Engage your SME suppliers and customers
Table of contents

Engage your SME suppliers and customers

Explained by
SME Climate HubSME Climate Hub

Summary

Reduce Scope 3 emissions and drive a just transition by helping suppliers and customers commit to net zero. Use the SME Climate Hub to support them in measuring, reducing, and reporting emissions.

Key resources

Context

Addressing increasing GHG emissions across business sectors is a crucial aspect of tackling the climate crisis. Small and medium-sized enterprises (SMEs) are key actors in accelerating the global net zero transition. They make up 90% of businesses globally, employ 70% of the world’s workforce, contribute over 50% of the global GDP, and they are in a unique position: playing a key role in global supply chains as well as in local communities and economies.  

While most large companies have already launched decarbonization programs, many smaller businesses still do not have the expertise nor the resources to engage in decarbonization efforts and contribute to global emissions reductions. Therefore, a nuanced and pragmatic approach to SME climate action is essential—this includes how large corporates engage with the SME suppliers and customers.  

Large corporates often focus their initial supplier engagement activities on their most strategic and/or significant suppliers (ex. by spend, emissions etc). While a logical approach, this often means SMEs are left out of supplier engagement activities and are not asked to set and meet net zero commitments. In the 2024 SME Climate Hub survey, only 17% of SMEs surveyed said they were asked by a corporate customer to reduce emissions (1). 

If climate action is to become business as usual in supply chains, SMEs cannot be forgotten and left behind. If large corporates do not begin to engage them, SME suppliers and/or customers will not be prepared for incoming climate standards and requests which will result in their being pushed out of global supply chains. By proactively engaging and empowering them to take steps to reduce emissions and adapt to the impacts of climate change, SMEs will reduce their emissions and the Scope 3 emissions of their customers and buyers while increasing their own resilience and mitigating the impacts of climate change for local communities and economies. However, SMEs cannot be expected to meet this challenge alone and care needs to be taken to ensure that a disproportionate burden is not put on the businesses with the least resources to navigate the transition. SMEs need time to learn about climate action, build up their measurement capabilities, and make plans to take climate action.  

Global net zero will only be possible if all industries work to achieve net-zero emissions and if all stakeholders work together to establish a collaborative ecosystem to support SME climate action. By encouraging, supporting, and incentivizing SMEs in their value chains to take climate action, large corporations will demonstrate their climate leadership while catalyzing value chain climate action, reducing their Scope 3 emissions.  

The SME Climate Hub has demonstrated the critical need and appetite for free SME-focused content, tools, and resources, but more can be done to empower SMEs in their net zero journey. The SME Climate Hub encourages stakeholders, such as large corporations and financial institutions, to support and incentivize SME climate action within their value chains. 

The SME Climate Hub is an initiative of the We Mean Business Coalition, the global nonprofit catalyzing business and policy action to halve global emissions by 2030. The initiative was co-founded and is operated in partnership with the Exponential Roadmap Initiative and the UN Climate Change High Level Champion’s Race to Zero campaign. The SME Climate Commitment is the official pathway for SMEs to join the global Race to Zero campaign.

Solution

The SME Climate Hub provides free, user-friendly resources specifically tailored to small and medium-sized enterprises’ (SMEs’) needs, that help businesses with less than 500 employees to make a credible net zero commitment, take action, and measure and disclose their progress towards emissions reductions. The SME Climate Hub is also collaborating closely with an ecosystem of different organizations and stakeholders to standardize and streamline SME climate action. 

The resources and guidance available on the Mobilize Your SMEs page are designed to support stakeholders in understanding the SME Climate Hub’s vision, mission, and processes and in leveraging the free tools and resources to support SMEs to reduce their emissions and, in turn, the Scope 3 emissions of their customers and business partners.

Summary of recommended approach to engage SME suppliers and customers/clients once identified, with details to follow: 

  1. Select which SME Climate Hub information and resources to share with your SMEs.   

  2. Determine the best method for communication to reach your SMEs. 

  3. Consider incentivizing your SMEs to take climate action. 

Impact

Sustainability impact 

Climate

Scope 3   Leveraging the SME Climate Hub gives large corporates an opportunity to provide SMEs with an appropriate net zero pathway and the tools and resources needed to make a net zero commitment and measure, reduce, and report their emissions. Empowering SME suppliers and/or customers to reduce their emissions will result in Scope 3 emissions reductions for the large corporate. In addition, by pairing engagement of SME suppliers and/or customers with capacity building efforts and commercial incentives, large corporates can build inclusive supply chains throughout which climate action becomes business as usual for businesses of all sizes.  

