Small and medium-sized enterprises (SMEs) represent 90 per cent of businesses globally and account for 40 per cent-60 per cent of business-sector greenhouse gas (GHG) emissions, yet they remain one of the most under-supported segments in the global sustainability transition.
A new white paper, Sustainability Meets Growth: A Roadmap for SMEs and Mid-Sized Manufacturers, released today by the World Economic Forum, indicates that if SME sustainability transitions are fast-tracked, the world could move significantly closer to achieving the Paris Agreement targets and unlock economic growth.
The report, released in collaboration with Schneider Electric, explores the shift in sustainability from a perceived cost to a strategic growth opportunity and provides a practical, five-stage roadmap for SMEs and mid-sized manufacturers to integrate environmental sustainability into their operations and business strategies. It also outlines the support mechanisms required from the public and private sectors to help with the transition.
“Small and mid-sized manufacturers have the potential to be powerful multipliers of climate action, particularly in decarbonising value chains, as they play a critical role in global supply networks,” said Kiva Allgood, Managing Director, World Economic Forum. “The roadmap in the report demonstrates how sustainable transformation is not only viable for smaller manufacturers – sustainability can also be leveraged as a competitive advantage in today’s fast-evolving economic and regulatory landscape.”
Under the Paris Agreement, nearly every country has committed to limiting global warming to well below 2C, with efforts to stay within 1.5°C. To achieve this, global GHG emissions must peak before 2025 and decline by 43 per cent by 2030 but current trajectories show the world is far off course.
The report’s global survey of over 60 manufacturing SMEs, from diverse sectors and geographical areas – Europe, MENA, Africa, East and Southeast Asia, North America and South America – reveals an evolving mindset to sustainability:
- 68 per cent of respondents expressed a positive outlook
- 38 per cent already view sustainability as a business opportunity
- 60 per cent cited customer demand as the primary driver for action, ahead of regulation
Despite this, barriers remain. Over half (53 per cent) of SMEs cited competing priorities such as cost pressures and expansion as the main obstacle to implementing sustainability. Others pointed to policy uncertainty (47 per cent) and financial constraints (42 per cent).
To overcome these hurdles, the report calls for a collaborative support mechanism from both the public and private sectors tailored to the specific needs of SMEs. It outlines a comprehensive toolkit of enablers, including access to finance, knowledge-sharing, networks, policy guidance and implementation support.
“The future of manufacturing depends on empowering SMEs and mid-sized companies to lead the way towards a more sustainable and inclusive global economy. Sustainability is as much an environmental imperative as an economic one for manufacturing companies,” said Esther Finidori, Chief Sustainability Officer, Schneider Electric. “The leading SMEs and mid-sized manufacturers of tomorrow will be the ones who successfully leverage sustainability as a competitive advantage, building an end to end resilient and high-performance value chain on the journey.”
The report emphasises that aligning SME sustainability with business growth is not only possible but essential to limit global warming to 1.5°C.
About the Annual Meeting of the New Champions 2025
The 16th Annual Meeting of the New Champions will take place from 24 to 26 June 2025 in Tianjin, People’s Republic of China, under the theme “Entrepreneurship for a New Era”. The meeting will convene over 1,700 leaders from business, government, civil society, academia, international organisations, innovation and media to explore entrepreneurial solutions to global challenges.
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