Knowledge Centre

1.1 Use green credentials as a market differentiator.

Increasingly, small businesses are using their green credentials as a selling point to attract customers.

Numbers of environmentally-minded and ethically concerned consumers are growing. For example, retail sales of organic food are now worth around £1.2 billion per year and opportunities are increasing.

Many consumers are prepared to pay a premium price for goods from a green or ethical business.

1.2 Attract green lenders and investors.

Increasing numbers of investors and lenders are attracted to businesses that have green or ethical policies in place.

Establishing your commitment to green issues can protect your firm from the effects of any future environmental legislation.

Lenders and investors are known to prefer businesses that show strong environmental controls and commitment, which lowers the risk of environmental problems at work that could increase your costs or damage your reputation.

Specialist loans are available for businesses buying and sourcing environmentally sustainable technologies.

1.3 Claim tax breaks and investigate soft loans.

Investing in energy-saving or water conservation equipment qualifies for 100 per cent first-year capital allowances. This means you can off-set the entire cost of new plant and machinery against your taxable profit and improve cashflow.

Eligible products include:

Include all claims as part of your normal tax return.

You should keep copies of invoices, dated screen prints from the HM Revenue & Customs (HMRC) Enhanced Capital Allowance (ECA) website, transport costs of the equipment and paperwork from the company that installs the equipment.

Buying low-emission company cars and vans also qualifies for 100 per cent first-year capital allowances. Low-emission vehicles also qualify for reduced or zero rates of road tax (vehicle excise duty) and discounts on company car tax.

Sourcing energy from green suppliers qualifies you for tax relief on the Climate Change Levy.

The Carbon Trust offers SMEs interest-free loans of between £5,000 and £100,000 to replace or upgrade equipment with more energy-efficient versions.

Check private or local-authority environmental grant schemes for subsidised ways to update your machinery and equipment.

• automatic monitoring and targeting equipment for energy at work
• boiler equipment
• combined heat and power machinery
• Heating, ventilation and air-conditioning controls
• pipework insulation and refrigeration equipment
• solar screens and heating systems

1.4 Lower your day-to-day running costs.

Energy-saving or eco-friendly equipment will lower your energy bills.

Eco-friendly water-saving equipment will lower your water rates.

The savings you may make on utility bills might justify replacing old equipment immediately.

Green suppliers can offer you up-to-date advice on new technology and equipment that will further increase the amount you save.

The Carbon Trust offers advice to help you find ways to reduce the energy you use at work. If you spend more than £50,000 a year on energy, you may also qualify for a free survey.

Envirowise offers publications and advice on improving resource efficiency and reducing waste throughout your business.

1.5 Lower your equipment costs.

Use a reuse network, such as Freecycle, to get office equipment free (see section 3.5).

1.6 Boost marketing with green credentials.

If you source green or ethical raw materials, business supplies, finished goods or equipment, you may be able to claim some 'green' status for your own business.

However, 2007 research (Mori) shows that almost 80 per cent of consumers believe companies need to back up their ethical claims with proof. You may be able to use appropriate labelling and advertising for your goods and services to provide this.

While there is no single 'gold' standard, a wide range of accreditation schemes exists for businesses and their products and services.

Most codes set strict criteria.

Consider the types of accreditation that will appeal to your staff and customers before you apply for a scheme.

Ask your trade association for details of accreditation schemes in your sector.

Include environmental information in your annual business reviews that details measurable achievements as far as possible.

2.1 Survey your business purchases.

Set aside time and resources to assess your existing business purchases. Include raw materials; stock; packaging; the utilities you use in your business processes; plant machinery and equipment; business supplies; and the delivery of your goods or services.

2.2 Assess your raw materials and stock.

Where do you source raw materials and stock from?

Do they come from suppliers with a good environmental reputation?

Do they come from a sustainable, ethical, organic or green source?

How far do they have to travel to reach you?

Do they contain any toxins or dangerous chemicals?

2.3 Check the packaging you use.

Does it come from a recycled or sustainable source?

How far does it travel to reach you?

Could you use less or return it to the supplier for reuse and so reduce how much you order?

2.4 Look at the energy and water you use.

What types of energy do you use?

How much energy and water are you using?

How much do you spend each year? SMEs spend, on average, 8.3 per cent of their turnover on energy.

Do you buy energy from a sustainable supply?

2.5 Assess your plant, machinery and equipment.

Is it made from recycled or sustainable materials?

Is it energy- and water- efficient?

Could you replace any toxic materials with environmentally-friendly alternatives?

2.6 Consider your business and premises supplies.

Is your stationery recycled?

Are envelopes reusable?

Are batteries rechargeable?

Could you reduce power consumption levels of your computers, printers. fax machines and photocopiers?

Are they fitted with power-save features?

Is the office lit with energy-saving light bulbs? Are cleaning products environmentally friendly?

