SME and sustainability research – the beginning of a new research network?

10 November, 2021

Tina Fawcett

Sam Hampton

Reading time: 4 minutes

In this blog, Tina Fawcett and Sam Hampton talk about their desire to facilitate a stronger SME and sustainability research network, through which they hope to support a just transition of SMEs to net-zero.

CREDS sponsored a Zero Carbon SMEs Workshop on 22 September 2021 which brought together 32 researchers from a range of institutions and disciplines. SMEs are defined as any business employing less than 250 people.

Organised by a team from three universities, Sam Hampton and Tina Fawcett, Oxford University, Will Eadson, Sheffield Hallam University and Richard Blundel, Open University, it was inspired by our observation of an increase in interest in SMEs and zero carbon amongst industry groups and policy makers. We wanted to engage with the research community to identify research gaps, the strategic direction for SME and sustainability research, and key challenges for policy and industry stakeholders. By facilitating a stronger SMEs and sustainability research network, we hope to support a just transition of SMEs to net-zero.

After an introduction from Will Eadson, Richard Blundel and Sam Hampton presented a summary of their recent ‘state of the art’ reports on decarbonising SMEs, and eco-innovation. The first review addresses environmental improvement in the general SME population. The second examines ‘green’ start-up ventures and other forms of eco-innovation in which SMEs play an active role. It reviews recent evidence on entrepreneurial and innovative initiatives that address specific environmental challenges, including the Climate Emergency. Richard and Sam also talked about their involvement with the BEIS SME Working Group and SME Climate Hub.

A ‘Jamboard’ was then opened to all attendees to highlight other research, policies and initiatives which had not been covered. Contributions included:

  • Recognition that there is a growing number of SMEs in the Low Carbon and Environmental Goods and Services sector.
  • Engagement with SMEs remains a major challenge, for researchers, policy makers and other business support agencies.
  • The ‘business case’ is not the only reason SMEs engage on climate.

We then split into break-out groups to identify specific gaps in evidence. Gaps in quantitative and qualitative data were noted, including:

  • GHG emissions and energy usage from SMEs – by sector, location, size, building type etc.
  • Understanding what SME values really are – moving beyond win-win and sustainable growth agenda.
  • The politics of language. What kinds of narratives and phraseology will SMEs respond positively to?
  • Climate adaptation by SMEs, not just mitigation
  • Regional comparisons and the levelling up agenda – could de-growth as an idea ever be acceptable in a region which has suffered economic decline?

As well as identifying specific evidence gaps, attendees debated the strategic direction for the research community as it supports SMEs to decarbonise. The discussion was very wide-ranging from theory, through research methods to applied outcomes of research.

There were concerns about theoretical approaches – we talk a lot about interdisciplinary research but true examples are rare. Foundational questions were raised about definitions of ‘SME’ and how these are used. Most researchers agree that SMEs is far too broad a category to make generalisations about. But how should this community be segmented? Applied issues included how delivery of environmental business support should be delivered – locally, regionally, nationally? By advisors with business experience, or specialists in energy and sustainability?

Research priorities

Out of this discussion, came an important research priority. SME owners are often simplistically represented as only caring about profits; gathering more nuanced understandings of their motivations will be crucial to designing the right policy environment to transition to net-zero. What about building a map of willingness and capacity to lead on climate action, looking at patterns and priorities?

Attendees then identified key challenges for policy and industry stakeholders to drive change amongst the SME community. The discussions clustered around three main themes: (1) improving engagement; (2) taking a more strategic (longer term and more holistic) approach; and (3) focusing on low carbon skills. Improved engagement should go beyond celebrating champions – we also need to showcase positive environmental actions by ‘normal’ businesses. A longer-term policy approach would include a national SME & sustainability strategy, which is currently missing. This would enfranchise SMEs and create a level playing field with larger businesses. Finally, energy and environment advisors engaging with SMEs need enhanced skills for zero carbon.

There was clear enthusiasm for continued activity of this emerging network. Following the workshop, the hosts are pursuing two main tasks. Firstly we are planning to host a second workshop focused on the challenges of engaging SMEs on energy and climate. Secondly, we will make enquiries about sources of funding to formalise the network and enable future activity. As researchers, we have called for greater attention on the environmental impact of SMEs, and it is gratifying to see that support is growing for this important agenda.

If you want to be involved in future meetings of this network please contact Sam Hampton [email] or Tina Fawcett [email].

Banner photo credit: Daria Shevtsova on Unsplash