Small businesses struggling to make green moves

According to a new global survey, more small and medium-sized businesses are prioritising action on climate change, but many say they need greater support from governments and policies to accelerate their green transition.

The annual SME Climate Hub survey polled 288 companies across 44 countries and 25 sectors. It found that reducing greenhouse gas emissions grew in importance for 44% of respondents over the past year, and maintained the same level of priority for 53%. However, over half of the businesses cited a lack of enabling policies and incentives as a key barrier to ramping up their climate efforts.

Insufficient funding was cited by 52% of respondents, with 39% saying lack of data about current emissions was hampering action on climate change. A lack of time was seen by 29% as a barrier to action, while 29% suggested lack of skills and knowledge were impeding their ability to act.

The survey also found that executive support at small businesses had grown to match an increase in stakeholder engagement. Tangible benefits of taking climate action were also motivators for SMEs. 62% of respondents suggested reducing emissions had enhanced their business reputation, 53% said they had differentiated their business from competitors, with 40% saying they had achieved branding benefits and 30% suggesting they had won new customers.

On the other hand, 84% of respondents said they had not been offered any financial incentives to reduce their emissions. 10% noted they would need funding to start their climate action journey; 28% said funding would help expand their climate action; and 36% suggested funding would help accelerate action. Additionally, 63% of respondents said they had not been asked by stakeholders to reduce emissions.

María Mendiluce, CEO of We Mean Business Coalition and co-founder of the SME Climate Hub, says:

“As large corporate companies and governments increasingly call for action across their supply and value chains, they must go further, faster, to bring their small business suppliers and clients on board. This new survey from the SME Climate Hub shows that support mechanisms from governments and incentivizing programs from partners such as financial institutions and corporate supply chain leaders would enable small businesses to take more comprehensive action.”

Download the full report here.