An Annual Fossil-deposition Report

Energy policy is being reconfigured as many countries learn, much faster than they expected, the sheer folly and reckless endangerment of relying on fossil fuels and the discreditable regimes that house and supply those resources into the future.

FREMONT, CA: One could argue that since 2022 has been such an unexpected year, there should be more optimism regarding the coming year. After all, optimism seems to be a trait we all possess that hasn't been depleted despite the passage of three years.

Additionally, the circumstance that has had the biggest distorting impact on 2022 namely, Russia's illegitimate invasion of Ukraine may also be the one that offers the most grounds for optimism. Many nations learned, far more quickly how frivolous and perilous it is to continue to rely on fossil fuels. The results of the most recent Linked Finance SME Confidence Index in this context were interesting. The promising news is that in Q3 2022, corporate optimism was still at a high level, at 59.7 per cent. Sadly, that is the lowest level since the fourth quarter of 2020.

Another encouraging statistic was that 32 per cent of SMEs thought Q4 business activity would increase, while 41 per cent thought it would stay the same.

There was a slight decline in business growth. 51 per cent of SMEs reported increased business activity in Q3 2021, compared to 36 per cent in the same quarter of this year. Another area where 2022 forced attention to focus more on a problem that, before Russia invaded Ukraine, had only been a background concern was energy. Up to 35 per cent of SMEs reported that they intended to invest in energy-saving measures during the following 12 months to offset rising energy prices.

The number does increase to 53 per cent for mid to big SMEs, which is also positive, but it would be much better if it were higher. Since they should consume more energy than their smaller equivalents, the gains in energy efficiency should be substantial.

The fact that half (49 per cent) of all SMEs considering investing in energy-saving measures aim to do so within the next three months is also essential to note. Therefore, there is good reason to be optimistic about 2023. More businesses are borrowing rapid cash to invest in energy upgrades to offset growing energy costs.

The rise in energy costs is proving to be the true pinch-point. Inflationary pressures impact firms with an increase in input costs in areas such as materials, rent, and food. SMEs are taking a proactive approach by increasing their energy efficiency to offset rising energy expenditures. The emphasis on energy efficiency is something that will benefit SMEs going forward. Even if energy prices decline, they will still be saving, which is good for both the nation and the environment.

Some of the problems will also be faced by several channel partners who come under the SME category. As a result of being in the same boat,  they should be better able to recognise and, hopefully, allay the worries and fears of their SME clients, strengthening their position as trusted advisors.