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New survey reveals climate action is climbing the list of priorities for smaller business, but key political and financial barriers are slowing progress
Small and medium sized businesses (SMEs) are keen to play a role as "nimble changemakers" in the net zero transition, but their efforts to decarbonise are being hampered by a lack of targeted policies and funding support from government, according to new research from the We Mean Business (WMB) coalition of leading corporates.
Published today, the survey from the WMB-led SME Climate Hub found more small businesses are prioritising climate action, with 44 per cent of respondents saying the issue rose up their list of priorities last year and 53 per cent saying it maintained the same level of importance. Moreover, SMEs said they were seeing increased pressure to take climate action from shareholders, investors, and customers.
The study of SMEs across 44 countries and 25 sectors also found that businesses taking climate action saw tangible benefits. For example, 62 per cent of respondents suggested reducing emissions had enhanced their reputation, just over half said it had differentiated them from competitors, and 40 per cent claimed they had achieved brand benefits. Thirty per cent claimed they had won new customers thanks to their decarbonisation efforts.
Yet despite these positives, 52 per cent of the SMEs polled claimed a lack of policy or government-sponsored incentives and benefits had inhibited climate action, while insufficient funding was similarly flagged as a challenge by more than half of those quizzed.
Four-in-five respondents said they had not been offered any financial incentives to reduce their emissions, while 10 per cent claimed they would need funding to start their climate action journey.
Moreover, 39 per cent of SMEs said lack of data about current emissions was hampering action on climate change, while a lack of time was seen as a barrier to action by 29 per cent of respondents. A similar percentage also suggested lack of skills and knowledge were impeding their ability to act.
"In order to transition to a clean and just economy, we cannot leave behind small businesses and the communities they serve," said María Mendiluce, CEO of WMB coalition and co-founder of the SME Climate Hub. "Small businesses are the nimble changemakers we need to push climate action forward, but we need an all-of-society approach that enables this action. To successfully meet our climate action goals, collaboration across financing, government, the NGO community and large businesses is essential."
She added that the onus was on large corporate companies and governments to help small business suppliers and clients decarbonise.
"This new survey from the SME Climate Hub shows that support mechanisms from governments and incentivising programs from partners such as financial institutions and corporate supply chain leaders would enable small businesses to take more comprehensive action," she said.
Sarah Goodell, founder of the US-based branding and design small business Autumn Dahlia Creative Services, said that taking action against climate change is not just an environmental necessity, but a smart business move.
"Businesses can do good for the planet, set a great example for others to follow, and often improve their bottom line," she said.
"By prioritising the planet, businesses can increase brand loyalty among eco-conscious consumers, and find cost savings in more efficient, sustainable practices. Every company has the power to make a difference, no matter the size of their business."
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