More Support, Financial Included…
Last November, the Hub launched Climate Fit, a step by step resource developed by the University of Cambridge Institute for Sustainability Leadership (CISL) and Business for Social Responsibility (BSR) to help small businesses learn practical skills to reduce their carbon emissions, covering topics of strategy and operations to governance and the supply chain.
And in order to address financing issues, the initiative, alongside BSR and CISL has released a financial support guide to improve access to financing for SMEs working to reduce their carbon emissions.
“We created the SME Climate Hub as a resource that’s accessible to small businesses around the world to help them in their journey to reach Net Zero by 2050 or sooner,” explains María Mendiluce.
“Our aim with the SME Climate Hub is to help millions of SMEs develop climate action plans – and to provide them with a commercial boost for doing so. We believe that the SME Climate Hub can play an important role in accelerating the race to a Net Zero future,” says Johan Falk, Co-Founder.
WEF View
The World Economic Forums believes that Net Zero requires both supporting SMEs and transitioning entire supply chains. It cites another report (there are plenty of these in this space) from HSBC finding that despite increasing numbers of large corporates making emissions commitments, delivering on Scope 3 remains a huge challenge.
The HSBC research is penetrating. It finds as much as $25-50 trillion of the estimated $100 trillion investment needed to deliver Net Zero supply chains will need to be directed towards SMEs and by association Scope 3.
Some HSBC Advice
HSBC advises SMEs understand that supply chains are asymmetric, with top-quality talent, education and resources at one end, and many smaller, less sophisticated SMEs along the chain in need of help. All need to collaborate to succeed; in other words, talk to partners.
Further, the green transition will expose skills and knowledge gaps, which will be greatest for SME suppliers. Capability development and training will help accelerate the shift. Seek out agencies or funds that will assist.
New partnerships will also be key. First, on sustainable supply chain finance programmes to increase SME access to finance. Second, with governments, development banks and others to create public and private partnerships that can scale and leverage funding for SMEs right through to deep tier suppliers; inform better policy making and drive innovation and greener business models.
“Despite the positivity of increasing numbers of large corporates making Net Zero commitments, the reality is that delivering on Scope 3 emissions will be extremely challenging unless urgent action to support SMEs is taken now,” says Natalie Blyth, HSBC Global Head of Trade and Receivables Finance.
Moving SMEs Through Their Journey
All in all, the SME challenge on climate is fascinating. SMEs haven’t endless resources and knowledge, nor necessarily vast sums of cash, nor easy access to massive loan facilities.
Yet they are resilient, can move very fast when required and are particularly adept at spotting market signals; their historical survival relies on doing so. And of course, they represent a massive proportion of global business and hence potential sustainable development.
They face what is arguably the most vexing and complex transformation ever to global business; climate change. New alignment and partnership seems the obvious answer.
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