Net Zero transition

Access to finance by UK green SMEs

This ongoing project, conducted with Prof. Robyn Owen and Isco Coban, investigates the demand and supply of finance to established UK SMEs that aim to transition to low-carbon production processes. The project started in 2023 with the analysis of the Longitudinal Small Business Survey (LSBS) conducted by the Department for Business and Trade (DBT), and addressed the demand-side aspects of Net Zero (NZ) finance. In particular, we investigated whether geographically disadvantaged green SMEs faced hurdles in accessing finance that green SMEs located in large financial centres did not experience. Our main findings were disseminated in a research report at the Entreprise Research Centre in September 2024. partially funded by the DBT.

In 2024 we conducted 21 qualitative interviews with supply-side stakeholders, including banks, non-bank debt providers, finance brokers, and business support organizations, focusing on London and the rural South-West. Key findings reveal a two-tier SME financing system in England: larger, well-resourced SMEs can access traditional bank debt finance and government green grants, while smaller, less-resourced SMEs struggle due to insufficient internal funds, information, and external finance options. These smaller SMEs often turn to alternative non-bank debt finance, sometimes through brokers, who play a crucial but inconsistent and unregulated role. Additionally, limited and poorly targeted grant funding, along with landlord-tenant property restrictions, hinder the green transition for many SMEs.

Financing green and sustainable shipping

The global shipping industry, like many others, is under growing pressure to be more sustainable. Regulation, renewable energy advances and customer demand have created a golden opportunity to make shipping more environmentally sustainable, which, however, entails significant funding. Traditional ship financing has been done largely on a secured basis, with relatively few considerations around sustainability and environmental protection. Our research aimed to explore the attitudes of shipping industry participants, through the use of a survey, to green financing, that is, issuing unsecured and covered green, social, and sustainable bonds and other related financing instruments. These could effectively advance the environmental and social agenda in the industry, strengthening environmental, social, and governance (ESG) structures at the same time. Our results, published in the Journal of Environmental & Earth Sciences, suggest that there is considerable scope for improving knowledge and awareness among marine professionals to bridge the sustainability gap. This research was financed by The University of Gibraltar, and was conducted by Edward Bace Cpt Singh and Sylvia Gottschalk

Entrepreneurial risk appetite, access to finance and SME investment

This project builds on the ongoing research on financing NZ transition, but focusing more broadly on the factors that affect the investment decisions of SMEs, and green SMEs in particular. The project will start in April 2025 with funding from the DBT. The project team includes Dr Quang Nguyen, Prof. Owen and Sylvia Gottschalk.