New research from Cadent, the UK’s largest gas distribution network, and Thinks Insight & Strategy has revealed that small businesses are being pushed to breaking point by rising energy costs.
Two in five SMEs (39%) fear they may not survive the next five years, with half of businesses viewing heating as a luxury. Half (50%) admit that keeping their premises warm is becoming unaffordable, while more than a third (37%) say they have been left with no choice but to reluctantly pass rising costs on to customers.
The research, which is a continuation of Cadent’s annual Energy Diaries series, which explores how different consumer groups feel about energy usage, exposes the stark reality organisations face, with rising bills forcing many to freeze recruitment, cut staff or even scale sustainability investment.
As the ongoing challenges associated with the cost of living continue to impact millions across the UK, charities are similarly struggling, with many sacrificing essential services for energy cost savings. More than two in five (41%) charities report reducing or changing the services they offer.
The research also revealed that working towards a sustainable future is also taking a hit. While most small organisations believe sustainability is important, with steps taken where possible to implement sustainable behaviours, affordability is more of a priority.
According to the Energy Diaries report, SMEs are engaged with sustainability but feel they need more support to fully embrace changes, while charities are simply unable to prioritise sustainability.
Adele Lister, director at Thinks Insight & Strategy, said: “This is the fourth iteration of the Energy Diaries series that we have worked on with Cadent. Hearing from SMEs and charities this year about the challenges their organisations face has been eye-opening, and it’s been great to share ideas with them on how Cadent can help with the pressures of rising energy costs.
“SMEs and charities believe tips on how to reduce energy costs are normally reserved for consumers rather than businesses, so they welcome the prospect of having something directly tailored to small organisations.”
Dr Angela Needle, director of Strategy at Cadent, added: “SMEs and charities are vital pillars of our communities, and yet they are facing extraordinary challenges, with many doubting their ability to keep their doors open.
“Heating should not be considered a luxury, but our findings show that for half of SMEs and three in five charities, this is the stark reality.
“Rising costs are forcing difficult trade-offs, from cutting staff to scaling back vital services, and that has a knock-on effect on the people and communities who rely on them most. Our concerns are the impact on the most vulnerable in society.
“Our Energy Diaries series is part of our ongoing commitment to helping customers work towards a sustainable future.
“Now in its fourth year, this important set of insights shines a spotlight on the need for decisive action to address the energy burden and support these organisations in becoming more resilient.”
In response to the growing challenges, Cadent has partnered with Energy Saving Trust to equip SMEs and charities with actionable energy-saving guidance to reduce operational costs.
The free downloadable advice includes a breakdown of government initiatives – both national and local – as well as simple considerations like replicating the energy-saving behaviours used at home.
Angela continued: “We believe collaboration is key. By working with charities, policymakers and partners, such as Energy Saving Trust, we can provide the practical tools, advice and long-term solutions these organisations need.
“Our goal is to ensure that SMEs and charities not only survive the current crisis but are equipped to thrive and their needs are fully understood as part of the energy transition debate.”
For more information and to read the full 2025 Energy Diaries report, click here.
