Climate-Proofing SMEs: positive steps your business can take

At the recent COP30 climate conference, the COP29 Climate High-Level Champion launched the Climate-Proofing SMEs campaign, with some ambitious goals for driving climate action among small and medium-sized enterprises (SMEs).

The aims of the Climate-Proofing SMEs campaign

As part of the campaign, an open letter was sent to the world’s governments asking for a worldwide policy that supports SME climate action at the local, regional and global level.

The letter includes four key policy priorities:

• Recognise SMEs as a distinct group that is critical to climate action
• Contribute to and promote the business case for SME climate action
• Promote a streamlined pathway and centralised guidance for SME climate action and adaptation
• Mobilise accessible green finance for SMEs

SMEs make up 90% of all businesses globally, but have been underrepresented when it comes to climate action.

As the owner of a small business, you’re likely to face increasing pressure from your larger clients to accurately track, report and reduce your carbon footprints to ensure compliance with tougher global standards. This will be especially true if you’re part of a broader global supply chain where transparency on emissions will be key.

We’ve highlighted some steps you can take to support the Climate-Proofing SMEs campaign and do your bit for positive climate action.

Monitor your SME’s resource use and establish a baseline

Measure your energy, water and waste consumption so you have a better handle on the company’s key emission sources. This helps you find the operational areas that are having the most damaging impact and make plans for focused action to reduce these problems.

Setting a baseline for your resource usage helps you to track progress and quantify the financial benefits of efficiency improvements over time.

Where possible, decarbonise your operations

Focus on adopting cost-effective, clean technologies to replace any carbon-heavy operational processes. For example, you could switch to renewable energy suppliers for your power or install more energy-efficient machinery to cut emissions and carbon levels.

Even small changes, like optimising your logistics to work with local supply chains, can substantially reduce your company’s carbon footprint.

Integrate climate risk into your supply chain management

Engage with major suppliers and clients to understand and mitigate the climate-related risks that are currently part of your overall supply chain.

It’s vital to check that your sourcing practices prioritise suppliers with verifiable sustainability credentials, and that you supply similar credentials for your own customer audience.

Make greater use of green finance

Look for government incentives, concessional loans and targeted funding that’s designed specifically for SMEs to invest in mitigation and adaptation solutions.

Green finance can help to fund the upgrades and operational changes needed to cut your emissions and carbon footprint. The SME Climate Hub is an excellent place to start your research and find support materials and resources.

Measuring your emissions and carbon footprint is a key part of having responsible environmental, social and governance (ESG) reporting in place.