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Rural SMEs, Environmental
Action, and Perceived
Opportunities
State of Rural Enterprise Report nos. 2 &
3
Dr Kevin Mole with Serdal Ozusaglam,
Stephen Roper and Panagiotis
Kyriakopoulos
Environment
Introduction
• Previous NICRE research highlights rural firms more likely (45%) than urban firms
(37%) to take the environment into account when making decisions (Wishart et al.
2021)
• Businesses are on a journey in terms of their environmental practices
• Much of the support for Net Zero does not consider rural aspects
• Drivers of environmental action include consumer pressure, competition,
stakeholder perspectives (e.g attitude of senior managers), external pressures and
legislation
• Barriers include cost pressures, lack of knowledge and, in rural areas, transport costs
Including the environment in decision-making
• 41% of rural businesses always
consider the environmental
impact, compared to 37% of
urban businesses.
• 45% of rural businesses
sometimes consider it (42%
urban).
• 14% of rural businesses never
consider the environmental
impact (21% urban).
14%
45%
41%
21%
42%
37%
20%
43%
37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Never Sometimes Always
Rural Urban Total
Knowing where to find reliable information to help
• Rural firms (69%) more
likely to know where to
find help than urban
firms (66%), but uneven:
• South West rural firms
more likely to know
where to find reliable
information than in North
East and West Midlands.
• North East rural firms less
likely than urban firms to
know where to find
information, with reverse
situation in South West
and West Midlands.
62%
72%
67%
70%
66%
64%
56%
58%
60%
62%
64%
66%
68%
70%
72%
74%
North East South West West Midlands
Rural Urban
Taking steps to reduce environmental impact
• 54% of businesses ‘take
environmental action’.
• More rural firms (57%)
take action (53% in
urban areas).
• Driven by contrast
between rural and urban
enterprises in the West
Midlands, where 55% of
rural and 47% of urban
businesses have taken
action.
56%
58%
55%
56%
59%
47%
0%
10%
20%
30%
40%
50%
60%
70%
North East South West West Midlands
Rural Urban
The ladder of environmental action
90%
46%
42%
38%
24% 23%
14%
2%
87%
43%
40%
43%
28% 28%
15%
3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Recycled waste, water,
or materials
Introduced new or
improved production
processes
Conducted training on
environmental matters
Introduced new low
carbon products or
services
Introduced new or
improved delivery,
transport, or
distribution systems
Undertaken
environmental reports
or audits
Put in place
environmental
certification
None of these
Rural Urban
Very few businesses measure their emissions
• Just 3% rural and
5% urban
businesses
measured their GHG
emissions “using an
online calculator”.
• 4% of rural and
urban businesses
measured GHG
emissions through
“working with a
consultant or
external company”.
3%
5% 5%
4% 4% 4%
0%
1%
2%
3%
4%
5%
6%
Rural Urban Total
Yes, using an on-line calculator or tool Yes, working with a consultant or external company
Rural businesses more likely to face barriers in their
efforts to reduce carbon emissions
45%
40%
41%
37%
38%
39%
40%
41%
42%
43%
44%
45%
46%
Rural Urban Total
47% 47%
40%
41%
37%
42%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
North East South West West Midlands
Rural Urban
What are the barriers?
• Cost of adopting greener
technology
• Access to info, people and skills
development, especially in urban
areas.
• Regulatory complexity less a
concern.
• Lack of people locally to advise on
Net Zero indicates a perceived
lack of support.
• Rural firms more likely to report
being constrained; urban firms
report a wider variety of obstacles.
67%
33% 33%
30%
26%
0%
13%
66%
39% 38%
43%
31%
1%
17%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Cost of
purchasing or
installing
greener
technology
Lack of
information on
low carbon
technologies
Lack of people
locally to advise
or install
solutions
Lack of relevant
skills within the
firm
Uncertain
demand for low
carbon products
or services
Complexity or
cost of meeting
regulations or
standards
None of these
Rural Urban
What benefits does environmental action bring?
