An Evaluation of the Impact and Effectiveness of Environmental Legislation in Small and Medium‐Sized Enterprises: Experiences from the UK

With small‐ and medium‐sized enterprises (SMEs) accounting for 99.7% of the 4.7 million UK businesses, they can have a huge collective impact on the environment, which in turn is being increasingly regulated. This study investigated the impact and effectiveness of environmental legislation on UK SMEs as well as determining if ‘compliance’ results in improved environmental protection. Interviews were conducted with SME management, site staff, regulators, policy officials and support organisations. Forty‐four SMEs from the north‐west of England participated in the study, and overall a total of 99 individuals were interviewed. The study clearly indicates that the impact of environmental legislation on SMEs is overstated and impact increased commensurate with effort to comply and enforcement action. Only one of the SMEs studied had been prosecuted and only two had been inspected. Compliance issues identified in those SMEs subject to direct regulation did not correlate with previous compliance audits conducted. In general, SMEs had poor awareness of compliance issues; non‐compliance was only really recognised and acknowledged if identified by a regulator and only regarded as serious if prosecuted. Regulation of the environment is clearly only effective if complied with; understanding compliance levels can help measure the link between legislation and environmental protection. The effectiveness of environmental legislation can only be understood if SMEs are subject to regular regulatory contact. Recommendations to improve SME compliance control systems are provided. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.