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Businesses feel the heat of ‘Green burden’

Phil McVan, Urban Wind
Phil McVan, managing director of Urban Wind

Britain’s struggling small businesses are facing a growing ‘Green Burden’ imposed by large companies striving to meet their carbon reduction targets, says Urban Wind

A new report from the Glasgow-based renewable energy installer has revealed businesses are feeling the heat as large companies cascade the responsibility right down the supply chain – increasing the business opportunities for installers.

Smaller operations are being told by the major companies they supply of the pressing need for them to embrace the ‘green agenda’ and switch to renewables or possibly lose their place on that supply chain.

Urban Wind’s report, ‘Corporate Social Responsibility and Sustainability – An Insight’ revealed the pressure to go green isn’t just coming from legislation, but from major corporate organisations putting Corporate Social Responsibility (CSR) policies ever-more central to their operations.

This has an increasing cost and resource implication for SMEs, as the ‘triple bottomline’ becomes an increasing priority for FTSE 100 companies and other blue chip businesses.

For instance, food sector business Bernard Matthews is set to hit its deadline for becoming an energy neutral business three years ahead of target, bosses have predicted.

It has been developing a pioneering partnership with renewable energy developers, securing £90million of third party investment to utilise the land it owns to house solar and wind farms.

It’s a corporate trend that Urban Wind sees developing, according to its research data, with companies such as BT and Tesco following similar paths.

Phil McVan, managing director of Urban Wind, said: “There is no doubt this pressure will remain on businesses – with continuing investigations and demands growing on the supply chain. The need for organisations to reduce their carbon footprints is paramount to CSR.

“This is being driven by both legislation and climate change policies externally, as well as shareholder and consumer pressure internally.

“Our research shows that rising numbers of larger companies are looking to buy and use green energy – and to show clearly how they are reducing their carbon impact on the environment and meeting their own targets.

“As a result, they are passing that green burden right down the supply chain – with smaller operations being told by the major companies they supply of the pressing need for them to embrace the ‘green agenda’ and switch to renewables or possibly lose their place on that supply chain.

“We are seeing more and more examples of the demands facing suppliers, no matter how green they may already appear to be.

“However, responding to all this pressure is not just a question of putting up a wind turbine next to a factory or office and saying ‘look at us, we’re green!’

“Issues include where did the turbine come from – where was it made and from what materials? Was it shipped halfway across the world, with the impact that had on carbon emissions?

“The same applies to biomass – where is the material coming from to burn in the boilers, how sustainable is it? Clearly if it is being sent down the road on convoys of lorries, things are not as green as they seem.”

He predicted: “Embedded generation’ is going to play a growing part in energy production. ‘Local’ and ‘sustainable’ will go hand in hand for businesses and their supply chains, as well as for communities as well.”

‘Embedded generation’ is where local power generation sources, such as on-site wind turbines or biomass plants, are used to generate electricity for an adjacent plant or site or nearby buildings.

This then enables these businesses and premises to come ‘off-grid’, reducing reliance on the old-style and ageing national grid infrastructure, as Britain moves back towards a more locally-based power generation model, according to Urban Wind’s research.