A quarter (25 per cent) of Britain's small firms have not taken any steps to make their businesses greener and a growing number are recognising they are not environmentally friendly, according to research from the Open University.

More than half (52 per cent) of businesses believe they have some way to go before becoming 'environmentally friendly'. This is despite the fact that most firms (57 per cent) realise customers are becoming increasingly sensitive to green business issues.

The firms questioned cite several reasons for their lack of action. A fifth (21 per cent) blamed a lack of information on environmental issues and 12 per cent said they didn't fully understand the laws relating to 'green' business. A worrying 14 per cent said they didn't believe environmental considerations were relevant.

Of the actions taken by firms which have made moves to improve their green credentials, most relate to transport. A third (33 per cent) have cut down on non-essential business travel, however, just one in ten (11 per cent) have switched to cleaner fuels.

Similarly, only 14 per cent have started to make greater use of public transport and just one in ten (11 per cent) have cut down on air travel.

One in twenty (five per cent) have gone to the extreme of relocating to reduce their impact on the environment.

Future attitudes

When questioned about the future, the vast majority of firms (78 per cent) say they expect costs to rise over the next two or there years, as the pressure to go green mounts.

Stephen Pegge, head of communications, Lloyds TSB Business said: "This study seems to show that the potential cost of going green is a real worry for some small firms. However, those firms that are taking steps to change demonstrate that a lot can be done to make an impact - and these changes don't always cost the earth"

Current renewable energy schemes for businesses include:

Solar panels:

• convert light into electricity, supplying up to half of a business' energy needs over a year.

Wind turbines:

• can power a business, an entire building, even a small community.

Ground source heat pumps:

• Use underground heat to warm water or heat buildings

Biofuels:

• Are a carbon neutral source of energy, made from plants that absorb carbon dioxide, likely to be used as fuel for vehicles in the near future.

Solar water heating:

• Can produce half of hot water needs over a year, using light to heat water.