David Vs Goliath (SMEs vs Climate Change)

For the past two years, Nikhil Arora has been working hard to cut his organic gardening company’s carbon footprint. He has made a number of small changes which have helped his business to become more environmentally friendly.

The California-based company is small, employing just 21 people, but it expects to make roughly $100 million in 2018. Mr Arora says the moves his business has made are critical to fighting climate change.

“Small businesses are the lifeblood of the US economy.” says Mr Arora, co-founder of Back To The Roots Inc., who started selling organic gardening kits more than a decade ago. “We power most of the jobs, most of the growth and, therefore, I think we will also power most of the change.”

Corporate giants such as Amazon and Walmart have faced much of the public pressure over sustainability goals. But a company’s supply chain produces 11 times more emissions than the company on its own and corporations like Amazon produce 25 times more emissions when looking at their supply chains. With companies making up less than 1% greenhouse gas emissions, it’s clear that changes need to be made by smaller businesses.

“You can’t solve climate change without addressing small businesses,” says Michael Vandenber.

Advocates claim that focusing on supply chains and engaging with small businesses can make it easier to push for emissions savings.

“For an individual company, their relative impact is not very high,” says Simon Fischweicher, the head of corporations and supply chains for the CDP’s North America branch. “But when you think about the collection of tens, hundreds and millions of small enterprises that are suppliers to these large corporates, they’re incredibly important.”

So global value chains are one of the most effective tools in driving emissions reductions.

In a recent survey by the SME Climate Hub, two-thirds of small business owners said they were concerned about not being able to reduce their carbon footprint. About 70% said that in order to do so, they would need to access external funds.

The economic climate does not favor small businesses either as Pam Jouven, director of the SME Climate Hub says, this often makes sustainability their last priority.

“They’re having to face this perfect storm of rising energy prices, inflation and supply chain disruption,” she says. “It’s hard for them to make the time to add another project to the list.”

“On top of making it more difficult on a day-to-day basis, these increases also challenge their ability to invest in projects geared towards reducing carbon emissions.” 

Disruption can have many different effects on businesses especially those who are just starting up but thankfully, there is help available! “One day we hope it will be commonplace and accessible enough that even small business will start looking at how they might reduce their own value chain’s carbon footprint,” he says optimistically. “When we’ll start seeing supply chain decarbonisation adopted by smaller companies…that’s when we know we’re getting beyond the ideas.”