Small Businesses Are Among Those Most Vulnerable To Disruption And Climate Change

By Outlook Planet Desk April 08, 2023

The majority of MSMEs require funding to take action about initiatives to reduce emissions

Small Businesses Are Among Those Most Vulnerable To Disruption And Climate Change
It is more difficult for MSMEs to follow through on their promise to sustainability.

Risks for organisations of all sizes are exacerbated by rising global temperatures and weather-related catastrophes. Yet, SMEs (Small and medium-sized businesses) are disproportionately impacted because of their centralised infrastructure, localised supply networks, and reliance on the communities in which they operate. Such businesses have also had the weakest capabilities to lessen their impact on the climate crisis. Small enterprises could potentially miss out on the advantages of increasing their level of resilience and cost-cutting while simultaneously being at greater risk. 

The SME Climate Hub has conducted an annual poll to help the initiative We Mean Business Coalition and the greater climate and business communities understand where small businesses are in their paths towards taking climate action. The poll got responses from 344 businesses across 40 countries, including India and 25 industries.

SMEs which account for 90 per cent of global trade, 70 per cent of global employment, and more than half of global income, are among the most susceptible to change and disruption, despite their overall effect. 

The poll revealed skills and knowledge (58 per cent), (55 per cent) lack of funds and (44 per cent) lack of time among the top reasons preventing SMEs from taking action on climate change. 

It noted that to take greater climate action, SMEs need (61per cent) tools for measuring and monitoring emissions, (60 per cent) financial support and (54 per cent) Network of peer companies to reach out to and learn from. 

Nearly 70% of respondents need funds to take action or speed up progress of their emissions reduction efforts. 

The survey notes that 22 per cent of small business owners believe that it will cost them less than $10,000 to achieve net-zero whereas 25 per cent feel that it will take them anywhere between $10,000 - 100,000 to achieve net-zero. 

The results demonstrate that public recognition, funding availability, and consumer demands are the top motivators for SME action. While 80 per cent of participants said they agreed that it was the correct thing to do, only 3 per cent thought it would help their company's reputation. Reducing waste is one of the top three strategies used by SMEs to cut emissions (76 per cent) followed by education of staff members to enable them to offer answers (71 per cent)  and modify their conduct (66 per cent).