Researchers call for urgent action to accelerate small business decarbonisation

9th October 2023

A group of leading researchers are calling for urgent government action to rapidly scale decarbonisation efforts among small and medium-sized enterprises (SMEs) to help achieve national net zero targets.

Researchers from the University of Oxford, Sheffield Hallam University and The Open University highlight that SMEs have been overlooked in climate policymaking despite accounting for 50% of UK commercial and industrial energy use*, representing a significant source of emissions.

They found support programmes for SMEs were often small-scale, piecemeal and poorly evaluated. The research also found decarbonisation pressures varying significantly across sectors from hospitality where there is little regulation, to construction and steel who face global pressures and skills shortages. 

The authors suggest that multiple crises - extreme weather events, the pandemic, increased geopolitical instability, global supply chain disruption and energy price rises – offer a unique opportunity for transformative policy approaches to accelerate SME decarbonisation.

The research argues that governance of SME decarbonisation must play a more prominent role in climate policy. 

The researchers call for greater coordination between public and private initiatives, increased investment in SMEs as enablers of sustainability, and a redefinition of the relationship between SMEs, government and the public. Researchers must also collaborate to provide robust evidence guiding effective 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’.

Richard Blundel, Professor of Enterprise and Organisation at The Open University said:

“Our reviews of existing provision and interviews with key stakeholders revealed stark differences in the amount and the quality of support available to SMEs.  We’ve seen really impressive examples in particular industry sectors and parts of the UK, but the overall picture remains fairly patchy.”

The findings are part of the Go Zero project, funded by the UK Energy Research Centre, and have been published in in the journal Global Environmental Change.