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How SMEs can start their own net-zero journey

Elisa Moscolin, executive vice-president of sustainability and foundation at Sage. (Courtesy Sage)
Elisa Moscolin, executive vice-president of sustainability and foundation at Sage. (Courtesy Sage)

GUEST SUBMISSION: The federal government plans to reach net-zero by 2050, but who is responsible and can make it happen? There are many pathways to net-zero and Canada will have its unique one that will probably encompass a mix of government, corporates and citizen action.

However, if Canada wants to deliver on its net-zero targets, it will have to support and enable its small- and medium-sized enterprises (SMEs) to be part of that journey.

Although it is no news that fighting climate change requires collective action, SMEs are often left out from the plans to achieve net-zero. Yet they comprise 99 per cent of the world’s businesses and the world cannot reduce emissions without them.

There needs to be more focus on how they can play a significant role in achieving net-zero. The SME Climate Impact report tells us that 90 per cent of SMEs want to be greener but face disproportionate barriers from inability to measure and track emissions, complex reporting and policy frameworks to lack of resources and know-how, among other things. 

In the meantime, large enterprises are experiencing more and more pressure to deliver on their net-zero commitments and more broadly to keep up with ESG regulations.

This pressure is quickly trickling down to SMEs, who are serving corporates in Canada and risk facing barriers or exclusion from doing business unless they can demonstrate their own sustainability credentials. Therefore, even if only a small proportion of SMEs will fall into scope in the near-term for mandatory reporting regulations (like the Corporate Sustainability Reporting Directive, or CSRD), the effect of these regulations will be felt by all. 

So whilst we try to drive collective action, what can SMEs do today?

Start measuring footprint to understand where to take action 

SMEs are under increased pressure to report their carbon footprint to access supply chains as well as capital. Measuring is essential not only for reporting but most importantly for target setting – because if SMEs are not measuring, they don’t know what their action plan should be. 

There are many resources out there to get started like SME Climate Hub, a non-profit global initiative that provides guidance on how small businesses can set net-zero targets, measure their emissions and develop climate strategies.

In addition to reporting and setting meaningful targets, measuring emissions is also important to make a business fit for the future. By understanding its footprint, a business will identify and better understand its exposure to climate change risks and how they can be mitigated. For example, carbon pricing is likely to become a reality for all, so failing to reduce emissions now will result in increased costs of operations and reduced profit. 

Take small first steps, like considering efficiency

Energy efficiency is often the first and easiest action SMEs can take toward progress on net-zero targets.

This might mean something as simple as ensuring all lighting uses the most efficient bulbs available, or as significant as installing rooftop solar panels and heat pumps in place of gas boilers.

While going to net-zero can often seem like an overwhelming task, small but meaningful steps can ensure SMEs can set themselves up for success.

Forget the jargon

Another barrier to net-zero we need to knock down is the jargon. The net-zero agenda is an impenetrable jungle of hard-to-pronounce acronyms (EIF, CSRD, GRI, ISSB, etc.) – it can often feel like there’s a new one to know about every day! SMEs shouldn’t let the acronyms and labels paralyze them into inaction. They can forget the jargon and just focus on resilience.

This means thinking about the risks and opportunities to which their businesses are exposed. If a business is in the transport industry, it is probably already thinking about the impacts of a potential ban on diesel vehicles. If in manufacturing, disruption in supply chains will hardly be something it has never thought about. The reality is that many SMEs are probably already working on sustainability simply by trying to manage risks and make their business fit for the future.

Empower employees, they do care

SMEs may not be able to afford a team of sustainability experts, but it is very likely that their employees care and want to be part of the journey. A recent poll by ACCA Global found that more than 80 per cent of its members said it was important or very important for their organization to operate in an environmentally friendly and sustainable way.

SMEs should ensure they are building net-zero targets into their business plan, clearly communicate this to employees and ensure they receive appropriate training to take action. This includes: understanding what support they might need to manage the administrative burden of sustainability reporting; providing training on how they can both improve the efficiency of the business; and making data more accessible. 

Focusing on sustainability might appear overwhelming, particularly for SMEs, despite their resources and expertise. However, by initiating gradual actions, tracking advancements, and recognizing solidarity within a community, SMEs can unlock the significant benefits of safeguarding their business for the future while also contributing to the creation of a more sustainable global environment.

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