- 51% of SMEs have supported employees financially during the cost of living crisis
- 64% are actively working to reduce their carbon footprint
- SMEs in West Midlands are most likely to act on decarbonisation
- Micro businesses report the strongest employee retention rates
June 2025: UK small and medium-sized enterprises (SMEs) are prioritising their people and the planet, despite their own economic pressures. 51% of SMEs have assisted staff during the on-going cost of living crisis, according to a survey by Purbeck Insurance Services , the UK’s only provider of personal guarantee insurance to small business owners. At the same time, as World Environment Day approaches on 5th June, almost two-thirds are introducing initiatives to reduce their carbon footprint.
With only a third of Britons describing themselves as financially comfortable, according to a recent YouGov poll, SMEs are stepping up to ease the burden on their staff. Despite facing economic headwinds themselves, these businesses remain committed to employee wellbeing. Among those offering support, 49% have reviewed employee salaries, while a similar proportion have provided cost of living bonuses.
Cutting carbon, not commitment
SMEs are also showing strong environmental dedication. Purbeck’s survey found that 64% are committed to reducing their carbon footprint, this is most likely to occur in firms run by younger people aged 25-34.
SMEs in the West Midlands are taking the most action on decarbonisation, while those in the North East are the least likely to introduce sustainability measures. Meanwhile firms with 100-249 are far more likely to be introducing environmental initiatives than smaller businesses with 1-9 employees.
In line with this year’s World Environment Day theme of cutting plastic consumption, the most common actions include reducing the amount of waste the business creates (45%) as well as setting up recycling programmes for materials, including plastic. Crucially, one in three SMEs taking environmental action is encouraging their staff to adopt sustainable procurement practices, thereby helping to embed sustainability across their supply chains and operations.
Great business practices, loyal people
As SMEs continue to demonstrate strong business practices they are winning the hearts and minds of their employees. Purbeck’s survey shows that staff retention remains healthy across the SME community, and it is the smallest businesses that are seeing the best results. 40% of companies with 1-9 employees describe their staff retention as ‘very good’, compared to just a quarter of businesses with 100-249 employees.
Comments Todd Davison, MD of Purbeck Insurance Services “It’s great to see that many UK small businesses are taking practical steps towards decarbonisation, while also looking after their employees, even though they are facing their own fiscal challenges. Doing the right thing does, however, often come at a cost. It is therefore vital to ensure that if a business loan becomes necessary, a personal guarantee for that loan is taken off the shoulders of the business owner/s through personal guarantee insurance. With the right financial backing, even the smallest businesses can play a meaningful role in working towards net zero without a negative impact on their cashflow or employee well-being.”
When securing a new personal guarantee backed loan, it is always advisable to secure personal guarantee insurance, meaning the business owners’ and directors’ personal finances won’t be at risk in the unfortunate situation of a business failure.
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