Environmental advisor and solutions provider ClimeCo has partnered with carbon management platform Aclymate to help small-medium enterprises (SMEs) lower their carbon footprint.
- ClimeCo and Aclymate will provide simple and affordable carbon management services for SMEs.
- SMEs increasingly need to implement carbon management practices in response to client and consumer concern, but they often lack the resources needed to do so.
- SME demand for accessible carbon management services will continue to rise, building a new market for technologies and dissemination of best practice advice.
Aclymate’s free online application enables its clients to calculate their business’s emissions, access recommendations on improving their carbon footprint and purchase affordable offsets for emissions that cannot be avoided.
The partnership will see ClimeCo represented on Aclymate’s board of directors and helping to maintain its portfolio of offsetting projects. ClimeCo will also provide services such as ESG advisory to Aclymate users.
According to ClimeCo COO, Derek Six, “there are more than 30 million small businesses in the United States alone. Small business owners are passionate about being part of the solution to environmental problems”, but, “there were not any affordable and effective tools for these business owners to begin their sustainability journey”.
What barriers are preventing SMEs from engaging in carbon management?
Six’s observations are evidenced by a survey from the United Nations-backed SME-Climate hub.
Of 194 SMEs, 68% said they lacked the key resources they needed to reduce their emissions. Among the top five barriers were lack of funds, lack of skills and lack of time, while 36% of respondents said they struggled to measure and track their emissions.
This comes despite the overwhelming majority of the survey’s participants expressing their desire to take action.
Why should SMEs implement carbon management practices?
There are many reasons behind the motivation for SMEs to introduce carbon management practices.
For one thing, a low carbon footprint allows businesses to accommodate increasing consumer demand for sustainable products and services. A 2022 survey from IBM found that, within the past year, 49% of global consumers had paid an average premium of 59% for products branded as being sustainable or socially responsible.
This highlights the difference in revenue alone that could be gained by SMEs that are able to demonstrate some form of positive environmental action.
Potential operational savings, such as lower utility bills enabled by better understanding of where carbon emissions can be reduced, adds an additional financial incentive.
Beyond internal savings and a competitive advantage among consumers, SMEs can use carbon management practices to demonstrate a lower risk profile to investors, which is likely to unlock access to lower cost capital.
As investors are becoming increasingly aware of climate risks to their portfolios, new disclosure standards are being developed which will eventually be scaled to include SMEs in their requirements for monitoring and reporting their environmental impact.
Even before these standards are expected of smaller businesses, there may be a trickle-down effect as large corporations are subject to increasingly strict mandates – stemming from both stakeholder interest and government legislation – that will see them addressing external emissions from their supply chains.
These supply chains often include many SMEs, which will need to be able to lower their impact if they hope to maintain or secure contracts with larger companies.
Indeed, research from CDP indicates that supply chain emissions are, on average, 11.4 times higher than those generated within a corporation’s own walls. This suggests that, while major corporations are widely considered to be the worst offenders, a substantial share of their environmental impact is generated by external parties.
With the World Bank estimating that SMEs make up around 90% of businesses worldwide, their contribution to the total emissions of emissions intensive corporations must not be underestimated.
Although the individual carbon footprint of a single small venture may not seem too alarming on its own, together they combine into a major sector of the global economy that cannot be ignored.
This puts it in everyone’s best interest that SMEs begin implementing effective carbon management practices, likely leading to a rapid increase in demand for accessible services.
Addressing the demand for accessible carbon management
Dedicated technology platforms are also improving access to carbon management on the smaller scale required by SMEs.
Aclymate and ClimeCo are joined in offering technology based by solutions by the likes of Flowcarbon, which provides customised emissions reduction plans through offsets traded on its blockchain platform, and Tracesafe’s ShiftCarbon platform, which fractionalises carbon credits to allow smaller offset purchases.
Technology is also enabling carbon management to be integrated at different points within a business. ECommerce firms such as Stripe and Shopify, for example, allow smaller businesses to offset emissions on a purchase-by-purchase basis.
These solutions suggest that demand for accessible carbon management services will be accommodated both by enabling technologies and an increased understanding and dissemination of best-practice advice.
What will be crucial, however, is refraining from any oversimplification that could lead to smaller businesses lacking the scientific understanding required when setting effective emissions reduction targets.
Similarly, low-cost carbon credits should be treated with caution as, unless their source is transparent and verified, affordability could signal low quality and a lack of credibility.