Small businesses are accelerating climate action in response to customer demand

In a new global survey, small and medium-sized enterprises (SMEs) report ramping up climate action to boost growth, stay competitive, and build resilience – but financial barriers persist.

A growing number of small and medium-sized enterprises (SMEs) are taking action on climate change, with many citing financial resilience, customer demand, and regulatory compliance as key motivators, according to the SME Climate Hub’s 2025 survey.

SMEs say customer demand is a key driver for action.

• 61% of SMEs take climate action to meet customer expectations, up from 40% in 2024.
• 58% say it helps differentiate their business from competitors, 12 points higher than last year.
• 51% report winning new customers as a motivator, compared to 34% last year.

Pamela Jouven, Director of the SME Climate Hub, said:“SMEs aren’t waiting for action—they’re leading it. Small businesses are integrating sustainability into their business plans because it fuels growth, strengthens resilience, and helps them stay ahead of evolving regulations and supply chain requirements. The momentum is there, but SMEs need better financial and policy support to reach their full potential.”

SMEs recognise that climate action helps manage risk.

• 58% of SMEs say that protecting their businesses from the impacts of climate change is a key motivator,up from 44% last year.
• 32% have already begun to define specific climate risks,such as extreme weather, supply chain disruptions, and rising costs.
• 60% cite compliance with current or future regulations as a motivator, up sharply from 37% in 2024.

Ananda Putra, Sustainability Manager of OXO, a sustainable property developer in Indonesia, said: “Our investors want to see real, measurable progress, while our guests choose us for our commitment to sustainability. Since publicly disclosing our emissions, we’ve noticed stronger investor confidence, increased guest loyalty, and reduced unnecessary energy and water use, directly cutting costs.”

Despite progress, financial and policy barriers remain an obstacle. 

• 80% of respondents report little or no government support for climate action.
• Only 4% rate government support as strong.
• 64% of SMEs say better government incentives—such as tax benefits and low-interest loans—would help them scale their climate efforts.

María Mendiluce, CEO of the We Mean Business Coalition, said: “SMEs prove that sustainability is a smart financial investment. The SME Climate Hub is doing its part, but governments and financial institutions must step up with funding, regulations, and incentives that empower small businesses to scale their climate actions.”

The 2025 SME Climate Hub Survey gathered insights from 471 SMEs across 53 countries, representing a subset of the SME Climate Hub’s global community of 9,000 SMEs in 143 countries. The largest responses came from the United Kingdom (54%), United States (7%), Spain (6%), India (5%), and Australia (3%).

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For media inquiries and interviews please contact: Pascale Palmer, [email protected] 

About

The SME Climate Hub is the leading global initiative supporting small and medium-sized businesses in their climate journeys. It gives SMEs the tools, knowledge, and resources needed to measure, reduce, and report emissions while strengthening business resilience. The SME Climate Hub is an initiative of the We Mean Business Coalition, co-founded and operated in partnership with the Exponential Roadmap Initiative and the UN Climate Change High Level Champion’s Race to Zero campaign. The SME Climate Commitment is the official pathway for SMEs to join the global Race to Zero campaign.