people who can help you navigate AI, net zero and cybersecurity – you’re in charge of sales, IT and sustainability every day. Big businesses need to help wherever they can. Through our Strive UK programme, we’re connecting small businesses to experts and advisers who can help them grow, build resilience and tackle some of the biggest challenges head-on.”
The emergence of generative artificial intelligence (AI) has taken the world by storm and the UK is no different. Eleven per cent of UK SMEs are already using the tech with a further 31 per cent likely to adopt it in the future. However, this is not a unanimous feeling.
Forty per cent of businesses want digital tools but do not understand how they work and as a result, which would be best for them. Similarly, 35 per cent say they cannot keep pace with tech developments.
Meanwhile, 28 per cent view AI as a threat to their business stating it could reduce their need.
Worryingly, only a quarter (26 per cent) of small businesses say they’ve invested in cybersecurity software. This leaves many open to potential attacks by criminals.
Mental health is taking its toll
In a post-pandemic world, more and more people have come forward to discuss their mental health, both from a general and financial standpoint. Over half of young entrepreneurs told Mastercard that running a business has impacted their health. In fact, 55 per cent of 18 – 34-year-olds said the stress of running a business over the past 18 months has negatively impacted their mental health, compared to 30 per cent across all age groups.
Despite this, small businesses overall are feeling more optimistic compared to a year ago. The number of small business owners who’ve never felt more negative about their business’ future has decreased. There used to be one in four (26 per cent) in October 2022. Now, there is one in five (20 per cent).
Retail expert and chair of the Better Business Act, Mary Portas, comments: “Right now, the conversation around sustainability is understandably dominated by larger businesses, with more and more sticking their head above the parapet to commit to net zero goals and push for change. And rightfully so – this is a conversation we need to have.
“But a fundamental part of the UK’s business population is being underestimated: micro and small businesses. They provide three-fifths of the nation’s jobs and account for half the turnover in the private sector. Combined, they have huge clout. Indeed, the commitment to sustainability by many individuals is brilliant.
“But this counts for nothing if they aren’t supported to achieve their net zero goals. This is a group that accounts for 99 per cent of the country’s businesses – if they don’t hit their targets, none of us will.”