49%
31%
23%
26% 25%
20% 21%
59%
41%
27%
24% 23%
25%
23%
57%
39%
26% 25% 24% 24%
22%
0%
10%
20%
30%
40%
50%
60%
70%
Contributed to your company
identity or reputation
Helped your staff to develop
new skills
Created new profitable
opportunities
Helped you to develop new
products or services
Helped you to enter new
markets
Helped you to attract or retain
employees
Led to an increase in profits
Rural Urban Total
Conclusion – encouraging steps but we need to climb
the ladder
• Most businesses in rural and urban areas take the environment
into account when making decisions.
• Most have acted to reduce environmental footprint.
• There is a ‘ladder’ of environmental action with recycling and
waste reduction on the lower rungs.
• The middle rungs show 26% implementing process changes to
reduce carbon emissions.
• 21% have introduced new products and services, indicating a
growing trend towards environmentally responsible innovation.
• Environmental audits, certification, and greenhouse gas
emissions measurement prove more complex, particularly in
rural areas.
Rural opportunities
An opportunity-driven mindset
• Businesses have faced perfect storm – disruption due to pandemic
followed by ‘cost of doing business crisis’. All in context of wider climate
crisis
• Are changing conditions simply deepening deficits often discussed in
terms of rural firms or are they creating new opportunities?
• Is there an ability and willingness to invest to realise post-pandemic
opportunities?
• We ask:
• What opportunities are in your area?
• How well placed are you to take advantage of these?
Health and wellbeing and the environment provide opportunities for
local business growth
• Urban firms more likely
to see opportunities
related to health and
well-being (rural 47%,
urban 52%).
• Rural firms more
focused on
environmental/ green
products and services
(rural 44%, urban 40%).
• Fewer identify
opportunities linked to
data skills and use of
data, tourism, and
exporting.
47%
44%
37%
37%
21%
52%
40%
40%
37%
17%
0% 10% 20% 30% 40% 50% 60%
Providing services and products
that improve health and wellbeing
Providing environmental/green
services and products
Improving data skills and use of
data
Expanding opportunities for
tourists and visitors
Increasing levels of exporting
Rural Urban
39% see themselves as well placed to take advantage of
opportunities
• An equal
proportion (39%)
of rural and
urban firms
reported that
their businesses
are either ‘very
well’ or ‘well’
placed for
potential
opportunities.
• But more North
East firms see
themselves as
well-placed.
39%
25%
1%
34%
39%
26%
1%
35%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Very well or well placed
Not likely to affect us
May negatively affect us
Not relevant to our business
Rural Urban
Well placed firms more likely to invest
• Well placed
firms more
likely to invest
in
environmental
improvements,
new products,
marketing.
• But developing
international
markets is
different.
Perceived constraints by firm size: micro lack money; medium sized
lack people
• More
medium
sized firms
report staff
recruitment
and
retention,
lack of
transport,
but more
microbusines
ses report a
lack of
financial
resources
47%
40%
40%
38%
33%
33%
26%
20%
13%
67%
39%
45%
43%
38%
38%
23%
15%
9%
70%
28%
35%
47%
30%
34%
22%
17%
23%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Ability to recruit and retain staff
Lack of financial resources
Lack of availability of affordable housing…
Lack of transport services/infrastructure
Planning restrictions
Inadequate broadband capacity
Lack of availability of business premises
Lack of local business cooperation
Lack of cooperation with…
1 to 9 10 to 49 50+
From opportunities to investment
• Widespread perception among rural firms of opportunities
for developing products or services related to health and
well-being, as well as developing environmental or green
products or services.
• Firms which see themselves well placed to take advantage of
local growth opportunities more likely planning to increase
or maintain levels of investment in environmental
improvements, new products, marketing, well-being and
training.
• Familiar challenges threaten rural firms’ ability to grasp the
opportunities available, however, suggesting continued
importance of initiatives focused on improving rural
transport, housing and broadband.
