Does energy efficiency of UK SMEs affect their access to finance?

Jingyuan Chen*, Raffaella Calabrese, Marc Cowling

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract / Description of output

To effectively mitigate climate change, a crucial focus area is enhancing energy efficiency in firms and industries. This objective becomes even more imperative in light of the recent escalation in energy prices caused by the Russo-Ukrainian war. Given the limited financial resources of Small and Medium Enterprises (SMEs), facilitating their access to finance becomes a potential avenue for reducing carbon emissions. Based on our knowledge, this is the first study that analyses the potential impact of energy efficiency on access to finance for SMEs in the UK. We consider a dataset of 2,855 UK firms from 2015 to 2021 collected from the Longitudinal Small Business Survey. We find that energy efficient companies and firms that show energy saving behaviours are facing fewer credit constraints. These results are robust if we control for several company characteristics, including age, size, turnover, industry, location, and legal status.
Original languageEnglish
Article number107251
JournalEnergy Economics
Early online date7 Dec 2023
Publication statusPublished - Jan 2024

Keywords / Materials (for Non-textual outputs)

  • Small and Medium Enterprises (SMEs)
  • energy efficiency
  • access to finance


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