Two-thirds of SMEs say they lack resources to reduce emissions
A new survey from the SME Climate Hub has revealed the barriers small and medium sized businesses face as they look to reduce their emissions, with 68 per cent saying they lack the resources to act.
Nearly 200 members of the SME Climate Hub were surveyed, with 80 per cent saying they consider emissions reduction a high priority.
SMEs are often suppliers to larger companies, providing the services, products and resources that create the corporation’s end product. When a corporation has a large carbon footprint, much of that may actually stem from small businesses in their supply chain, making up the category known as Scope 3 emissions. According to CDP, supply chain emissions are 11.4 times higher than operational emissions, or the emissions produced within the corporation’s own walls.
In the near-term, SMEs are making efforts to cut their greenhouse gas emissions through reductions to energy consumption and waste (82 per cent), employee education (64 per cent), and upgrades to facilities and equipment (52 per cent). However, only 60 per cent of the SMEs in this category have a long-term emissions reduction plan in place.
The survey found that the most common barrier to SME climate action is a lack of resources, with 68 per cent of the surveyed businesses citing it as a concern. The lack of resources is related to issues with knowledge (63 per cent), funding (48 per cent) and time (40 per cent).
The second-most common reason cited was a lack of funding, which 48 per cent of businesses reported. 69 per cent of SMEs said they need access to external funds to reduce their emissions faster or at all. In contrast, only 34 per cent of SMEs report being offered a financial incentive to reduce emissions, while 60 per cent say they needed help securing this funding. Only 8 per cent of SME owners have received support from their banks.
Furthermore, 36 per cent of surveyed businesses said they needed support measuring emissions and tracking changes, especially in the supply chain.
“Taken on an individual scale, each small business has a relatively moderate carbon footprint,” said María Mendiluce, CEO of the We Mean Business Coalition, a founding partner of the SME Climate Hub. “However, together, these small businesses have a huge impact – both on the planet and on their communities. To limit the effects of climate change, and to create a just future that leaves no one behind, it’s imperative that every business, of every size, has the tools they need to prioritize climate action.”
The SME Climate Hub is a UN-backed initiative engaging small and medium-sized businesses in the Race to Zero. The SME Climate Hub, in collaboration with Normative and the Net Zero team at Oxford University, provides tools and resources to enable SMEs to make a climate commitment, take action, and measure their progress towards emissions reductions.
