In a world increasingly characterised by environmental awareness and action, small and medium-sized enterprises (SMEs) are stepping up to address climate change. According to a recent survey conducted by the SME Climate Hub, a global initiative led by the We Mean Business Coalition, there’s been a noticeable shift in the attitude of SMEs towards reducing greenhouse gas emissions. However, while the willingness to engage in climate action is on the rise, several significant barriers remain, underscoring the necessity for increased support in terms of policies, funding, and information.

The annual survey, which draws participation from businesses across 44 countries and spans 25 sectors, revealed that for 44% of SMEs, climate action has grown in priority over the past year, with 53% maintaining their level of priority. This trend underscores the growing recognition among small businesses of the importance of participating in global efforts to combat climate change. Notably, this shift comes amid increasing pressure from stakeholders such as shareholders, investors, and customers, who expect businesses to adopt more sustainable practices. Compared to last year, SMEs are feeling an 11% uptick in the demand for climate action, a clear indicator of the changing business landscape.

However, the path towards sustainability is fraught with challenges for SMEs. The survey highlighted several barriers impeding their ability to take decisive climate action. A significant 52% of the 288 SMEs polled cited a lack of supportive policies and government-sponsored incentives as a major hurdle. Simultaneously, insufficient funding was flagged by another 52%, with 39% of respondents also pointing to a lack of data on their current emissions as a stumbling block. Other identified barriers included a shortage of time and a lack of skills or knowledge required to implement emission reduction strategies, each noted by 29% of the participants.

María Mendiluce, CEO of the We Mean Business Coalition, emphasised the pivotal role of small businesses in the transition to a clean and just economy. She called for an ‘all-of-society’ approach to empower SMEs to take more comprehensive climate action. This includes the development of support mechanisms by governments and incentivizing programs by financial institutions and corporate supply chain leaders, vital for enabling SMEs to overcome the barriers they currently face.

The SME Climate Hub’s survey illuminates the critical juncture at which SMEs find themselves in the broader climate change discourse. While there’s an evident commitment to embrace sustainable practices, the journey towards meaningful climate action is hampered by practical and systemic obstacles. This situation highlights the necessity for concerted efforts from various stakeholders, including governments, financial institutions, and large corporations, to facilitate SMEs’ contributions to combating climate change. As the backbone of the global economy, enabling SMEs to participate effectively in climate action efforts not only serves environmental goals but also fosters resilience and innovation within these businesses and the communities they serve.