The challenge

UK SMEs face major challenges dealing with numerous and varied sustainability data requests from large corporates and financial institutions. There is currently no agreed and comparable process for SMEs to report GHG emissions and sustainability impacts to customers across industry, finance, and Government procurement processes.

This lack of standardisation affects the reliability and comparability of SME data, impacting their participation in sustainability reporting and green finance initiatives. A unified approach is essential for ensuring SME data is accurate, comparable, and compatible with larger corporate and regulatory requirements. There is an imperative to seek consensus on SME sustainability attributes and ensure this is driven by not only what major corporates & financial institutions are asking for, but the quality data that SMEs are in possession of. 

Links to research reports, briefs and articles setting out this challenge and informing our thinking can be seen in the table below.

The solution

B4NZ is leading a dedicated workstream, collaborating with key industry partners to: 

  • Make recommendations towards a proportionate, comparable and interoperable sustainability (Including emissions) data reporting framework and underlying data requirements. 
  • Define standard rules and guidance for SME applicability and an SME data quality framework. By working on a bottom-up approach, we can identify potential additional reporting requirements depending on size/sector, as well as ensuring interoperability with international reporting requirements for larger corporations.

SME Sustainability Data Taskforce Working Session Summaries:

SME Sustainability Task Force Terms of Reference

SME Sustainability Data Taskforce Observer Members

Name Author Description
Accelerating Progress: Empowering SMEs on the journey to net zero Federation of Small Businesses This report showcases the extent to which SMEs are willing but unable to act in the face of climate crisis.
Bank Action Guide: Including acutely vulnerable SMEs in a just transition to net zero Cambridge Institute for Sustainability Leadership This policy paper presents the findings of a 2023 survey of public development banks and private financial institutions, conducted by the by the OECD Platform on Financing SMEs for Sustainability. It provides insights on financial institutions’ current approaches and plans for the integration of climate considerations in their SME operations. It also provides information on the offer of finance and non-financial support for SMEs’ net zero investments and on related SME climate-related data requirements.
Carbon reporting solution for SMEs: A landscape review Icebreaker One The report shares insights into market trends, costs, and the challenges SMEs face in carbon reporting. It aims to help businesses navigate carbon reporting and support their transition to net zero. It includes extensive research, covering over 270 carbon reporting solutions as well as in depth results of surveys and interviews of SMEs and solution providers.
Considerations on SMEs and transition plans B4NZ This briefing paper is written for institutions, policymakers and regulators involved in setting future transition planning guidance and regulation standards. It sets out:

1. The current SME landscape in the UK
2. The growing relevance of transition plans for SMEs
3. The challenges, opportunities and recommendations on transition plans for SMEs
4. Guiding principles for SME transition plans
Financing SMEs to support a just transition to net zero emissions in the UK LSE Grantham Institute This brief sets out the transition requirements for SMEs and how issues of demand and supply of finance for the transition can be addressed. It provides recommendations to banks and finance providers, and to the UK Government.
Green Growth Report Small Business Britain BT, Small Business Britain, and Oxford Brookes Business School conducted a comprehensive survey with over 2,000 small businesses to delve into their sustainability efforts, requirements, ambitions, and prospects.
Mobilising SME’s for climate action B4NZ This paper is written primarily for parliamentarians and policy makers. Our aim is to set out in the simplest terms possible how the combination of action from banks and government can accelerate progress towards net zero for the UK’s approximately 6 million small- and medium-sized enterprises.
Smaller businesses and the transition to net zero British Business Bank This infographic covers key SME sustainability statistics
SMEs need support to prepare for new sustainability reporting regulations edie An article where Better Bankside’s sustainability manager Sadie Hodgson outlines why small businesses are apprehensive about complying with forthcoming sustainability reporting rules – and sets out how they can navigate uncertainty in this space to seize the full benefits of action.
The Role of Banks in Reducing GHG Emissions of UK SMEs B4NZ A report from B4NZ (then Bankers for Net Zero), prepared by Smart Data Foundry, which reveals the crucial role banks can play in measuring and reducing the greenhouse gas emissions from their SME clients. The report highlights the results of an 8-week scoping exercise, which comprised of desk research, interviews with experienced academics as well as B4NZ member banks, including HSBC UK, the British Business Bank and Santander.
Up to 4 million SMEs have no plans for net zero transition Lloyds Bank This article highlights how SMEs are being left behind in transition with biggest barriers coming from cost and lack of information.