Only three in 10 UK small business owners (31%) say they are using AI to support their enterprises – with 27% saying they either have no plans to use it, and a further 21% saying they don’t regard AI as relevant to their business - according to new research from Novuna Business Finance.

Of the majority of enterprises that have not embraced AI technology, sustainability issues emerged as a major concern – with 22% of small business owners worried about the energy and natural resources used by AI. These sustainability concerns were most strongly felt by small businesses in the West Midlands (36%), Scotland (31%), the East Midlands (28%), the North West (27%), Wales (22%) and Yorkshire and the Humber (20%).

By industry sector, small business concerns over the energy and natural resources used by AI were most strongly voiced in the following sectors: Media (43%), Education (33%), Transport and Distribution (28%), Medical Services (26%), Manufacturing (24%) and Agriculture (23%).

Concerns over the sustainability impact of AI come at a time when UK small businesses remain fully committed to sustainability, perhaps marking a divergence from some governments and major businesses that have been seen to dial down their relative commitments to Net Zero in recent years. The Novuna Business Finance data shows that 31% of small businesses rate sustainability as being core to their business culture and planning, with a further 38% of respondents saying they are taking practical steps this year to do their bit on sustainability. These steps include: improving policies and facilities towards packaging and waste / recycling for products and services (36%); creating jobs locally (17%); investing in new energy-efficient equipment and sustainable infrastructure (15%) - and reviewing the energy usage of their premises (14%).

With many small businesses prioritising job creation and positive community impact as important aspects of being a sustainable business, the Novuna Business Finance research suggests that some small businesses may also have concerns over the impact of AI on jobs. Of those small businesses that do not use AI, 59% said it was because their enterprise was built on the enduring power of strong human relationships.

Jo Morris, Head of Insight at Novuna Business Finance said: “The energy required to power AI is a concern for many of the SMEs we surveyed. It is predicted that AI use will lead to the equivalent of more than half of the UK’s total water usage in 2027, while electricity consumption by AI-driven data centres is set to triple to about 3% of global demand by 2030[1].”

“Technology remains important to UK small businesses, but our research suggests many business owners feel it has to be balanced with wider environmental and social considerations. Whilst the Government and larger companies invest or rely on AI infrastructure, many small businesses remain strongly committed to Net Zero and sustainability, and want the business sector to have an overall positive impact on society.

“The Government’s investment in AI aims to support economic growth and could benefit small businesses. However, not all firms are looking to embrace the technology. For many, personal relationships remain key, while the responsible use of energy and natural resources is also a priority. This may help explain why so many respondents expressed caution about using AI.”