Small and Medium-sized enterprises (SMEs) have been overlooked in climate policymaking according to an ECI researcher.
Along with other leading researchers from Sheffield Hallam University and the Open University, Dr Sam Hampton says the government needs to act urgently to rapidly scale decarbonisation efforts among SMEs to help achieve net zero targets.
It comes despite these businesses accounting for an estimated 99.2% of the UK’s total business as well as a significant amount of emissions from commercial and industrial energy use.
The group of experts reviewed existing provisions for SMEs to decarbonise as well as interviewed key stakeholders. This revealed stark differences in the amount and the quality of support available to SMEs with support programmes found to often be small-scale, piecemeal and poorly evaluated.
They said they uncovered impressive examples of provisions for decarbonising smaller businesses in some industry sectors as well as parts of the UK but overall support remains limited.
Meanwhile, decarbonisation pressures were found to vary significantly across sectors. For example, there is little regulation in hospitality compared with construction which faces global pressures and skills shortages, they said.
The authors argue that multiple crises – extreme weather events, geopolitical instability, supply chain disruptions and energy price rises – offer a unique opportunity for new policy approaches to accelerate SME decarbonisation.
This includes governance of SME decarbonisation playing a more prominent role in climate policy.
The group are now calling on the Government to ensure greater co-ordination between public and private initiatives, increased investment in SMEs as enablers of sustainability, and a redefinition of the relationship between SMEs, government and the public.
They want policymakers to implement flexible arrangements that empower SMEs to reduce emissions across their business operations and supply chains.
Dr Sam Hampton, researcher in the Environmental Change Institute at the University of Oxford, said:
SMEs form the backbone of every economy, and they therefore have a crucial role to play in addressing climate change. In times of economic, social and climatic turbulence, there is potential to change the conduct of business as usual, and responding to the demands of climate change is a core part of the ‘new normal’."