Do kitchen and bathroom appliances have a European Union Energy Rating of A or B?

Are your tea and coffee supplies from an ethical or Fairtrade source?

2.7 Examine how your products or services are delivered.

Do you use local suppliers where possible?

What means of transport systems are routinely used by suppliers?

Do you have a green travel plan in place at your premises?

2.8 Check how your suppliers dispose of waste.

Consider the entire lifecycle of your product or service; avoiding and minimising waste and pollution is a key part of any green commitment. Paper, cardboard, glass, textiles, metals, wood and cooking oil are common materials that can usually be recycled.

Do suppliers reuse or return packaging used to deliver supplies?

Do they offer a recycling or refilling service, such as refilling printer cartridges?

Waste electrical and electronic equipment must be recycled. Equipment producers offer recycling schemes.

Do they minimise waste disposal and use landfill only as a last resort?

2.9 Look at your business finances.

Are your banking, investments, pension schemes and commercial mortgages ethical?

3.1 Start with the basics.

Make sure you have management, buyer and staff commitment to the project. Allot adequate skills and resources for the job in each department.

Where possible, try and reduce the amount of raw materials, packaging, energy, water and equipment you buy. Reducing the size of your order means reducing the amount of natural resources you use.

Encouraging an energy-saving culture at work - asking staff to turn off lights, for instance - means you buy less energy.

Choose good-quality products that last longer.

Don't buy goods that actively damage the environment - for example, non-rechargeable batteries and petrol-fuelled cars.

If you are using raw materials that are not sustainable, consider substituting them for a recycled or sustainable alternative.

There is no definitive list of green or ethical manufacturers, retailers and producers. Ask your suppliers if they have any green accreditation or certification (see section 3.2).

If you can't find an accredited supplier, ask for information about their environmental or ethical working practice (see section 3.3).

Consider alternative suppliers, such as reuse networks or waste programmes (see section 3.4).

3.2 Find accredited suppliers.

There is no authoritative way to compare the advantages of the many labelling schemes; there is no single standard and some are better than others.

Choose the suppliers that suit your own needs best and those with criteria that will appeal most to your customers.

Suppliers who have installed and maintain an environmental management system to high standards and publicly report on their achievements may be accredited by the Standard ISO 14001 or EMAS

Respected organisation Ethical Consumer produces green and ethical ratings for a wide range of products and companies. Accredited businesses include office and business suppliers.

The Ethical Company Organisation runs an accreditation scheme for ethical companies and brands and promotes them in the Good Shopping Guide.

The British Association for Fair Trade Shops (BAFTS) is a network of independent fair trade shops across the UK. Find Fair trade wholesalers on the BAFTS website

If you source goods from abroad, consider these labelling schemes; the Global Ecolabelling Network; the European Ecolabel scheme; the US composting scheme for biodegradable goods from the US Biodegradable Products Institute; Canada's respected environmental ChoiceM programme, the EcoLogoM certification mark; the US scheme Fair Trade CertifiedTM, equivalent to the UK's scheme; IFAT, the worldwide federation of Fairtrade agencies; and the influential Global Organic Textile Standard.

In the US, a certification scheme called SA 8000 rewards manufacturers with good labour practices.

Contact your trade association for accredited suppliers in your sector.

3.3 Find information on your suppliers.

Read your supplier's annual report. Many companies publish environmental or ethical information about their working practices; large companies must do this.

Even if your suppliers are not officially accredited, you can still apply basic green criteria to your purchasing decisions.

Where possible, use local suppliers. Find out if your suppliers employ local people and use local services and suppliers themselves.

Ask if they reduce and recycle waste above and beyond their legal obligations.

Make sure the goods you buy arrive with as little packaging as possible. Check for the recycling packaging sign.

Check the goods are, where possible, biodegradable or compostable.

Ask how much water, power and fuel have been used to make the goods, and if they are energy-efficient products.

Ask if the goods can be recycled or if they have been made with recycled components. For instance, see if any old equipment your suppliers collect from you is being reused.

Find out if the goods have been made with reduced chemical or toxic content.

3.4 Ask your suppliers to improve their ethical or environmental performance.

While SMEs may not have the resources and market power of larger companies, their closer relationship with fewer suppliers may make it easier to ask their existing suppliers to improve their practice.

If you are interested in your supplier's ethical reputation, ask for information about their labour or green practices, and if appropriate, inspect their workplace.

The Ethical Trading Initiative (ETI) produces a workbook which gives detailed advice about how to get accurate information from workers and company records during inspections.

3.5 Consider alternative suppliers.

Use a reuse network, such as Freecycle, to get office equipment free. Over 60 Freecycle groups cover the UK and the movement is growing fast; computers, printers and office furniture are among the most frequently traded goods.

What is waste to some businesses could be used by others as a raw material. Check with the National Industrial Symbiosis Programme (NISP), which may be able to put you in touch with another suitable business.