Without adequate support, SMEs may struggle to adapt, facing immediate challenges and growing pressures that could undermine their long-term viability and hinder collective climate action (2). A fair, equitable, and just transition demands proactive measures to ensure that all SMEs, particularly those with limited resources or agency, have the support they need to transition to and thrive in a net-zero future. 

Business Impact

Benefits

  • Large corporations demonstrate climate leadership by supporting SMEs, catalyzing value chain climate action and reducing Scope 3 emissions

  • Inclusive, resilient supply chains are built, making climate action business as usual for all sizes of businesses

Costs 

The SME Climate Hub is a freely accessible resource, and there are no significant associated costs with leveraging the tools and resources on the platform to engage and support SMEs. 

Implementation

Typical business profile 

  • SMEs in any sector 

  • Large corporates engaging with SMEs in any sector 

Corporate supply chain emissions (Scope 3) are on average 26 times greater than operational emissions (Scope 1 and 2) (3), with most coming from companies’ purchase of inputs to their own production processes. The drivers of Scope 3 emissions differ for each subsector, which means that all companies need to engage with their suppliers and customers/clients to formulate and implement appropriate decarbonization strategies—this includes SME suppliers and customers/clients. 

Approach 

The SME Climate Hub welcomes anyone to share information about the SME Climate Hub and the free action tools and resources with SMEs in their value chain by leveraging the Mobilize Your SMEs page. 

The approach described below sets out how companies can leverage the resources of the SME Climate Hub to communicate with SMEs and provide links to key SME Climate Hub information and learning resources which may be useful to them. 

Summary of recommended approach to engage SME suppliers and customers/clients, with details to follow: 

  1. Select which information and resources to share with your SMEs.   

  2. Identify the best method for communication to reach your SMEs. 

  3. Consider incentivizing your SMEs to take climate action.

Select Which Information and Resources to Share 

The SME Climate Hub has a number of different resources available. To get started, you can review the information below and plan a learning journey for your SME partners sharing all or some of the resources, depending on your organization's needs and goals. You can then tailor the text in the Welcome Letter template or leverage the information from the options below: 

Introduce SMEs to the SME Climate Hub: 

You could start with an introduction of what the SME Climate Hub is and encourage SMEs to explore the SME Climate Hub platform for themselves.

The SME Climate Hub 

The SME Climate Hub is a global initiative that helps small and medium-sized enterprises (SMEs) - those with less than 500 employees - to make a climate commitment, take action, and measure their progress towards emissions reductions. All tools and resources on the SME Climate Hub are free and specifically equip the SME community to take climate action.  

The SME Climate Hub is an initiative of the We Mean Business Coalition, the global nonprofit catalyzing business and policy action to halve global emissions by 2030. The initiative was co-founded and is operated in partnership with the Exponential Roadmap Initiative and the UN Climate Change High Level Champion’s Race to Zero campaign.  

The initiative is also the key entry point for SMEs to join the Race to Zero campaign — an international campaign that brings together an unprecedented coalition of real economy actors and 120 governments committed to achieve net-zero emissions by no later than 2050.

Help SMEs Find the Right SME Climate Hub Action Tools and Resources: 

Climate action topics may be unfamiliar for many SMEs. Simply asking SMEs to make the SME Climate Commitment or to report through the SME Climate Hub may be difficult as many SMEs may not know how to get started. 

The SME Climate Hub action tools and resources support SMEs along their climate action journey from understanding basic climate-related topics, to calculating their GHG emissions, through to setting and implementing targets aligned with science.  

 All tools and resources are free and available to any SME regardless of commitment status.  

 

The SME Climate Hub Action Space 

The SME Climate Hub Action Space collates all SME Climate Hub action tools and resources as well as relevant external tools and resources in an easily navigable and accessible platform. Taking a modular approach, the Action Space categorizes resources and tools by level of effort and level of potential impact and allows SMEs to search by key topics such as the business basics, operational emissions and supply chains. More specific topics from finance to renewables are also available, making it easier for SMEs to find the information and guidance they need to take action. 

