Summary of the Challenge
SMEs account for 99.9% of UK private sector businesses1 and represent a significant proportion of all business-driven emissions. In South Yorkshire, Industry and Commerce represent 31% of total emissions, with 85% of this figure attributed to SMEs.
SMEs as a group are challenging to decarbonise as they represent a large number of individual businesses of different sizes, from a wide range of sectors each with their own challenges, including financial constraints. There is no one size fits all approach.
Moreover, the impact of transition on businesses and employees is not felt evenly and will negatively affect some organisations if not adequately supported. For instance, SMEs that fit one or more of the following statements may be worse affected:
- Sectors that will face relatively greater decarbonisation challenges.
- SME owner-managers with demographic characteristics that place them at greater risk of marginalisation (e.g. ethnic minorities, LGBTQ+, people with disabilities, women).
- Sectors with greater levels of informal/precarious economic activity and employment practices.
- Smaller firms with more informal structures, who are (potentially) less able to act on ‘strategic’ challenges like decarbonisation.
However, SME transitions to sustainable operations remain essential for the region to achieve its net-zero targets. Policy interventions are needed to encourage and support this business group to start and sustain their own journeys to net-zero.
Our Response
Our research engages with organisations from five sectors through interviews and workshops to understand what a just transition means for SMEs in South Yorkshire. Our research aims to acknowledge that SMEs are drivers of change as well as being subject to change as a result of net-zero policies. We are particularly focused on engaging with SMEs that may have been overlooked in policy engagement and who might be vulnerable and marginalised in some way.
The project asks a key question, what does a just transition look like for South Yorkshire SMEs? Research will involve interviews and workshops with stakeholders to understand:
- What are the key challenges for SME decarbonisation in terms of existing energy use and practices?
- To what extent do SMEs see themselves as able to influence or participate in local decision-making (in relation to decarbonisation)
- Who do SMEs go to for advice and support and how do those connections influence perspectives on decarbonisation?
- How do SMEs see their roles as ‘civic actors’ as employers and members of communities? How does this influence perspectives on decarbonisation?
- How do policy stakeholders prioritise support and how do they understand challenges of reaching ‘hard-to-reach’ businesses?
Our findings will inform recommendations on how SMEs can be supported through their net-zero transitions by policy actors, government agencies and business support units.
Footnote:
1 Business population estimates for the UK and regions 2022: statistical release
