The gates are open for small and medium-sized businesses to join the Race to Zero

By Majda Dabaghi, International Chamber of Commerce, Johan Falk, Exponential Roadmap Initiative, and Maria Mendiluce, CEO, the We Mean Business coalition | October 28, 2020

The science is clear – in order to meet the goals of the Paris Agreement, we must halve greenhouse gas emissions by 2030 and achieve net zero greenhouse gas emissions by 2050. Business of every size, sector and geography has a role to play if we are to achieve our collective goals. 

An incredible 90 per cent of business worldwide is carried out by small and medium sized enterprises (SMEs) and these businesses employ over two billion people. SMEs are truly the backbone of our global economy and yet have been largely left out of climate action initiatives to date.

The newly-launched SME Climate Hub has been created to tackle this lacuna in global climate efforts head on. Simply put, we can only drive emissions reductions at the scale needed to meet the Paris Agreement if climate action becomes everyone’s business – and that means starting with the SMEs at the heart of every community, in every country the world over. 

The pure economic rationale for launching the SME Climate Hub in the wake of the Covid-19 crisis could not be clearer. Disruptions to the supply of essential goods over recent months have clearly shown the imperative to build bottom-up resilience to external shocks in global supply chains. SMEs that have proven so vulnerable to the demand shock and workplace disruptions caused by the pandemic, are in the main no better equipped to deal with climate-related disruptions to business continuity. We also need to be fully mindful of the severe constraints that many SMEs are now operating under as a result of the economic hardship wrought by Covid-19. Deep support is needed to help build business resilience.  

To this end, the SME Climate Hub creates an ecosystem to enable SMEs to leverage climate action as a powerful means of increasing their competitive advantage. It demonstrates how taking action on climate can help companies win and retain business – especially from those large companies that are trying to decarbonise. It also shows how climate action helps to manage business risk, reduces costs by improving resource efficiency, and enhances access to capital since investors have a growing concern about their portfolios’ recognition of climate related risk.

We urge all small and medium-sized companies to commit to halving greenhouse gas emissions before 2030 and reaching net-zero emissions before 2050 through the SME Climate Hub. As well as experiencing the multiple business benefits of taking climate action, SMEs making this commitment will be globally recognised by the United Nations Race to Zero campaign. To date, nearly [100] small and medium-sized companies from [X] countries have made the SME Climate Commitment on the SME Climate Hub. Our aim over time is to have millions of SMEs signed up to take climate action creating a tipping point for a net zero emissions future that is good for business, the community and the global economy. 

Among the early adopters, is CEO of Houdini Sportswear, Eva Karlsson, who has shared her pride on making the SME Climate Commitment in this way: “The critical transition we collectively have ahead of us will require commitment and speed like never before, collaboration across sectors, disciplines and continents. That is why we are part of the Race to Zero community and proud to join this pioneering global platform.” 

In the coming weeks, the SME Climate Hub will provide accessible tools and tailored resources to help SMEs reduce emissions and build business resilience, as well as help get green solutions to market – alongside opportunities for businesses to unlock direct commercial incentives.

And importantly, several major multinational corporations – including Ericsson, IKEA, Telia, BT Group and Unilever – that have set targets to reach net-zero emissions in their value chains have committed to support the SME Climate Hub through a new ‘1.5°C Supply Chain Leaders’ group. These companies have made a firm commitment to include climate-related targets and performance in their supplier purchasing criteria. They have also pledged to work with the SMEs in their supply chain to deliver net-zero greenhouse emissions before 2050. Given their own experience with cutting emissions, they will also be providing concrete tools, sharing knowledge and exchanging best practices for implementing robust climate strategies through the SME Climate Hub.

Another early adopters of the SME Climate Commitment is Maria Fernanda Garza, CEO of Orestia. Speaking on the rationale for making the commitment, Ms Garza said: 

“We are seeing more and more multinationals taking climate action and committing to make their entire value chains more sustainable. For SMEs like Orestia that are part of these value chains, acting on climate change is quickly becoming a license to operate and satisfy customer demand. Demand is also coming from employees, consumers, investors, shareholders. We simply need to move with the times and stay ahead of the curve.”

The International Chamber of Commerce (ICC), the We Mean Business coalition and the Exponential Roadmap Initiative teams alongside the United Nations Race to Zero campaign have developed the SME Climate Hub to both mobilise and support to develop climate action plans – and to provide them with a clear commercial boost for doing so. Those that take part will position themselves to become the most attractive suppliers to the hundreds of multinationals with decarbonisation plans, as well as to the growing number of investors now addressing climate related risk, not to mention to the growing climate conscious customer base. 

If you are a business with less than 500 employees, the gates are now open for you to join the Race to Zero

Majda Dabaghi is director for green and inclusive growth at the International Chamber of Commerce, Johan Falk is co-founder and head of the Exponential Roadmap Initiative and Maria Mendiluce is CEO of the We Mean Business coalition.

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