Small and medium-sized enterprises play a pivotal role in advancing sustainability, driving innovation, and influencing global efforts towards net zero emissions
Small and medium-sized enterprises (SMEs) as a whole are a substantial force. In sheer statistical terms, they represent nine out of ten businesses and more than 50 percent of global employment, giving them significant heft to influence the global net zero efforts.
SMEs can significantly accelerate our progress towards achieving net zero emissions by switching to practices that are considered sustainable as also by reducing their carbon footprints, driving innovation and contributing to the development of a resilient, low-carbon economy that benefits the environment and society as a whole.
During the recent London Climate Action Week, Nigar Arpadarai, the UN Climate Change High-Level Champion for COP29, emphasised her commitment to promoting fairness and helping SMEs adapt to climate challenges. SMEs, with their agility and local connections, can drive significant environmental change more effectively than larger corporations.
SMEs account for 60-70 percent of jobs in most OECD countries and 50-60 percent of value. In other words, their commitment to sustainability can drive economic growth, create new green jobs, and foster innovation in sustainable practices and technologies. By adopting sustainable practices, SMEs can influence larger companies and policymakers, activating the "ambition loop".
This concept describes the mutually reinforcing cycle where bold business actions encourage ambitious policy decisions, which in turn enable further business innovation and investment. SMEs’ proactive steps towards sustainability can push for stricter environmental regulations and standards, benefiting the entire ecosystem.
Fortunately, sustainability is increasingly becoming a key factor in consumer choices. Small and medium-sized enterprises (SMEs) that commit to net zero emissions and demonstrate their sustainability efforts can cultivate stronger relationships with environmentally conscious consumers, gaining a competitive edge in the market. Transparency in sustainability endeavours fosters trust and loyalty among customers, which holds immense value in today's market.
SMEs can leverage the comprehensive resources and tools provided by the SME Climate Hub and Race to Zero to accurately measure their carbon emissions, establish science-based targets, and monitor progress over time.
For instance, the Hub provides practical guides and resources that outline steps for reducing emissions in different areas of operations, such as supply chain management and energy efficiency. These resources enable small and medium-sized enterprises (SMEs) to engage with other businesses committed to sustainability, facilitating the sharing of knowledge and collaboration on innovative solutions to common challenges. Furthermore, the Hub helps companies align their external policy and engagement activities with their climate commitments, encouraging them to advocate for stronger environmental policies.