Plan for the future
AN SME accounting expert with regional accountancy firm and business advisor Azets – which has offices in London Road, Newbury – is urging businesses in the region to address environmental, social, and governance (ESG) policies or risk losing their funding line.
Azets’ accounts and business advisory services partner Nick Parrett says climate change and ESG is already starting to have a impact on funding decisions and those too focused on the short-term could be putting the future of their businesses at risk.
He warns that lenders, suppliers, customers, and employees will demand a roadmap to a net zero strategy going forward and failure to address ESG could be catastrophic.
The warning follows a poll by Azets of 235 SME business leaders, which revealed a significant number of SMEs have not reviewed their business model in the past year.
According to the poll, 63 per cent of firms have reviewed their business model in the past year, whilst almost a quarter of SMEs have not.
Just 10 per cent of businesses say climate change and ESG is most likely to have an
effect on their business model moving forward, with staffing, economic recovery and digitisation and technology the most important factors.
Mr Parrett said: “A quarter of businesses having not reviewed their business model for more than a year is an alarming figure, particularly as the real impact of Brexit and Covid-19 may not yet have been felt.
“ESG will keep growing and will impact decision making by lenders, suppliers, customers and employees.
“We urge SME businesses to seek professional advice to ensure they tackle short-term challenges and plan for longterm ESG requirements.”