HSBC announced the launch of a £500m Green SME Fund as part of its commitment to support businesses of all sizes to transition and thrive in a low carbon economy at COP26 in Glasgow on Friday.  SME businesses have largely been excluded from sustainable support with the focus being on larger corporations, this fund seeks to change that. 

In our Entrepreneurial team at Harper Macleod we work with many SME and high growth businesses focusing on ESG (“environmental, social, governance”) and green principles.  This new fund will hopefully aid these businesses in reaching their green potential.  

I attended the Net Zero Scottish EDGE award at COP26 last week.  In Sir Tom Hunter’s opening speech he remarked that “to be an entrepreneur you need to be an optimist and take action; two attributes we need to win the war against climate change.”  He discussed how innovation is the only way the world can reach net zero.  It is these entrepreneurs and their high growth businesses that we work with here at Harper Macleod that can bring this innovation required to tackle climate change and help us achieve net zero. 

It is clear from the findings noted in the article that all businesses are feeling the pressure of sustainability but there are barriers preventing them achieving this within their business, as only 23% of businesses are measuring environmental metrics.  HSBC findings note that the main barrier to this is cost.  

We are seeing more and more investors requesting ESG principles to be included in the company’s constitutional documentation to ensure the company adheres to these obligations throughout its life cycle and as a condition of the investment.  We have also seen a sharp increase in businesses updating their constitutional documentation to ensure they meet the test for B-Corporation eligibility. 

COP26 has certainly put Glasgow in the spotlight in relation to net zero and sustainability, but we have seen these principles being embedded in company culture and documentation of the businesses we work with over the last few years, with a dramatic increase over the last 12 months. 

ESG are now key principles in business whether that is in order to obtain investment, access funding, B-Corporation status or assist in the drive to net zero.  Either way, this is the new norm for business which can only be a positive for society as a whole.