Written by Graham Paul – Service Delivery Director
With over twenty years of experience in the energy sector, Graham leads service delivery, sales and marketing to enhance customer experience and scale TEAM’s carbon and energy services with a data‑driven, outcomes focus.
Environmental action is becoming increasingly established among small and medium-sized enterprises (SMEs), but new research highlights a significant gap between environmental ambition and measurable emissions reductions. However, just 20% have established emissions reduction targets and only 32% have emissions reduction initiatives underway.
The findings highlight an important challenge for businesses looking to make sustainability commitments into net zero progress.
Practical Steps to Reduce Business Emissions
The research suggests that SMEs are becoming more engaged with environmental management. Nearly 40% of those disclosing to CDP meet most or all of its basic environmental indicators, demonstrating progress in areas such as governance, risk management and transition planning.
However, putting the foundations in place is only the beginning. Without clear targets, accurate emissions data and practical reduction measures, it can be difficult for organisations to demonstrate tangible progress towards net zero.
Transition planning is one area where this gap is particularly clear. CDP found that 63% of SMEs either have a climate transition plan or expect to develop one within two years, but just 15% currently have one in place.
For SMEs with limited sustainability resources or expertise, implementing a carbon reduction strategy can be challenging. This is where support from net zero consultants, combined with an effective net zero software, can help organisations establish a clearer route forward.
Setting Credible Net Zero Targets
Setting an emissions reduction target gives an organisation something measurable to work towards. But credible net zero planning requires more than choosing a future date.
Businesses need to understand their current emissions, identify where the greatest opportunities for reduction exist and establish how progress will be monitored. Depending on their goals, organisations may also choose to explore recognised frameworks such as SBTi net zero targets to help inform their approach.
The CDP findings demonstrate how much scope remains for SMEs to strengthen this area. While environmental awareness may be widespread among those already disclosing, only one in five has an emissions reduction target in place.
Using Technology to Meet Targets
For organisations managing large amounts of energy and carbon data, a net zero software can play an important role in supporting the understanding of emissions reduction.
Having reliable data provides businesses with a stronger basis for understanding their emissions and monitoring progress over time. It can also help organisations identify where action should be prioritised rather than treating net zero as a collection of disconnected environmental initiatives.
This is particularly relevant for SMEs where sustainability responsibilities may sit alongside several other roles. A structured net zero service, supported by specialist expertise and appropriate software, can provide the additional resource needed to develop and maintain a practical carbon reduction strategy.
SMEs Cannot Make the Transition Alone
There is also a wider supply-chain element to consider. CDP’s research found that suppliers are 52% more likely to reduce their annual emissions when buyers provide financial support compared with training alone.
That finding highlights the role larger organisations can play in helping suppliers translate climate expectations into action. Rather than simply asking SMEs to provide carbon data or demonstrate environmental commitments, organisations can consider how they support suppliers in developing the capability needed to reduce emissions.
This matters because SMEs collectively have a significant role to play in the transition. CDP’s research describes SMEs as accounting for approximately 90% of businesses globally and 60% of global business-related emissions.
What Action can Businesses Take to Cut Emissions
The positive message from the research is that businesses are engaging with environmental issues. The next challenge is ensuring that engagement delivers measurable results.
For SMEs unsure where to begin, working with an experienced net zero consultant can help turn broad sustainability ambitions into an achievable strategy. This could include establishing an emissions baseline, identifying reduction opportunities, developing appropriate targets and creating a roadmap for monitoring progress.
Combining expert net zero consultants with a net zero software can also provide organisations with both the strategic guidance and data needed to maintain momentum.
Ultimately, environmental progress is encouraging, but the success of the transition will depend on businesses moving beyond commitments and governance towards measurable emissions reduction.
For SMEs, the priority should be to demonstrate environmental intent and take a credible, data-led route to ensure emission reduction.
To understand the best way for SMEs to actively reduce their business carbon emissions, explore our guide.