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Funding the Transition Report Findings

Friday 21 February 2025

Overview

This report examines the pivotal role of sustainable finance in facilitating the transition to a low-carbon economy, with a particular focus on its impact on London’s businesses. It provides a detailed analysis of the barriers that SMEs face in accessing green finance and offers targeted recommendations to bridge these gaps.

What we found

  • Understanding Businesses' Plans for Decarbonisation: As part of the survey, London businesses were asked if they had a decarbonisation plan in place. Nearly a third of (32%) London firms said they did have a plan, while 68% said they did not.
  • Current Engagement with Sustainable Finance Products: Our survey of London businesses indicated that around a fifth (20%) of all firms had tried to access finance (such as loans, grants, or other investments) specifically for the purposes of reducing emissions. However, only 13% said they had been successful in their application, compared to 6% who were unsuccessful. More than half (55%) of companies surveyed had not considered applying for finance in the previous two years. 
  • Barriers to Accessing Finance: LCCI has been working with its member businesses to understand the barriers to accessing finance. When considering finance for the use of reducing emissions, the main barriers cited by firms were a lack of awareness of where to find such products and insufficient knowledge within the business.
  • Steps to Improving Businesses' Access to Finance: Our survey showed that the main barriers to firms accessing finance were a lack of awareness of products and insufficient knowledge within firms. It is clear that more needs to be done to make companies aware of the numerous products available.
  • Why Sustainable Finance Matters for SMEs: Sustainable finance is not just a trend but a critical strategic decision for small and medium-sized enterprises. It helps SMEs to enhance financial resilience; comply with future regulations and attract investors and customers.
  • Defining Sustainable Finance for SMEs: Sustainable finance for SMEs involves financial products and strategies supporting the business’s profitability and environmental and social objectives. For SMEs, particularly in London, sustainable finance is increasingly seen as an essential part of long-term business strategy, enabling firms to improve operational efficiency, enhance their reputation, and contribute to environmental sustainability.

About this report

This report seeks to indicate how many businesses are actively seeking finance to support investment into decarbonisation. It will highlight the reported barriers to accessing finance, the impact of not being able to secure investment, and the steps that need to be taken to make sustainable finance more accessible for London businesses. Between 7 May and 7 June 2024, LCCI worked with Savanta to survey 514 London businesses. All data was weighted to represent all London businesses by company size and broad industry sector. Savanta is a member of the British Polling Council and abides by its rules. Full data tables are available online.

 

Download the report