Many governments are supporting businesses to reduce their emissions so they can reach the targets agreed with the United Nations. Short-, medium- and long-term business prosperity is critical to improve jobs, welfare and stability for citizens. For this reason, any government policies aimed at incentivising businesses to address climate change are often accompanied by technical assistance or grants. Green grants, which provide finance to companies pursuing environmentally friendly projects or objectives, are now available in many areas.
Grants and other government support
Who to speak with
Local government officials
National programmes
Specialist grant websites
Local enterprise partnerships
Development and state-backed banks
Many public initiatives are managed at the local government level so consult their website or helpline for guidance.
Example
The State of California in the United States has built a directory of grants and other programmes available to businesses looking to tackle their emissions and other environmental impacts.
Search on government department websites and in your national media for initiatives specific to the countries your business is active in.
Example
The UK’s Department for Business, Energy & Industrial Strategy (BEIS) lists a variety of available financial support across the country. For example, Low Carbon Dorset, in the UK, provides grants covering up to 40% of the project costs for carbon reducing, energy saving investments by businesses in the county of Dorset. It also provides technical advisory services.
Specialist grant websites aggregate grants from a variety of different places to make it easier for you to find options – have a look in your local communities and online.
Example
GrantsOnline brings together a variety of grants available in the UK into one database.
Local enterprise partnerships bring local businesses and municipal governments together to design policies and projects to promote local economies.
Example
One example in the UK is the Business Growth Hub, which provides peer-to-peer support and specialist advice on where to find financial support for sustainable projects.
The SME Climate Hub works to bring many of these services into one place with its library of tools and project partners.
Most countries have a bank that is owned in some way by the government or is funded by a group of governments, for example the World Bank. These banks can either directly finance sustainable activities with grants or loans at a low interest rate – known as promotional loans – or they can partner with private organisations to share risks and decrease interest rates.
Example
KfW partners with local banks around the world to offer loans, at better rates of interest for businesses assessed as contributing to sustainable development. Examples of similar partnerships in Latin America.
What you could ask
The aim is to understand what the organisations suggested above offer and, if nothing, to flag examples and whether they could consider doing something similar. Therefore, key questions to ask include:
- Do you offer support for businesses reducing their carbon footprint? For example:
- Help to fund investments in emissions-reducing equipment or other operational changes?
- Advisory services that could help us refine our emission reduction plans?
- If you do not offer support, are you aware of other organisations that do?
Potential sources of financial support – summary table
Stakeholder
Motivation for providing financial support
Examples of what financial support might be available
Examples of who you could speak with to learn if support offered
Customers (buyers)
- Climate commitments by companies that include reducing the emissions of their supply chain
- Improve the resilience of their supply chain to new policies aimed to avert climate change or the negative impacts of climate change
- Protect supply chain from increased costs associated with carbon, such as ‘dirty’ energy
- Improved purchasing terms (eg, days receivable reduced so working capital improves for small business)
- Access to preferential invoice finance (eg, borrow against outstanding purchase orders to access funds sooner)
- Advice and mentoring
- Procurement representative
Banks
- Commitments by banks to support customers to reduce emissions
- Reduce the risk and carbon footprint of bank lending
- Strengthen relationships and generate business opportunitie
- Working capital solutions, e.g. trade finance
- Loans for investments that reduce emissions
- Emission calculators and advice
- Relationship manager
- Sector specialist (eg, transport)
Grants and other forms of government support
- Local, national and international objectives for action on climate change
- Grants to encourage investment in emissions reduction
- Discounted lending distributed by a development bank, such as KfW
- Access to investors or other sources of funds dedicated to climate action
- Accountant
- Local council enterprise officer
- Local municipality
- Bank
- NGOs offering financial support in your area
Balance sheet and investors
- Lower operational expenditures
- Improve the commercial positioning of the business (eg, including alignment with buyers’ climate-related procurement policies)
- Investors’ climate objectives
- Self-funded from balance sheet (cash, asset sales, etc.)
- New shareholder investment (equity)
- Accountant
- Current shareholders
- Prospective investors
Customers (buyers)
Motivation for providing financial support
- Climate commitments by companies that include reducing the emissions of their supply chain
- Improve the resilience of their supply chain to new policies aimed to avert climate change or the negative impacts of climate change
- Protect supply chain from increased costs associated with carbon, such as ‘dirty’ energy
Examples of what financial support might be available
- Improved purchasing terms (eg, days receivable reduced so working capital improves for small business)
- Access to preferential invoice finance (eg, borrow against outstanding purchase orders to access funds sooner)
- Advice and mentoring
Examples of who you could speak with to learn if support offered
- Procurement representative
Banks
Motivation for providing financial support
- Commitments by banks to support customers to reduce emissions
- Reduce the risk and carbon footprint of bank lending
- Strengthen relationships and generate business opportunitie
Examples of what financial support might be available
- Working capital solutions, e.g. trade finance
- Loans for investments that reduce emissions
- Emission calculators and advice
Examples of who you could speak with to learn if support offered
- Relationship manager
- Sector specialist (eg, transport)
Grants and other government support
Motivation for providing financial support
- Local, national and international objectives for action on climate change
Examples of what financial support might be available
- Grants to encourage investment in emissions reduction
- Discounted lending distributed by a development bank, such as KfW
- Access to investors or other sources of funds dedicated to climate action
Examples of who you could speak with to learn if support offered
- Accountant
- Local council enterprise officer
- Local municipality
- Bank
- NGOs offering financial support in your area
Balance sheet and existing or prospective investors
Motivation for providing financial support
- Lower operational expenditures
- Improve the commercial positioning of the business (eg, including alignment with buyers’ climate-related procurement policies)
- Investors’ climate objectives
Examples of what financial support might be available
- Self-funded from balance sheet (cash, asset sales, etc.)
- New shareholder investment (equity)
Examples of who you could speak with to learn if support offered
- Accountant
- Current shareholders
- Prospective investors