For small and medium-sized enterprises (SMEs), the journey to net zero can feel like both an obligation and an opportunity
By Glen Christie-MacAllan, Head of Asset Finance at Cambridge & Counties Bank
More and more business leaders recognise that sustainability is no longer a “nice-to-have” it’s a commercial necessity. However, turning environmental ambition into practical action often comes up against one major barrier - the cost.
At Cambridge & Counties Bank, we’re seeing more SMEs than ever committed to reducing their environmental impact. But we also hear a repeated challenge - that upfront investment in low-carbon technology, energy-efficient equipment, or renewable infrastructure can stretch increasingly tight budgets.
Asset finance is helping to close the gap between intention and implementation.
The Challenge
SMEs make up over 99% of the UK’s businesses and are responsible for roughly half of all business-related emissions. Their role in achieving national net zero targets is therefore critical. However, while large corporates may have dedicated sustainability teams and access to green bonds or large-scale investment capital, smaller firms often lack those resources.
According to research from the British Business Bank*, the majority of SMEs see cost as their biggest obstacle to decarbonisation. Asset finance can help provide an accessible and scalable way to overcome that barrier and turn sustainability into a manageable and financially sustainable investment.
Supporting businesses with their sustainability aspirations
Energy-efficient upgrades
Replacing legacy equipment with energy-efficient alternatives can be an effective way to deliver carbon and cost savings. Through asset finance, SMEs can spread the cost of these investments over time and so maintain working capital while unlocking operational efficiencies.
Fleets and transport
Transitioning to electric vehicles and hybrid fleets is a route that an SME can consider to reduce emissions. Asset finance allows businesses to lease or purchase these vehicles flexibly, keeping pace with the ongoing technological advances and government incentives without the strain of large upfront costs.
Renewable energy
Solar panels, heat pumps, and on-site renewable systems can aid a business in reducing its reliance on traditional energy sources and the related fluctuating energy prices. With tailored finance solutions, SMEs can fund these installations upfront and repay over time, often using the savings generated from lower energy bills.
Supporting circular business models
Asset finance isn’t limited to new purchases and it can also support recycling equipment, sustainable production lines, or modular technologies that help SMEs operate within the circular economy.
* British Business Bank SMEs and Net Zero: UK Business Consensus Report 2025
Asset finance as a strategic advantage
Asset finance is a strategic enabler that allows businesses to modernise responsibly, strengthen their ESG credentials, and future-proof their business models.
By investing in sustainable assets today, SMEs can:
Preserve cash flow while still accessing the tools needed to grow.
Reduce long-term costs through improved energy efficiency.
Enhance brand value by demonstrating real environmental and social governance.
Align with supply chain expectations, as Government and larger organisations increasingly require evidence of sustainability from their partners.
Building momentum together
Reaching net zero will not happen overnight but every investment counts. The businesses that act now are helping to contribute to a more sustainable economy and will also be better positioned for future competitiveness, regulation, and customer demand.
Asset finance provides the bridge between aspiration and action. By combining flexible funding with responsible investment, SMEs can accelerate their transition to net zero on their own terms and timelines.
At Cambridge & Counties Bank, we’re proud to be working with SMEs on this journey, helping them finance the assets that power both growth and sustainability.