The SME Climate Hub Action Space includes a variety of simple and practical tools and resources to support SMEs along their climate action journey. Below are an illustrative list of tools and resources available along with a brief description: 

Action Courses

The SME Climate Hub Action Courses are free, practical e-learning courses that help small and medium-sized companies reduce their carbon emissions.

SMEs can learn tactical advice to reduce emissions in their operations and supply chains as well as how to secure financing for climate action and engage their community on it.

The Action Courses are self-paced for accessibility and cover topics such as:

Climate Action for Your Operations 

Climate Strategy and Governance 

Financing Net Zero Transition  

Action Guides

The SME Climate Hub Action Guides outline in simple and concise terms how SMEs can take action to reduce their emissions. The step-by-step guides are linked to the different categories in the SME Reporting Tool and provide concrete steps to address the majority of emissions across all scopes. Current Action Guides cover topics such as:

Setting Climate Targets 

Reducing Emissions from Office Buildings 

Switch to renewable Electricity 

Reducing Business Travel Emissions 

External Action Resources

In addition to SME Climate Hub-developed tools and resources, the Action Space includes external resources. All external resources included on the Action Space, are free, accessible and SME appropriate. For example:

1.5C Business Playbook – Exponential Roadmap Initiative (ERI) 

Swtich to Heat Pumps - WBCSD Climate Drive 

Fleet Electrifcation Solution Center – EDF Net Zero Action Accelerator 

Call on SMEs to make the SME Climate Commitment: 

You could invite SMEs to make the SME Climate Commitment. You will set the tone of urgency in the invitation and can decide if this commitment will be optional or required for your SME partners. 

The SME Climate Commitment 

The SME Climate Commitment is a public net zero commitment aligned with science and the requirements of the Race to Zero campaign. The Commitment process is free and includes a simple sign-up and due diligence process. The SME Climate Commitment is a great starting place for SMEs to immediately commit and start taking action on their Scopes 1, 2, and 3 emissions, and publicly report on that action to their customers or other stakeholders.

Call on SMEs to Report through the SME Climate Hub: 

To gather emissions data, understand an SME's progress towards net zero, and encourage transparency, you can request that SMEs report through the SME Climate Hub.

The SME Reporting Tool

Reporting is required annually for SMEs after they make the SME Climate Commitment. SMEs may also want to publicly disclose progress to key stakeholders including customers, banks, and employees, and to provide reports as a basis for establishing strategy and action. To facilitate these needs, the SME Climate Hub has developed an interactive reporting tool.

All reports are made publicly available on the SME Climate Hub website and can be accessed through Our SMEs page. 

Connect SMEs to SME Climate Hub Region and Country Pages: 

SMEs are often searching for climate action information and resources specific to the geography in which they or their operations are located. In cases where your SMEs are located in a specific region or country, stakeholders could consider directing SMEs to the SME Climate Hub’s region- or country-specific pages: 

India 

Latin America 

Middle East and North Africa 

The Nordics 

United Kingdom 

United States of America 

Highlight SME Climate Hub Case Studies and SME Stories: 

SMEs often want to understand SME climate action practices and learn from their peers’ experiences. The SME Climate Hub gathers and shares case studies and examples of how members of the SME Climate Hub community are taking climate action all over the world.  

SME Stories  

Determine the Best Method for Communication 

Next, in order to share the above resources, you should determine the best method of communication to reach your SME partners.   You should also establish who this information should come from and how frequently it should be delivered.  

Communications channels to consider: 

  • Direct email communication 

  • Online platform, such as a supplier portal or organization website 

  • Non-Interactive Contact, such as newsletters  

  • Open Events 

  • Interactive Meetings 

  • Webinars & Videos  

Consider Incentivizing Action  

Deploying incentives to drive SME climate action can be a powerful mechanism to accelerate progress. Incentive approaches can vary. Stakeholders should work to determine which measures are feasible within their organization, and how to implement them. Incentive mechanisms to consider:  

  • Recognition either publicly or amongst key audiences 

  • Sharing learnings and resources 

  • Providing free capacity building support or technical assistance 

  • Access to finance or funding 

  • Preferential financing terms 

  • Preferential business or contractual terms 

  • Implementing contractual and/or procurement requirements 

Incentives could be connected to an SME making the SME Climate Commitment, reporting through the SME Climate Hub, and/or completing SME Climate Hub courses and modules. Incentives should be clearly and consistently communicated to suppliers to ensure understanding of the requirements.