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THE OVERLOOKED GIANTS OF CLIMATE CHANGE adopt energy-efficient equipment, electrify their fleets or digitise their operations.
The cultural challenge may be greater still. Many small businesses operate on thin margins and short time horizons. For a family-owned manufacturer or a service provider in the informal economy, the upfront cost of solar panels or digital sensors can appear prohibitive.
Sindhu Kashyap, Senior Content Strategist, Middle East and Africa
Small businesses generate nearly half of global emissions. Unlocking their transition to sustainability could determine whether international climate targets are met.
mall- and medium-sized enterprises( SMEs) rarely garner the
S duplicate headlines as multinationals do. Yet, collectively, they are the backbone of most economies, and their environmental footprint is anything but modest. According to a new report from the World Economic Forum produced in collaboration with Schneider Electric, SMEs are responsible for between 40 % and 60 % of global business-sector greenhouse gas emissions.
For all the focus on corporate giants and state utilities, the climate fight will be won or lost in the workshops, warehouses and offices of smaller firms.
The report argues that accelerating the green transition of SMEs is not simply an environmental imperative but an economic opportunity. Too often, sustainability is cast as a cost centre, something small firms must grudgingly comply with under regulatory pressure. Reframed as a driver of innovation, productivity and resilience, sustainability could instead unlock value.
The WEF estimates that accelerating the adoption of clean technologies, efficiency measures and circular practices would not only reduce emissions in line with the Paris Agreement but also deliver competitiveness gains for millions of enterprises.
The obstacles are clear. Regulatory frameworks tend to be designed with large corporates in mind, leaving SMEs bewildered by paperwork and compliance regimes. Access to finance is another perennial problem. Banks and investors often consider small firms riskier, particularly when returns on green investment are spread over years rather than months.
The report calls for targeted financial instruments, ranging from concessional loans to blended-finance vehicles, that would lower the barriers for SMEs to
Education and technical assistance, therefore, matter as much as subsidies. Policymakers are encouraged to provide advisory services and toolkits that demystify the transition process. Larger corporates, for their part, could integrate sustainability criteria into their supply chain contracts, nudging thousands of suppliers at once.
Examples abound of what is possible. In parts of Asia, micro-enterprises have reduced energy costs by installing efficient cooling systems subsidised by local authorities. In Europe, SMEs participating in industrial clusters have pooled resources to invest in shared renewable energy plants. These initiatives show that when given the right incentives and partnerships small firms can move faster than many lumbering conglomerates.
The WEF’ s warning is that without such momentum, the world will miss its climate targets. With SMEs comprising over 90 % of businesses and accounting for more than half of global employment, their exclusion from the green transition would render international pledges ineffective. Conversely, their active participation could multiply the impact of decarbonisation strategies and transform entire value chains.
For governments and financiers, the message is blunt: sustainability is no longer a luxury for small firms but a necessity. Unlocking it requires regulation that fits their scale, funding that matches their needs and a narrative that recognises sustainability as a growth lever. Small firms may lack the clout of corporate titans but their collective weight makes them decisive actors in shaping a cleaner global economy. �
18 Intelligent SME. tech