Is your business environmentally sustainable? Why going green can improve your bottom line
For business owners, sustainability might have been something viewed as a nice-to-have or a PR exercise in the past, but because the regulatory landscape is changing fast, businesses that do not get ahead of these changes risk being left behind.
Businesses, whether large corporations or small and medium-sized enterprises (SMEs), will need to prove they are reducing their environmental impact.
How can businesses turn sustainability into a competitive advantage rather than a compliance headache?
Understanding the new environmental regulations
The UK is introducing a range of stricter environmental regulations this year that will impact businesses of all sizes.
These changes aim to drive greater accountability, transparency, and action on sustainability. Here are the key regulations businesses need to be aware of:
- Simpler recycling legislation – By 31 March 2025, businesses in England must separate recyclable waste streams, including glass, metal, plastic, paper, and food waste. Smaller businesses with fewer than ten employees have until 2027 to comply
- Extended producer responsibility (EPR) – Set for October 2025, this regulation places financial responsibility on producers for the entire lifecycle of household packaging, encouraging more sustainable packaging solutions.
- Zero Emission Vehicle (ZEV) mandate – A phased introduction of electric vehicle sales targets is underway, aligning with the UK’s commitment to phasing out petrol and diesel car sales by 2030. If you are considering making amendments to your fleet in light of these expected changes, please contact us today for advice on tax and other financial implications.
Businesses must ensure compliance, avoiding potential penalties and reputational damage while making the most of the opportunities these regulations present.
The Plastic Packaging Tax
In addition to the above regulations, the Plastic Packaging Tax, which was introduced in April 2022, saw a rate increase to £217.85 per tonne in April 2024.
This tax needs to be paid by businesses who have manufactured or imported plastic packaging components which contain less than 30 per cent recycled plastic.
The cost of environmental sustainability inaction
Some business owners still see sustainability as an extra burden rather than a business driver. Those who don’t act in the near future could soon find themselves at a disadvantage.
Think about supply chains. If your business is part of a larger supply chain, your clients may start demanding evidence of your sustainability credentials.
Larger firms are already being held accountable for their suppliers’ emissions, which means they will be looking at who they work with.
If you are not compliant, you could lose contracts.
Banks and lenders are also factoring sustainability into their lending decisions. Green finance used to be a niche product, but now it is more mainstream.
Businesses with strong sustainability strategies will have easier access to funding and better terms. Those without may struggle.
Turning sustainability compliance into a business opportunity
The businesses that thrive in the next five to 10 years will be those that see sustainability as an opportunity rather than a burden.
Upgrading to energy-efficient equipment, investing in smart building technologies, and reducing waste will both help the environment and improve your bottom line.
A recent study by Deloitte showed that over 60 per cent of consumers prefer to buy from sustainable brands.
Businesses that demonstrate a genuine commitment to sustainability will attract and retain more customers.
In terms of recruitment, younger workers, in particular, want to work for companies that match their values.
Businesses that do not take sustainability seriously risk losing top talent.
As industries evolve, sustainability can give you an innovative edge over your competitors and help you stand out as a leader in your sector.
Practical steps for businesses to improve environmental sustainability
If you are wondering where to start, here are a few practical steps:
- Conduct a sustainability audit – Assess your current environmental impact and identify areas for improvement.
- Set measurable targets – set realistic, trackable goals, such as reducing waste, cutting emissions, or improving energy efficiency.
- Invest in green technology – Look at renewable energy, electric vehicle fleets, and carbon offsetting initiatives.
- Engage employees – Sustainability needs to be embedded into company culture. Get staff involved in green initiatives.
- Using Government incentives – There are tax breaks and grants available for businesses investing in sustainability. Make sure you’re taking advantage of them
With regulations tightening, it is clear that sustainability is no passing trend. The businesses that see this as a strategic priority, not just a compliance issue, will be the ones that thrive.
Start making changes now before the regulations force your hand. For more information and advice on the sustainability practices of your business, please contact us today.
