Small businesses, big impact: SMEs driving the Race to Zero

By Climate Champions | June 24, 2024

Small and medium-sized enterprises (SMEs) are pivotal in the Race to Zero. Representing 90% of businesses and more than 50% of employment worldwide, their collective power and potential are immense. By adopting sustainable practices and reducing their carbon footprints, these enterprises can significantly accelerate our progress towards net zero emissions, driving innovation and fostering a resilient, low-carbon economy that benefits both the environment and society at large.

UN Climate Change High-Level Champion for COP29, Nigar Arpadarai reiterated this today at the start of London Climate Action Week. As part of a commitment to driving equity, she announced a focus on helping SMEs strengthen their ability to adapt to climate challenges and bridge the gap between the need for, and availability of, new technologies and resources.

As London Climate Action Week gets underway, and we celebrate the fourth anniversary of the Race to Zero, discover the significant role that over 6000 SME members play in the Race and three inspiring SME members taking bold action.

SMEs are uniquely positioned to drive significant environmental change due to their agility, innovative capabilities, and deep connections within local communities. Unlike larger corporations, SMEs can often implement changes more quickly and effectively.

SMEs contribute significantly to the economy, accounting for about 60-70% of jobs in most OECD countries and 50-60% of value added. Their commitment to sustainability can drive economic growth, create new green jobs, and foster innovation in sustainable practices and technologies. By adopting sustainable practices, SMEs can influence larger companies and policymakers, activating what we like to call the “ambition loop”. This concept describes the mutually reinforcing cycle where bold business actions encourage ambitious policy decisions, which in turn enable further business innovation and investment. SMEs’ proactive steps towards sustainability can push for stricter environmental regulations and standards, benefiting the entire ecosystem.

Fortunately, sustainability is increasingly becoming a key factor in consumer choices. SMEs that commit to net zero and showcase their sustainability credentials can build stronger relationships with environmentally conscious consumers, gaining a competitive advantage in the market. Transparency in sustainability efforts fosters trust and loyalty among customers, which is invaluable in today’s market.

To support SMEs on this journey, the SME Climate Hub and the Race to Zero campaign provide essential support and resources for SMEs aiming to reduce their carbon footprints. SMEs are guided by the comprehensive resources and tools provided by the SME Climate Hub and Race to Zero, enabling them to measure their carbon emissions accurately, set science-based targets, and track progress over time.

The Hub, for instance, offers practical guides and resources that outline steps for reducing emissions across various aspects of their operations, from supply chain management to energy efficiency. Through these resources, SMEs can connect with other businesses committed to sustainability, facilitating knowledge sharing, and collaboration on innovative solutions to common challenges. The Hub also helps businesses align their external policy and engagement activities with their climate commitments, encouraging them to advocate for stronger environmental policies.

SMEs in action

Wild Clouds

Sustainable fashion brand, Wild Clouds, has committed to achieving net zero emissions by 2030 as a member of the Race to Zero campaign. Embracing a slow fashion ethos, Wild Clouds creates timeless, well-made clothes from organic cotton and linen, with every component being 100% natural, sustainable, and compostable. Their journey towards net zero involves optimizing transport networks, integrating recycled and regenerative fabrics, and measuring Scope 1 and 2 emissions. By 2030, they plan to hire a Head of Sustainability to further embed sustainable processes across the company, ensuring their entire business ecosystem moves towards the same environmental goals. Read more here.

Frog Bikes

Frog Bikes, a company dedicated to creating sustainable children’s bicycles, is on a mission to achieve net zero emissions. As part of the SME Climate Hub and the Race to Zero campaign, Frog Bikes has committed to reducing its emissions by 50% by 2030 and achieving net zero by 2050. They address emissions across all scopes, using post-consumer recycled aluminium, reducing plastic use, and implementing energy-efficient measures in their factory. Their short-term goals include incorporating 25% post-consumer recycled aluminium into their best-selling bikes, while their long-term vision involves refurbishing and reselling old Frog Bikes to extend their lifecycle and reduce waste. Read more here.


VMI, a camera rental company for the TV industry, joined the SME Climate Hub and committed to the Race to Zero in June 2021. They focus on transitioning their van fleet to electric or hybrid vehicles, investing in solar panels to generate their electricity, and eliminating landfill waste and single-use plastics. VMI has already cut CO2e emissions by 50%, two years ahead of schedule, and continues to push for more reductions. Their commitment to sustainability has not only improved their business but also engaged their clients and staff, demonstrating that climate action and business success go hand in hand. Read more here and here.

Spotlight on London 

London, as a global financial and cultural hub, plays a significant role in the Race to Zero. The city is home to a vast number of SMEs that are integral to its economic fabric. These businesses are increasingly recognizing the importance of sustainability and are taking bold steps to reduce their carbon footprints. As we celebrate London Climate Action Week, and the fourth anniversary of the Race to Zero, let’s take a closer look at how London supports its SMEs – the lifeblood of the city’s economy – in their journey towards sustainability.

Initiatives such as London’s Better Futures+ Programme support small and medium-sized businesses in London to become more sustainable. This programme provides SMEs with access to expert advice, resources, and funding opportunities to help them implement green practices and technologies. The Mayor’s Climate Action Fund supports community-led projects aimed at reducing carbon emissions and promoting sustainability across the city. SMEs can apply for grants to finance their green initiatives.

Collaborative networks like the London Sustainable Development Commission and the London Chamber of Commerce and Industry’s Green Growth Platform provide opportunities for SMEs to collaborate on sustainability projects, share best practices, and influence policy. Regular events and workshops organized by the Greater London Authority and other stakeholders offer SMEs practical insights and training on topics related to sustainability, such as energy efficiency, waste reduction, and sustainable supply chain management.

SMEs have a significant role to play in the Race to Zero. Their ability to implement changes quickly and innovate makes them powerful agents of change. By committing to reduce emissions, SMEs can influence larger companies and activate the ambition loop, where policy and business reinforce each other to accelerate climate action. The collective impact of SMEs taking bold steps towards sustainability can drive meaningful progress towards global net zero targets, showcasing the importance of every business, regardless of size, in the fight against climate change.

Find out more and join the Race to Zero 


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