SMEs paving the road to net zero

15 SEP 2023

Small and medium-sized enterprises are green powerhouses –investing in them is investing in everyone’s future.

Globally, small to medium sized enterprises (SMEs) make up 90% of businesses and account for around 50% of employment.

This means that while Amazon, Coca cola, Apple and other brand behemoths make bold net-zero projections, it’s important to support the millions of firms with 250 or fewer employees that are also driving the sustainability agenda – arguably even further and faster. This is especially true for SMEs in the renewable energy sector who will play a leading role in bringing down global emissions.

Challenges of transitioning

SMEs across all sectors understand the importance of acting on sustainability. In one survey, an overwhelming 89% of SMEs in the UK recognized sustainability as a business issue. It's this acute awareness which has prompted fellow SMEs to build and offer renewable energy solutions.

But working with fewer employees and resources, SMEs must balance the need to innovate with the need to grow. Particularly in the developing world, SMEs are confronted with daily challenges; wrangling bureaucracy, limited access to stable finance and skills shortages. Smaller firms are also more vulnerable to climate change impact. Lacking the financial buffers of global brands, they must thrive to survive.

The result is too many SMEs with minimal margin for innovation and little protection against disaster - including those whose very business model is built upon enabling climate change action.

What SMEs want

A recent Twitter poll by ADSW asked SMEs in the renewable energy sector what support they needed to succeed economically and environmentally:

37% required funding.

32.8% asked for incentives.

30.3% highlighted incubator programs.

Across all sectors, SME respondents echo the same findings. In a survey from the SME Climate Hub, 40% of small business owners globally reported delaying climate action because of time limitations, two-thirds admitted feeling unequipped to tackle the climate crisis – and 70% needed faster access to external funds to reduce their emissions.

The case for investing in SMEs

The World Bank predicts 600 million jobs are already needed in 2023 to absorb the growing global workforce. This should put SMEs, as a major employer, at the top of the priority list for governments around the world - and argue the International Trade Center’s case for $1 trillion global investment in annual SME investment.

It would be money well spent.

Smaller enterprises can react with greater agility than the world’s giants. A surprising study by ScienceDirect found that climate change has had a significant positive impact on innovation among SMEs, leading to an average increase of 6.6% in R&D development investment.

Indeed, many SMEs thrive on the challenge – such as Charm Industrial, a US-based SME which converts plant waste into bio-oil and then stores it underground, locking carbon away for 1 million years. The company made headlines in 2022 for signing a $53 million deal to remove over 100,000 tons of carbon dioxide from the atmosphere.

But for those with minimal support or funding, a surge in innovation is hard to achieve.

SMEs in pursuit of SDGs

Despite the unlevel playing field, SMEs all around the world are leading the way.

In India, solar-powered clean irrigation has positively impacted more than 38,000 small farms. Award-winning SME Claro has installed 60MW of power and 16,850 solar pumps. Its work has so far benefited 7,650 women farmers and avoided an estimated 30,000 metric tons of CO2 emissions.

The award-winning SME Genevos is advancing the mission for zero emissions at sea. Based in France, the firm is a front-runner in championing green hydrogen and on a mission to drive the marine sector towards a net zero future.

In South Africa, G7 Renewable Energies has been in the business of grid-connected wind farms and solar parks since 2008. With 37 interns over the past decade, the company is investing in the future by enrolling undergraduates, graduates and post-graduates in its youth development program. Thinking younger still, its Head of Environment has helped create When I Grow Up, a children’s book of inspiring stories from people working in green energy.

And SMEs don’t need to be in the renewables sector to have big impact. In Tanzania, honey producer SuBeHuDe has partnered with the Global Evergreen Alliance on a project of landscape restoration, supporting livelihoods in the area. The nonprofit focuses on training in sustainable beekeeping practices alongside promoting access to inclusive education, healthcare and clean water. The name is a shortening of Sustainable Beekeeping and Human Development and SuBeHuDe has built a social, economic and environmental framework which has positively impacted thousands. 

Small businesses, big impact

SMEs may not be big, but they are powerful. Collectively they can accelerate the green transition and benefit everyone on the planet, but only if they can access funding and have a supportive environment, with policy frameworks and incentives to boost their green development.

