The British Furniture Confederation (BFC) has submitted evidence to the House of Commons Energy Security and Net Zero Committee as part of its inquiry into the relationship between high UK energy costs, decarbonising business and industry, and driving economic growth.
The inquiry is examining how energy costs affect the ability of British businesses to grow and decarbonise, including what Government can do to encourage UK small and medium-sized enterprises (SMEs) to invest in the transition to lower-carbon production.
With SMEs making up the overwhelming majority of businesses in the furniture and beds, furnishings, and flooring (FFF) sector, the BFC has focused its response on two of the Committee’s key questions:
- What should the Government be doing to incentivise SMEs to decarbonise?
- Is the biggest barrier to SMEs the high cost of electricity?
The BFC’s evidence shows considerable willingness within the sector to invest in sustainability. Its most recent industry survey found that 93% of respondents considered sustainability practices important, while 81% planned to invest in sustainability and circular economy practices over the coming years.
The challenge is therefore not simply persuading businesses of the case for greater sustainability. For many SMEs operating on tight margins, it is finding the capital and confidence to invest while managing significant wider cost pressures.
The BFC is calling for Government to target support towards investment in more energy-efficient plant and machinery, cleaner technologies, and sustainable materials; make financial support straightforward and accessible to SMEs; provide greater support for research and development; and give businesses the long-term policy certainty needed to make important investment decisions.
On energy costs, the BFC argues that electricity prices should be considered as part of the wider cumulative cost of doing business and investing in the UK. Higher operating costs not only affect businesses directly but reduce the capital available to invest in machinery, energy efficiency, R&D, and cleaner production.
The submission also highlights the importance of international competitiveness. British manufacturers investing to meet higher environmental standards should not be placed at a competitive disadvantage against imported products manufactured to lower standards.
The BFC believes decarbonisation and economic growth should be mutually reinforcing. The objective should be to create the conditions in which businesses can invest in more sustainable production while remaining competitive, productive, and able to grow.
Read the full submission.