Opportunities
Well-placed
Investment
Constraints

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Rural SMEs, environmental action, and perceived opportunities - Kevin Mole

  • 1. Rural SMEs, Environmental Action, and Perceived Opportunities State of Rural Enterprise Report nos. 2 & 3 Dr Kevin Mole with Serdal Ozusaglam, Stephen Roper and Panagiotis Kyriakopoulos
  • 3. Introduction • Previous NICRE research highlights rural firms more likely (45%) than urban firms (37%) to take the environment into account when making decisions (Wishart et al. 2021) • Businesses are on a journey in terms of their environmental practices • Much of the support for Net Zero does not consider rural aspects • Drivers of environmental action include consumer pressure, competition, stakeholder perspectives (e.g attitude of senior managers), external pressures and legislation • Barriers include cost pressures, lack of knowledge and, in rural areas, transport costs
  • 4. Including the environment in decision-making • 41% of rural businesses always consider the environmental impact, compared to 37% of urban businesses. • 45% of rural businesses sometimes consider it (42% urban). • 14% of rural businesses never consider the environmental impact (21% urban). 14% 45% 41% 21% 42% 37% 20% 43% 37% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Never Sometimes Always Rural Urban Total
  • 5. Knowing where to find reliable information to help • Rural firms (69%) more likely to know where to find help than urban firms (66%), but uneven: • South West rural firms more likely to know where to find reliable information than in North East and West Midlands. • North East rural firms less likely than urban firms to know where to find information, with reverse situation in South West and West Midlands. 62% 72% 67% 70% 66% 64% 56% 58% 60% 62% 64% 66% 68% 70% 72% 74% North East South West West Midlands Rural Urban
  • 6. Taking steps to reduce environmental impact • 54% of businesses ‘take environmental action’. • More rural firms (57%) take action (53% in urban areas). • Driven by contrast between rural and urban enterprises in the West Midlands, where 55% of rural and 47% of urban businesses have taken action. 56% 58% 55% 56% 59% 47% 0% 10% 20% 30% 40% 50% 60% 70% North East South West West Midlands Rural Urban
  • 7. The ladder of environmental action 90% 46% 42% 38% 24% 23% 14% 2% 87% 43% 40% 43% 28% 28% 15% 3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Recycled waste, water, or materials Introduced new or improved production processes Conducted training on environmental matters Introduced new low carbon products or services Introduced new or improved delivery, transport, or distribution systems Undertaken environmental reports or audits Put in place environmental certification None of these Rural Urban
  • 8. Very few businesses measure their emissions • Just 3% rural and 5% urban businesses measured their GHG emissions “using an online calculator”. • 4% of rural and urban businesses measured GHG emissions through “working with a consultant or external company”. 3% 5% 5% 4% 4% 4% 0% 1% 2% 3% 4% 5% 6% Rural Urban Total Yes, using an on-line calculator or tool Yes, working with a consultant or external company
  • 9. Rural businesses more likely to face barriers in their efforts to reduce carbon emissions 45% 40% 41% 37% 38% 39% 40% 41% 42% 43% 44% 45% 46% Rural Urban Total 47% 47% 40% 41% 37% 42% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% North East South West West Midlands Rural Urban
  • 10. What are the barriers? • Cost of adopting greener technology • Access to info, people and skills development, especially in urban areas. • Regulatory complexity less a concern. • Lack of people locally to advise on Net Zero indicates a perceived lack of support. • Rural firms more likely to report being constrained; urban firms report a wider variety of obstacles. 67% 33% 33% 30% 26% 0% 13% 66% 39% 38% 43% 31% 1% 17% 0% 10% 20% 30% 40% 50% 60% 70% 80% Cost of purchasing or installing greener technology Lack of information on low carbon technologies Lack of people locally to advise or install solutions Lack of relevant skills within the firm Uncertain demand for low carbon products or services Complexity or cost of meeting regulations or standards None of these Rural Urban
  • 11. What benefits does environmental action bring? 49% 31% 23% 26% 25% 20% 21% 59% 41% 27% 24% 23% 25% 23% 57% 39% 26% 25% 24% 24% 22% 0% 10% 20% 30% 40% 50% 60% 70% Contributed to your company identity or reputation Helped your staff to develop new skills Created new profitable opportunities Helped you to develop new products or services Helped you to enter new markets Helped you to attract or retain employees Led to an increase in profits Rural Urban Total
  • 12. Conclusion – encouraging steps but we need to climb the ladder • Most businesses in rural and urban areas take the environment into account when making decisions. • Most have acted to reduce environmental footprint. • There is a ‘ladder’ of environmental action with recycling and waste reduction on the lower rungs. • The middle rungs show 26% implementing process changes to reduce carbon emissions. • 21% have introduced new products and services, indicating a growing trend towards environmentally responsible innovation. • Environmental audits, certification, and greenhouse gas emissions measurement prove more complex, particularly in rural areas.
