Corporate social responsibility is not exclusive to the top-earning enterprises of the world. Carbon neutrality is one of the ways small and medium businesses (SMEs) are unraveling their relationship with climate change — by attempting to reverse their impact.
SMEs are becoming the role model for ideal carbon neutrality planning and action. What strategies are causing them so much success when their funds and resources are fewer than more recognizable brands?
What Is Carbon Neutrality for SMEs?
SMEs worldwide are seeking carbon-friendly practices and recognition. Environmental buzzwords abound for all businesses entering the eco-conscious scene and carbon neutrality are among the most prevalent. It refers to when an enterprise eliminates as much carbon dioxide from the atmosphere as it creates. It begins with curbing Scope 1 emissions — what the company has direct control over — and eventually works its way to analyzing third-party and utility-related emissions.
An extension of this practice is net-zero, which expands its scope outside of carbon dioxide to all greenhouse gas emissions. Most will start with developing a carbon neutrality strategy, and growing into more complex greenhouse gas reduction and removal techniques.
SMEs are garnering press for becoming leaders in the carbon neutrality movement. Though SMEs do not emit as much carbon dioxide as Fortune 500 organizations, they set the example other corporations should follow. Their mindset and strategy execution will inspire other large and small businesses to more profound environmental awareness and positive impacts.
Structures like eco-friendly manufacturing and embracing a circular mindset with recycling are almost essential for SMEs to stay afloat. Environmental commitment increases brand loyalty, which even the most recent enterprises could use to overcome the inevitable hurdles in their first years.
How Are SMEs Making the Most Impact?
Numerous SMEs are part of larger value chains of big corporations. They lead the way to carbon neutrality because their efforts minimize the resistance and resources companies must use to track and manage their Scope 3 emissions. It should be a collaborative effort, with top-earning businesses assisting their supply chain’s packaging, recycling, energy and transportation processes to be greener. An SME’s shift translates to corporate and local growth through these changes.
SMEs also inspire obtaining employee buy-in for carbon neutrality standards. Reducing transportation through remote work, encouraging participation in carbon offsetting and providing incentives for green behaviors should motivate companies with higher revenues to see how they can change staffing dynamics to become even more carbon neutral.
The average carbon footprint of an individual is around 4 tons. However, developed nations like the U.S. have an equivalent of 16 tons per person. These figures demonstrate disparities worldwide that businesses must empathize with to reset their entrepreneurial mindsets. SMEs are the best at this, as the most prominent and influential lobbying efforts for systemic change echo from small and mid-sized companies and trade organizations more consistently than larger outfits.
Another way SMEs are becoming leaders in carbon reduction is by deconstructing their luxury facade. Renewable energy and circular economic practices have a hefty price tag — many of which are out of reach for SMEs. Starting small and leveraging gains to install more impactful solutions later highlights how carbon neutrality is a long game.
SMEs will not obtain the standard immediately — it is a series of gradual changes that compound. Seeing how SMEs prioritize and adapt to what they have dismantles the unattainable stereotype of the perfect, clean company.
Why Should SMEs Reach Carbon Neutrality?
The top 1% of earning corporations worldwide emit over 1,000 times more carbon emissions than the bottom 1%, which would encapsulate most SMEs. It makes some question the point of pushing for carbon neutrality efforts when major businesses should hold themselves accountable for creating the most damage. There are a few reasons SMEs must participate.
First, everyone must eventually obtain carbon neutrality — no organization is exempt from working toward greener operations. Dismissing the impact SMEs could have diminishes the value of eco-conscious efforts worldwide. It assists in setting a new standard for up-and-coming storefronts that need a low- or no-emissions model to use before they cut their ribbons.
Additionally, it accentuates the scalability of green initiatives. The actions of SMEs on a local level have a rapid domino effect, demonstrating how concentrated efforts will always trickle down to make green investments more valuable. If SMEs can achieve carbon neutrality with their resources, the world’s largest can inflate these strategies to suit their size.
It is particularly noticeable on the legal side when new legislation and compliance call for businesses to expose their climate-related risks, such as the U.S. Securities and Exchange Commission’s climate disclosure rules causing an uproar among corporate leaders. It requires monitoring, tracking, and achieving hard-to-reach goal metrics while leveraging data and technology to unlock carbon insights. SMEs may have less to collect but must meet an equivalent standard.
Small Businesses Paving the Way for Carbon Neutrality
If small businesses can implement eco-friendly methods, everyone else can. SMEs are beginning a carbon revolution. They are reducing their footprints to inspire communities and megacorporations to change their tune.
Their efforts directly impact their B2B partners, amplifying their green projects by reducing the impact of their value chains. Plus, they are connecting with regulatory powers to make their voices heard, creating long-term waves in their sectors.
Eleanor is editor of Designerly Magazine. Eleanor was the creative director and occasional blog writer at a prominent digital marketing agency before becoming her own boss in 2018. She lives in Philadelphia with her husband and dog, Bear.
