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Small-To-Mid-Sized Businesses Expanding Sustainability Goals

The battle to address the changing climate is fought on many fronts, and few are more important than in the business world. The private sector has an immense impact on the global environment, from the carbon pollution generated by huge multinational conglomerates to the containers used at mom-and-pop takeout joints. While many large corporations continue to make strides toward more eco-friendly processes, small-to-mid-sized businesses (SMEs) are doing their part as well.

It’s easy to overlook the importance of SMEs in the global response to climate change, but they will play a critical role. The World Bank estimates that SMEs make up roughly 90 percent of total businesses globally and account for about one-half of the world’s employment.

SMEs, typically defined as businesses with up to 250 employees, are deemed “central to green transformation” by the Organisation for Economic Co-Operation and Development (OECD), a global policy forum that promotes initiatives to improve the economic and social well-being of people around the world. The OECD estimates that SMEs represent 99 percent of all the businesses across its 37 member countries.

SMEs, like most businesses, have gained much greater awareness in recent years about the importance of sustainable practices, though much of their effort so far has been limited to a couple of specific areas.

A recent article published by WSP Global noted that small businesses “have focused their efforts on air quality and waste and water management,” while broader sustainability concepts such as carbon reduction have been given less priority. WSP cites the fact that only 12 percent of sustainability reports submitted to the Global Reporting Initiative’s Sustainability Disclosure Database are by SMEs.

That attitude is changing, however. Last year, a coalition of private and public organizations launched the SME Climate Hub, an innovative new climate action platform for SMEs aimed at reducing carbon emissions while also helping small- and medium-sized businesses gain a competitive edge.

The SME Climate Hub was made possible through a partnership between Amazon and the We Mean Business coalition. According to We Mean Business, a key part of the partnership is to mobilize SMEs and other supply chains “to take and scale-up measurable and direct action on climate change.”

The SME Climate Hub encourages SMEs to commit to cutting their greenhouse gas emissions in half by 2030 and reach net-zero emissions by 2050. SMEs that make the commitment will be globally recognized by the United Nations Race to Zero campaign. They can also take advantage of tools and resources to help them reduce emissions and build business resilience.

Meanwhile, many small businesses have adopted the Science Based Targets initiative (SBTi) as a way to reduce their GHG emissions and set credible targets that align with climate science. The SBTi is a partnership between the UN Global Compact, the World Resources Institute, the World Wildlife Fund, and CDP Worldwide, a not-for-profit organization that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts.

Not surprisingly, the movement by many SMEs to become more eco-friendly is being led by Certified B Corporations, which are required to meet high standards of social and environmental performance, public transparency and legal accountability to balance profits and purposes.

Nearly 1,000 B Corps have committed to NetZero2030, which puts them about 20 years ahead of the net-zero goal required by the Paris Climate Accord. One of the leaders of this movement is the B Corp Climate Collective, a group of Certified B Corporations that aims to identify concrete steps SMEs can take to reverse climate change.

“Accelerating climate change and ecological breakdown pose an overwhelming challenge to all life on Earth,” the collective states on its website. “Based on science and our lived experience, it is obvious to us that there is a climate and ecological emergency, an existential threat to which we much respond immediately.”


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