Survey: 2 in 3 SMEs don’t think they have skills needed for net-zero transition

90% of the businesses in the world are SMEs

The survey polled decision-makers at 194 of the Hub’s member businesses and was conducted last summer, with the results published today (22 February).

Promisingly, the survey revealed that most SMEs are keen to play their part in the private sector’s response to the climate crisis. Eight in ten respondents said reducing emissions across their business’s value chain is a “high priority”, with six in ten having already developed plans to reduce emissions. Most businesses (82%) reported that they already have plans to improve energy efficiency and reduce waste, while half are planning to upgrade facilities and equipment in a way that brings environmental benefits in the short term.

Moreover, most businesses reported that taking climate action is not only the right thing to do from a moral and ethical standpoint (96%), but that it will improve brand reputation (73%) and will help their business stand out from its competitors (61%). In other words, the mindset in which environmental sustainability and profitability are at odds is becoming less prominent.

But this does not mean that SMEs do not face significant barriers when taking climate action. The survey found that the biggest barrier to action is a lack of in-house skills and knowledge, which was raised by almost two-thirds (63%) of those surveyed. Key gaps include the measurement of a business’s baseline emissions across the value chain and the development and delivery of science-based pathways to reducing emissions. There are also knowledge and skills gaps pertaining to the climate risk and resilience side.

The second most common barrier revealed in the survey was funding. This was raised by half of the respondents.  Seven in ten businesses stated that they will need some level of external funding to deliver their sustainability ambitions, yet only 33% said they have been able to access an incentive scheme using public finance, and just 8% report having received support from their banks.

In releasing the survey results, which echo the findings of a growing body of research on this topic, the SME Climate Hub is emphasising the tools it has made available to members to tackle both of these barriers.

On skills and knowledge, the Hub has worked with the University of Cambridge Institute for Sustainability Leadership (CISL) and Business for Responsibility to develop a step-by-step guide called ‘Climate Fit’. On finance, the Hub produced a financial support guide, detailing what kinds of financing are available and how they can be accessed, as part of a partnership with CISL and BSR.

“To limit the effects of climate change and to create a just future that leaves no one behind, it’s imperative that every business, of every size, has the tools they need to prioritise climate action,” said the We Mean Business Coalition’s chief executive Maria Mendiluce.

“Taken on an individual scale, each small business has a relatively moderate carbon footprint “However, together, these small businesses have a huge impact – both on the planet and on their communities.”

The We Mean Business Coalition is one of the SME Climate Hub’s founding partners, along with the International Chamber of Commerce, the Exponential Roadmap Initiative and the UN’s Race to Zero Campaign.

Aside from the Hub, there are an array of other tools to support SMEs. In the UK specifically, the Government has provided guidance on how SMEs can and should measure and report emissions, following a call to action from Prime Minister Boris Johnson in May 2021.

Similarly, O2 and the British Chamber of Commerce last year launched an online hub enabling businesses to access practical information on how to approach the net-zero transition.

Sarah George