Balance sheet and investors

You may be able to fund an investment through the cash available in your business or with the help of investors. Your accountant, solicitor or banking relationship manager might be able to connect you with potential investors locally or nationally.

Accountants will likely know of any tax relief or incentives available for action that moves your business towards net zero emissions. Your accountant will be familiar with your balance sheet and may have a corporate finance department that can source equity or debt investment for your business. In addition to this, some accounting services offer easily accessible, online resources to help companies develop strategies to improve their environmental impact.

Example

Digital accountancy firm Xero works alongside apps that can plug into its accounting software platform to provide additional analyses to clients. Carbon Analytics, for example, utilises data about the purchase of items like petrol and utilities to calculate the carbon and water use of organisations’ operations.

Angel investors are typically wealthy individuals with experience or interest relevant to your business. In the UK, they tend to invest between $25,000 and $750,000, although this range can vary depending on the location and industry of your company.

Venture capital funds are a common source of larger investments. As venture capital firms can be willing to take more risk, they also seek greater returns and therefore can be suitable for businesses with ambitious growth prospects.

Crowdfunding aims to grow the pool of potential investors in your business, usually by decreasing the minimum amount any individual needs to invest to acquire a share. Crowdcube and Kickstarter are examples and European examples can be found at CrowdSpace.com.

How to prepare for conversations

What you could ask

Professional advice should be sought before formally approaching any potential source of investment. The price of the shares you are selling will need to be agreed between your existing shareholders, directors and the investors. To agree this price there will be a due diligence process, similar to seeking a large loan, and again it would be advisable to seek professional representation through this process.

Read about businesses who have successfully found financial support

Other sources of financial support

Customers (buyers)

Banks

Grants and other government support

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