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In the fight against climate change, we need to 'Think Small First'

Credit: Sage

Steve Hare, Chief Executive Officer

Steve Hare, Chief Executive Officer | Sage

3 min read Partner content

SMEs are vital for the UK to achieve Net Zero. We need to remove the barriers that are preventing them from taking action.

Currently, over half of FTSE100 companies have Net Zero targets but only 1 in 10 SMEs are taking action to reduce emissions[1]. During the second week of COP26, we must not forget about the six million small and medium-sized businesses in the UK who are at risk of being left behind in the fight to protect our planet.

At Sage, we believe in the agility, resilience, and innovation of our small business customers who can significantly turn the green dial. SMEs hold the keys to unlocking the doors to climate action. They make up 99% of all businesses. They are our supply chains, our customers. Without them, our efforts to tackle climate change, will largely be wasted.

We are however making some progress.  Smaller companies are fully aware of the climate agenda and want to play their part. Globally, our research shows that 96% of SMEs want to have a positive environmental impact, and 9 out of 10 in the UK expect to make changes. However, barriers such as time, cost, and complexity, are preventing a shift in gear.  

That is why at this pivotal moment, not only has Sage pledged to be Net Zero by 2040, we have also committed to bringing our supply chain, largely made up of SMEs, along the journey with us. By joining forces with the International Chamber of Commerce (ICC) and the Association of Certified Charted Accountants (ACCA), we have published a new report which calls on the Government and big business to ‘Think Small First’ to enable SMEs to join the race to Net Zero. Announced last week at COP, the report sets out what policymakers and large companies must do to support a greener future, particularly around carbon reporting – an area which is increasingly being mandated by government and investors.

Without the expertise or dedicated resources, many smaller businesses are finding the task of measuring, disclosing, and reducing emissions extremely challenging. We need to see collective action from large corporates and government to remove these barriers by standardising, simplifying, automating, and enabling SMEs to navigate this increasingly complex landscape.

Government should start by adopting the principle of ‘Thinking Small First’ for any climate policy and endorse one international reporting framework. Large businesses need to play their part too by applying more consistent approaches and providing automation tools to help gather information quickly and more efficiently. Whilst companies like Sage can develop technology and offer training, governments can enable change by providing the right policy environment which makes carbon reporting practical and achievable for SMEs.

As world leaders and big businesses move towards Net Zero targets, we simply cannot overlook the significant role SMEs will play in the transition to a low carbon economy. At Sage, we believe we can play our part in knocking down existing barriers if we ‘Think Small First’ and unlock the power of SMEs.

For the sake of our planet’s future, it’s in all our interests to get this right.

To read more about our report ‘Think Small First: Enabling effective climate action by small and medium-sized businesses’ please click here.

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