More than eight in 10 small businesses (85%) plan to invest in sustainability measures in the coming year, with energy efficiency ranking as the top priority for 2024 - according to new research from Novuna Business Finance.

The survey asked a representative sample of 1,000 small business leaders which investments they were thinking of making in the next year to help improve their sustainability credentials.

Key findings from the survey were:

• Energy efficiency: One-third of businesses (33%) said they plan to invest in solar or renewable energy, with an additional 26% focusing on improving the insulation of their premises - and 24% plan to overhaul their heating systems for increased efficiency.
• Electric vehicles: A notable 28% of survey respondents are considering the switch to electric vehicles and 25% are keen to install electric charging points at their premises.
• Leadership for sustainability: A significant 22% of businesses have plans to appoint a Head of Sustainability, as part of a drive forward improvements at a strategic level.
• New machinery: More than one in four respondents (27%) are planning to invest in new equipment and machinery that is more sustainable. This was most prevalent in four industry sectors - media and marketing (44%), agriculture (38%), manufacturing (33%) and IT/telecoms (33%).
• Water use: In addition to reviewing energy use, 23% of small business owners were also looking at ways to streamline production in order to reduce water usage for the New Year.

The survey also reveals that the tech proficiency of a small business correlates with its propensity to move forward with sustainability initiatives. Nationally, 66% of small businesses that make full use of their technology to achieve competitive advantage are also investing in sustainability projects, compared to 32% of enterprises that struggle with tech modernisation.

Joanna Morris (pictured), Head of Insights commented: “Last year presented many small businesses with a challenging economic context, but despite this our study suggests many business owners are prioritising sustainability for 2024. It makes business sense but also it is the right thing to do. After two years of soaring energy prices, the focus on efficiency measures here is pragmatic. It is also significant that many small businesses see value in appointing a Head of Sustainability to give their work a more strategic focus – and investing in new assets and machinery.

“At Novuna Business Finance, sustainability is at the heart of our business and we provide funding to help small businesses grow as sustainable enterprises and support them in whichever way that they feel is most suitable for their business. We are all on a collective journey towards sustainability and this research provides valuable insight into a how small businesses see these important issues and understand how we can better support them achieve their goals.”