Customer expectations driving SME climate action

Small and medium-sized businesses are accelerating efforts to address climate change, driven primarily by customer expectations and the need to remain competitive, according to a new global survey.

The 2025 SME Climate Hub survey found that 61% of small and medium-sized enterprises (SMEs) are taking climate action in response to customer demand – up from 40% last year. More than half said it helps attract new customers and stand out from competitors, with both figures also showing significant increases from 2024.

Conducted across 53 countries, the survey gathered responses from 471 businesses within the SME Climate Hub’s global network. Over half of the responses came from the United Kingdom, followed by the United States, Spain, India, and Australia.

Beyond customer expectations, SMEs cited regulatory compliance and risk management as key reasons for stepping up climate efforts. Sixty per cent said complying with current or anticipated climate regulations was a motivating factor – up from 37% last year – while 58% pointed to the need to protect their businesses from climate-related impacts such as extreme weather, supply chain issues, and rising costs.

Pamela Jouven, director of the SME Climate Hub, comments:

“SMEs aren’t waiting for action—they’re leading it. Small businesses are integrating sustainability into their business plans because it fuels growth, strengthens resilience, and helps them stay ahead of evolving regulations and supply chain requirements. The momentum is there, but SMEs need better financial and policy support to reach their full potential.”

While momentum is growing, the survey also revealed persistent financial and policy challenges. Eighty per cent of respondents reported receiving little or no government support for climate initiatives, and only 4% rated existing support as strong. Nearly two-thirds said improved incentives—such as tax breaks and access to affordable financing—would help them expand their efforts.

María Mendiluce, CEO of the We Mean Business Coalition, adds:

“SMEs prove that sustainability is a smart financial investment. The SME Climate Hub is doing its part, but governments and financial institutions must step up with funding, regulations, and incentives that empower small businesses to scale their climate actions.”

The SME Climate Hub supports small businesses with tools and resources to measure and reduce emissions. It is part of a broader initiative by the We Mean Business Coalition and affiliated climate organisations to align SMEs with global climate goals.