SMEs represent roughly 90% of businesses and more than 50% of employment worldwide. They play a critical role in ensuring economic growth, job creation, and the sustainability of our cities and countries. SMEs also feature heavily in larger companies’ supply chains, and with changing regulations, there is an increasing need for these businesses to report on their scope 3 emissions and to decarbonise beyond their own operations.
SMEs play an essential role in carbon emissions reduction, so we need to understand the challenges they are currently facing to better support them on their sustainability journey. We conducted research into small business owners’ motivation to take climate action and some of the barriers in their way.
Download our report to uncover these unique insights, or keep reading for an overview.
Net zero means adding no more greenhouse gases to the atmosphere than the amount we’re removing.
Greenhouse gases—carbon dioxide being the main one—are harmful because they let sunlight pass through the atmosphere and prevent the heat from returning to space. Over time, this trapped heat contributes to global warming.
To avoid the worst impacts of climate change, we have to limit global temperatures to 1.5C above pre-industrial levels. To achieve this, we must reduce emissions by 45% by 2030 and reach net zero by 2050. As a result, many countries and businesses are pledging to meet net zero emissions.
Even the smallest businesses produce carbon emissions, whether it’s through transport or energy from their premises. In Europe alone, SMEs contribute up to 70% of industrial pollution in Europe. So, they have a crucial role to play in transitioning to a lower carbon economy.
Beyond reducing carbon emissions, a sustainable strategy can also help businesses increase efficiencies and, consequently, lower running costs. Plus, sustainable practices can help attract conscious consumers and investors, qualify for tax benefits, and help to build a more sustainable supply chain.
Our research shows that some of the main barriers SMEs face include the following:
Access to capital: Most SMEs need external financing to reduce emissions.
Low carbon literacy: Targets and reporting requirements are complex and require carbon literacy, which most small business owners do not have.
Lack of resources: Reporting also requires a significant time and financial investment.
Download our report to uncover more barriers to climate action for SMEs.
The emergence of new standards for climate-related finance disclosures means there is an increasing urgency for the financial sector to pivot towards being an enabler of climate action and emissions reduction.
Banks have the power to assist SMEs through several means:
Lending and investment consistent with credible emissions reduction, broader sustainability objectives and the various green investment taxonomies.
Offering a marketplace of support services for a net zero transition.
Supporting ESG reporting by using SMEs' transaction data to help them calculate their carbon footprint.
Download the report to discover more ways banks can support SMEs in the journey to net zero.
“You can’t manage what you don’t measure…” is a common phrase in business. It means that you can't know whether or not you’re being successful at something unless that success is defined and tracked. At Cogo, we believe that measuring is the starting point for achieving impact.
With recent demand around sustainability and the increasingly important role businesses have to play in the transition to a low-carbon economy, there is a significant opportunity for banks to lead the change and help businesses lower their carbon footprint.
Cogo’s research reveals that the higher someone’s carbon literacy, the greater the likelihood of them taking climate action. Read our latest report to uncover these original insights and discover how banks can improve their customer’s carbon literacy.
As we continue to connect with business leaders this week as part of the New Zealand Prime Minister’s Trade Delegation to Australia, our APAC CEO Julie Lindenberg reflects on her recent visit to Australia and the urgent need for businesses to lead the change when it comes to climate action.