•  34% of construction SMEs set to pay extra for sustainability boost, finds research by Paragon Bank
• Construction sector least likely to do so, compared with 49% across all sectors
• Financing options available to firms looking to invest in green as new technology becomes available

Construction is the sector least likely to invest in green technology, new research has found.

Conducted by Paragon Bank, the research found that 34% of construction SMEs were willing to pay extra for green funding options – compared with 77% of agriculture SMEs, the sector most likely to pay extra, and 49% of SMEs overall.

The research highlights the gap between the green technology available to other sectors compared with construction, and the need for new options to become available. 

When asked if they would currently describe their business as green, only 25% of construction SMEs considered themselves to be, compared with 73% and 48% of the agriculture and transport sectors respectively. 

Citing the financial drawbacks for making their businesses greener, construction firms listed:

• Costs of buying new equipment (54%)
• Increased supply costs (43%)
• Difficulty sourcing green equipment (39%)
• Need to pass on cost to customers (38%)
• Complexities in changing equipment (24%)

The research also uncovered that 79% of SMEs in the sector were open to making their business green in the future, drawing attention for the need for specialist financing to support businesses wanting to make the transition to more sustainable practices.

Reasons cited by SMEs, across all sectors, for improving their sustainability practices included:

• Improves reputation of the business (61%)
• Seen to be doing our bit for the environment (59%)
• Ensures compliance with legislations (48%)
• Aids customer perceptions of the business (44%)
•  Saves money (31%)

Commenting on the findings Terry Lloyd, Paragon’s Head of Construction, said:

“The need to find more sustainable, environmental ways of working has become embedded in the approach of our sector. Through recycling and sourcing greener materials, recent years have shown marked changes in both attitude and practices – but we are still waiting for technology to catch-up with our green ambitions.

“The research, undertaken by Paragon Bank, highlights this disparity. SMEs within the sector want to make the change, but their ability to do so is limited by what is practically possible at this moment in time. This will change however, and now is the time for firms to start thinking about making positive changes.

He added: “It is never too early to start exploring financing options for future green purchases, and to be ready for when that technology becomes available.

“As a sector that often relies on expensive, energy intensive equipment, and it is understandable that construction SMEs have concerns over the cost of financing new, green technology.  At Paragon, we are keen to do our part in the transition to cleaner technology and to work with SMEs from across the sector to achieve their sustainability goals.”

For further information contact:

Tom Frew
Media Relations Manger
Paragon
E: [email protected]

www.paragonbank.co.uk 

Notes to editors:

Paragon Bank PLC a subsidiary of the Paragon Banking Group PLC which is a FTSE 250 company based in Solihull in the West Midlands. Established in 1985, Paragon Banking Group PLC has over £13 billion of assets under management and manages over 450,000 customer accounts.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ.