28 June 2024
By Alison McRae, Senior Director, Glasgow Chamber of Commerce
According to the UK Government, at the end of 2023, 99.9% of the UK’s 5.6m business population are SMEs. With 5.51m of these classed as small and up to 49 employees and a further 36,900 classed as medium having 50-249 employees, they account for three-fifths of the employment and around half of the turnover in the UK private sector. They are absolutely the backbone of our economy and the real risk takers and innovators.
Our own member base at Glasgow Chamber of Commerce represents over 86% of SMEs and we regularly hear feedback on the challenges of doing business just now with ever increasing costs, labour market issues and of course how to make progress on or even start to address climate related issues amidst this context. It is often cited that the SME business community will be instrumental in driving new innovative solutions and business models which will be both good for sustainable economic growth and for our planet and future. Easing access to finance for SMEs – and particularly supporting innovation in new business models and technologies has been a call to action across government for some time as the current systems have success rates averaging 5-10% due to high levels of competition so there is clearly an opportunity to accelerate change.
From our own experience over the years some of the most effective ways of supporting businesses outwith finance include providing practical solutions and by sharing the experience of others which is part of the DNA of the Chamber: its convening abilities.
At our second Congress of Business (COB) in May, delivered in partnership with Scottish Chambers of Commerce and British Chambers of Commerce networks across the UK and globally alongside our principle partner the University of Glasgow, we convened nearly 500 business, investors, academic institutions and social enterprises to focus on how we collectively can scale action across the various Glasgow Climate Pacts. This year’s focus was on the importance of investment in driving decarbonisation alongside a spotlight on innovation in the built environment with a vibrant and highly accomplished range of thought leaders contributing to the debate. This hybrid pacer event, mid way between COPs, seeks to build momentum and support the transition across all sectors. There are many potential unintended consequences of policy interventions and that is one of the reasons we have chosen to focus on the innovation and future proofing business benefits of moving to a more circular economy. The $4.5 trn opportunity around this was highlighted by James Close, Head of Climate, NatWest Group as was how we need to readdress our relationship with the materials we consume. He challenged delegates to look at what business models are fit for purpose and how to embed circular economy into these approaches as they will ultimately be more investable in the long term as they attract less risk.
There is also an opportunity for financial services organisations and investors as 38% of delegates stated they didn’t know what green finance was with a further 30% saying that they would like to use it. Emma Howard Boyd Chair of Green Finance Institute and Client Earth shared that green finance originally was used to support the delivery of a clean energy transition but now it is being approached through a wider sector by sector approach and relevant financial products such as around mortgages and retrofit investment are being developed. The ultimate message around financing the transition for business was about being bold and moving at pace rather than the pursuit of perfection.
Will Hutton Political Economist, Journalist and Author in his overview of the benefits of moving to a ‘We Society’ referenced the role that business has in making the world a bit better and in both societal obligation and environmental innovation. All of this was complimented by Professor Sir Anton Muscatelli Principal and Vice Chancellor of the University of Glasgow as he outlined the critical role of further and higher education institutions in research and development alongside the need for a collaborative spirit to drive innovation to net zero across academia, industry – and particularly SMEs, government and community at all levels.
With action being the core raison d’etre of COB, 36% of delegates stated that they would improve skills and knowledge of colleagues and a further 19% said that they would engage Board Directors and shareholders to accelerate change within their businesses. Some concluding reflections from COB moderator Professor Greg Clark CBE included the opportunities with enterprise, innovation, investment and systems change across energy, waste and materials; a shared form of prosperity reforming both our financial and business models; international alliances which are vital to sharing risks and costs; giving consideration to regulation in ways which support innovation rather than have the kind of innovation culture where only certain major companies take part; and the role of design in creating things which are appealing and distinctive but use this to drive the responsible use of materials and products.
This all took place under the backdrop of the first ever Glasgow Climate Week which saw record numbers of delegates in attendance at All Energy in the SEC. And the SEC was also very much front of mind as they continue to progress discussions to secure investment for their ambitious plans to deliver the world’s first net zero campus. It was a key goal for our Circular Glasgow Supper Club the evening before COB with guests hearing from Anna Campbell Jones Designer, Retailer and Presenter of BBC Scotland’s Scotland’s Home of the Year and where a range of investor introductions were made in support of this critical asset for the economy of the city, Scotland the UK.
Much like the hosting of COP26, Glasgow is now a global leader in climate change action, and legacy events like COB having a permanent home in our city, where business leaders from across the world come to meet and discuss progress, should be something we in the Glasgow business community continue to celebrate.