Despite barriers, smaller companies make big strides in sustainability

For the most part, the growing list of sustainability-related regulations around the globe doesn’t demand as much from small and medium-size enterprises.

Many SMEs, however, are demanding more of themselves — for the good of the planet and for the good of their bottom line.

More than 7,600 SMEs have pledged their commitment to net-zero carbon emissions by joining the SME Climate Hub. A recent survey of member SMEs (under 500 employees), conducted by hub founder We Mean Business Coalition, captured a snapshot of why smaller companies have committed to climate action.

A survey-high 63% of responding SMEs said “it’s the right thing to do”, when asked to select motivations for climate action. Cost savings and return on investment, at 52%, was the next-most popular response.

Regarding top benefits of climate action, 62% said it enhanced business reputation, 37% said it met customer expectations and helped retain business, and 30% said it won new customers.

Other insights from the survey:

  • The percentage of SMEs that cited a “lack of skills and knowledge” as a barrier to climate action plummeted over the past year, down to 29% from 61% in 2023. Lack of policies/government-sponsored benefits and insufficient funding were listed as the top barriers (both at 52%).
  • While many SMEs have become more knowledgeable about how to take action, the funding concerns are exacerbated by this: 64% described their knowledge about how to fund climate action as “very poor”. Nearly 3 in 4 SMEs said they need funds to start or speed up emissions reduction.
  • The SMEs surveyed collectively rated their knowledge of how to reduce emissions as high and their knowledge of how to implement a strategy and track results as moderate. They rated as low/poor their knowledge about working with suppliers to reduce supply chain emissions.

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