Insights for businesses

Great strides have been taken for the protection of the environment over the past 50 years. The UK government’s 25-year plan for environmental improvement points to examples of success such as the removal of ozone-depleting substances and reduction of greenhouse gas emissions. Still, there’s shared recognition that much more will have to be done for the achievement of the net zero target by 2050.

​​The UK’s businesses, particularly in the agricultural, construction and transportation industries, will have a key role to play in the achievement of aims such as improving air quality, helping plants and wildlife to thrive, and making efficient use of natural resources over the next 25 years. ​​

With 2.3 million small businesses claiming to be starting their greener journey*, while just under 10% of SMEs claim to have already gone green, there’s a clear desire for more sustainable business practices across the nation.​​

​​​For the businesses that have yet to start, there’s support available to help begin the process. ​​​​​​​​​We’ll look at such support in this complete review of ​sustainability​ initiatives and​ schemes​.​​

UK-wide Government-led initiatives

Appreciating the required scale of change, the UK government has pledged almost £5 billion to support UK businesses in becoming greener. These funds are available to businesses that invest in eco-friendly technologies for energy efficiency gains and carbon footprint reductions.

Details of the green business grants are shared on the UK government website and it’s advisable to check the eligibility requirements before applying.

The government-funded sustainability schemes include:

  • Enhanced Capital Allowances - allowing businesses to write off the costs of investment in plant and machinery included on the Energy Technology List against taxable profits in the year of purchase.
  • Research and Development Tax Relief - a government reward for business investment in the innovation of products, processes, or services. This may be received as a cash payment and/or Corporation Tax reduction.
  • Green Business Fund Grants - offered to small and medium-sized businesses as a reward for the installation of new products and equipment that reduce greenhouse gas emissions.



Green business grants across agriculture and construction

More specifically, the government has introduced grants for sustainability projects across such sectors as construction and agriculture. As an example, a £440m fund was pledged in 2021 for green construction projects such as the development of plants for the supply of sustainable aviation fuel.

Grants have also been offered for the retrofitting of buildings with energy-efficient technologies. And there’s been a further investment of £120m into industry-led research and development of agriculture and horticulture since 2021.

These schemes have been set up for the funding of eco-friendly construction and agriculture projects:

Farmer tending tree
  • Energy Savings Trust - introduced with the aim of minimising harmful environmental change, this government organisation offers grants and subsidies to cover the costs of energy-efficient home improvements.
  • Social Housing Decarbonisation Fund - receiving a share of the government-pledged £1.4 billion in 2023, this fund is available for eco-friendly property improvements such as the fitting of solar panels, heat pumps, and insulation. It is offered to public sector bodies such as local authorities, schools, and hospitals.
  • Funding Innovation Programme - introduced for the financing of new farming products and services which will increase productivity, sustainability, and resilience in the aim of achieving net zero.


Information about the range of green business grants is shared on the website, including application criteria. The government has also introduced a range of support programs and advisory services for businesses planning on adopting greener practices.

These include the Green Growth Hub, Net Zero Support Fund, and Sustainable Procurement Program. Alternative sustainable funding is available through the UK’s local councils and banks.

SME loan scheme

To support the installation of energy-efficient business tools and systems, such as heat pumps, the Scottish government offers small businesses the chance to apply for up to £100k worth of loans.

The loan must be used solely on energy-saving measures, which can range from the likes of more efficient LED lighting to improving insulation.

Smart Export Guarantee (SEG)

Just like with residential homes, businesses are able to contribute to the national power grid under the SEG.

In doing so, the grid gives money back to businesses to help them lower their overall energy cost. All businesses are entitled to this guarantee provided their energy supplier is an SEG licensee.

Local council grants

Across the UK, councils will offer varying levels of government-backed support to businesses hoping to go green. These are available in the form of funding or grants, but some councils may only have a certain amount of funding to give each year.

How we’ve helped businesses go green

Aldermore stands out in the support of mighty businesses who are going green. This support is reflected in our arrangement of a multi-million-pound loan to refinance the development and refurbishment of an office building in central Darlington. The fitting of LED lighting and removal of fossil fuel-reliant systems were key to the building being given an Energy Performance Certificate (EPC) rating of “A”. We have also provided £8.4m for an ultra-low-carbon development in Sheffield.

Whether you’re interested in a specific sustainability grant or want further information about the business financing options, you can count on Aldermore.

*Source: Research conducted by Opinium on behalf of Aldermore between 24 October – 08 November 2023 of 1,000 SME Senior Decision Makers.

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