Report shows slowdown in firms adopting green growth

A new study by East Midlands Chamber and the University of Derby has detected a slowdown in the number of businesses in the region adopting green growth strategies.

Cost pressures have been blamed for the fall – but the annual joint study by the chamber and the university’s Derby Business School, called Green Growth Trends, found that green growth activity had still doubled since 2015.

The research found the proportion of businesses across Derbyshire, Leicestershire and Nottinghamshire that have made any income from environmentally-friendly goods and services dropped from 45% in 2022 to 36% in 2023.

Despite the drop, this still represents a significant increase on the 16% that reported they derived turnover from goods such as energy efficiency, waste recovery, and eco-food and drink products in 2015, as the business community has increasingly identified opportunities in the UK’s race to net zero.

The research provides the evidence base that informs East Midlands Chamber’s Sustainable East Midlands initiative, which was launched in 2020 to support businesses in engaging with the green agenda.

Chris Hobson, director of policy and insight at the chamber, said: “The drop-off in green growth engagement among East Midlands businesses over the past year can in part be attributed to the ongoing cost-of-doing-business crisis, in which firms have been hit by once-in-a-generation cost pressures across energy, fuel, raw materials and people.

“But this year’s findings have also identified that fewer companies believe the current policy landscape allows them to fully engage with green growth, perhaps the result of mixed messaging from different parts of government over recent months around the importance of net zero policy.

“The big picture direction of travel, though, is clear. As net zero increasingly forms the bedrock of our national economic strategy the nearer we get to 2050, the more businesses will identify opportunities for growth that has a positive, rather than detrimental, impact on our environment.”

Dr Polina Baranova, associate professor of strategy and sustainability at Derby Business School, co-authored the report with Dr Fred Paterson, the university’s lead for sustainable business and clean growth.

She said: “This analysis could indicate that the green gains we experienced during the pandemic are starting to fizzle out and businesses are reverting to the conventional, non-green operations and strategies.

“It illustrates the fragility of green growth in the face of economic adversities and how companies of different sizes and sectors are affected differently.

“Net zero does not just make environmental sense, but good business sense, and we now need to see leadership from government to reverse the slowdown in progress if the UK is to be at the forefront globally of the new green economy.”

Dr Baranova will discuss the findings in more detail at East Midlands Chamber’s Sustainability Summit, which will take place at Reach Events on 20 September.

To book a free place visit https://www.emc-dnl.co.uk/events/sustainability_summit_2023_unlocking_the_economic_benefits_of_green_growth_for_smes_and_the_east_mi1335554269/ .