  • 14. An opportunity-driven mindset • Businesses have faced perfect storm – disruption due to pandemic followed by ‘cost of doing business crisis’. All in context of wider climate crisis • Are changing conditions simply deepening deficits often discussed in terms of rural firms or are they creating new opportunities? • Is there an ability and willingness to invest to realise post-pandemic opportunities? • We ask: • What opportunities are in your area? • How well placed are you to take advantage of these?
  • 15. Health and wellbeing and the environment provide opportunities for local business growth • Urban firms more likely to see opportunities related to health and well-being (rural 47%, urban 52%). • Rural firms more focused on environmental/ green products and services (rural 44%, urban 40%). • Fewer identify opportunities linked to data skills and use of data, tourism, and exporting. 47% 44% 37% 37% 21% 52% 40% 40% 37% 17% 0% 10% 20% 30% 40% 50% 60% Providing services and products that improve health and wellbeing Providing environmental/green services and products Improving data skills and use of data Expanding opportunities for tourists and visitors Increasing levels of exporting Rural Urban
  • 16. 39% see themselves as well placed to take advantage of opportunities • An equal proportion (39%) of rural and urban firms reported that their businesses are either ‘very well’ or ‘well’ placed for potential opportunities. • But more North East firms see themselves as well-placed. 39% 25% 1% 34% 39% 26% 1% 35% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Very well or well placed Not likely to affect us May negatively affect us Not relevant to our business Rural Urban
  • 17. Well placed firms more likely to invest • Well placed firms more likely to invest in environmental improvements, new products, marketing. • But developing international markets is different.
  • 18. Perceived constraints by firm size: micro lack money; medium sized lack people • More medium sized firms report staff recruitment and retention, lack of transport, but more microbusines ses report a lack of financial resources 47% 40% 40% 38% 33% 33% 26% 20% 13% 67% 39% 45% 43% 38% 38% 23% 15% 9% 70% 28% 35% 47% 30% 34% 22% 17% 23% 0% 10% 20% 30% 40% 50% 60% 70% 80% Ability to recruit and retain staff Lack of financial resources Lack of availability of affordable housing… Lack of transport services/infrastructure Planning restrictions Inadequate broadband capacity Lack of availability of business premises Lack of local business cooperation Lack of cooperation with… 1 to 9 10 to 49 50+
  • 19. From opportunities to investment • Widespread perception among rural firms of opportunities for developing products or services related to health and well-being, as well as developing environmental or green products or services. • Firms which see themselves well placed to take advantage of local growth opportunities more likely planning to increase or maintain levels of investment in environmental improvements, new products, marketing, well-being and training. • Familiar challenges threaten rural firms’ ability to grasp the opportunities available, however, suggesting continued importance of initiatives focused on improving rural transport, housing and broadband. Opportunities Well-placed Investment Constraints

Editor's Notes

  1. Perhaps just mention larger firms appear more environmentally conscious.
  2. Perhaps mention firms with more employees more likely to take action
  3. Perhaps just mention that Smallest microbusinesses report fewer restrictions in their efforts to reduce carbon emissions
  4. Perhaps just mention more South-West firms report reputation gains from Net Zero?
  5. Could mention in speaking notes that some regional differences e.g. North-East firms eye tourism opportunities Or just allude to some size businesses. E.g. Medium sized firms more likely to identify health and tourism. Larger firms more likely to perceive opportunities to provide health and well-being services and products. Smaller companies perceive stronger opportunities in environmental / green services and products. Micro firms less likely to identify tourist opportunities but more likely to highlight improvements in data skills and use of data.  Could replacing title with survey question
  6. Figure particularly difficult to read
  7. Full text in graph cannot be read / perhaps no need for bullet text – just mention from speaking notes about some size effects?