The Government must act urgently to rapidly scale up decarbonisation efforts among small and medium-sized businesses (SMEs) to help achieve national net-zero targets, leading researchers have warned.
The group, from the University of Oxford, Sheffield Hallam University and the Open University, said SMEs have been overlooked in climate policymaking.
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.
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.
Will Eadson, Professor of urban and regional studies at Sheffield Hallam University, said: “The turbulence created by multiple global crises is providing new opportunities to engage SMEs on environmental issues and raise expectations for their role in climate action.
“We urge policymakers to implement flexible arrangements that empower SMEs to reduce emissions across their business operations and supply chains.
“SMEs have undeniable potential for climate action through their influence on behaviours and markets.”
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’.