Delivering net zero and beyond: addressing the financing challenges for UK green SME transition

The transitional challenges to delivering a green growth economy, particularly for small- and medium-sized enterprises (SMEs), presented by the twin concerns of climate and biodiversity are considerable. This chapter examines the UK case, where extensive public and private investment is required, in combination, to deliver the UK Government’s desired green growth enabled by green innovation and business transition towards environmentally positive business models. The chapter draws on a contemporary literature review and qualitative interview evidence from UK financiers, entrepreneurial innovators and policymakers. We examine how they influence the emerging UK green finance escalator that relates to providing finance for green enterprise from an initial idea through to commercialisation, scaleup expansion and maturity. The findings suggest that this green transition requires a clear SME finance roadmap to deliver coherent public policy and regulation and sufficient knowledge of the environmental risks and opportunities presented. We provide a blueprint framework that can provide the finance for net zero and, beyond this, the wider environmental changes needed for a sustainable green economy transition.