Small businesses may be our biggest hope.


19 JUN 2024

What is the COP Presidencies Troika?

A new environmental partnership aims to accelerate and strengthen climate action at the highest levels of government worldwide. So what is the COP Presidencies Troika, and how will it work?

The COP Presidencies Troika unites the UAE, Azerbaijan and Brazil, the hosts of COP from 2023-2025. With its name derived from a style of carriage drawn by three horses side-by-side, the Troika embodies a growing global commitment to cooperation and action, to meet the ambitious climate goals set for 2030. The Troika aims to tackle three problems that have slowed progress on climate action: maintaining momentum, ensuring continuity and driving implementation.

What is the COP Presidencies Troika?

Maintaining momentum year round

Critically, the Troika aims to keep the urgency of climate action high between COP conferences. It’s not uncommon for global climate initiatives to take place at a staccato rhythm, marked by intense flurries in discussion and ambitious commitments, then inactivity or inaction in intervening months while climate goals get sidelined by economic factors, regulatory delays and ebbs in political will.

In just the last year, the UK government announced its intention to “water down” some of its climate change commitments. Under the administration of Jair Bolsonaro, Brazil saw deforestation of the Amazon rainforest greatly increased, often called the lungs of planet Earth for its importance to global environment health. In Poland, five citizens resorted to taking the government to court for their poor environmental record.

What is the COP Presidencies Troika?

These commitments often stumble when the urgency from COP has faded and governments are faced with considerable regional or local economic pressures to compromise on sustainability. With the three governments actively working to keep climate discussions a priority, the Troika aims to give the environment a stronger voice throughout the year, strengthening action for climate change long after the conference doors close.

Ensuring continuity and driving implementation

Moreover, the Troika aims to streamline climate change efforts and bridge the gap between commitment and action. The UAE Consensus included a plan for the three COP Presidencies to collaborate on a "Roadmap to Mission 1.5°C."

COP29, happening in Baku, Azerbaijan, is expected to focus on a new collective financial target, called the New Collective Quantified Goal, or NCQG for climate action. This target aims to address the specific needs of developing countries. If agreed upon, the NCQG would be the most significant development in climate finance since 2009, when developed countries pledged to jointly raise $100 billion annually by to support developing nations.

Building on the progress from both the UAE Consensus and COP29, the focus at COP30 in Brazil will be on ensuring strong commitments from individual countries in their next round of national climate plans, due in 2025. The Troika will play a key role in this. The aim is to make sure these national plans are ambitious enough to collectively achieve the goals of the Paris Agreement while also considering sustainable development and poverty eradication efforts.

By working in tandem and with this clear plan for the next three COPs, the Troika aims to ensure that – individually and collectively – there is no wavering from working towards sustainable goals. 

A Historic COP Initiative

Previous COPs have been heavily criticized by observers and journalists for discordance, misalignment or lack of urgency.

COP4 in Buenos Aires in 1998 was described as “two weeks of ill-tempered talks”. Action at COP12 in Nairobi was lambasted for “glacial progress.” Lima’s COP20 was summed up as a conference that “overran and underdelivered.”

What is the COP Presidencies Troika?

COP28 grabbed headlines for many reasons, including being the first COP to call for a clear transition “away from fossil fuels”, but also for recognizing that there are only a few more years left before climate change makes our decisions for us.

At the launch of the Troika in Dubai, COP28 President Dr. Sultan Al Jaber said: "COP28 delivered a different, groundbreaking COP, that culminated in The UAE Consensus. At COP28, Parties mobilized behind historic climate action through both the negotiations and their commitments to the Presidential Action Agenda.”

“The Troika helps ensure we have the collaboration and continuity required to keep the North Star of 1.5°C in sight – from Baku to Belém and beyond. The breakthroughs we all achieved at COP28 must carry forward to COP29 and 30 – in ambitious nationally determined contributions, climate finance follow through, and accelerated implementation."


14 JUN 2024

ADSW Answers: the Director of the SME Climate Hub on how SMEs can decarbonize

As countries continue working to limit global warming according to the Paris Agreement, most recently with the landmark UAE Consensus reached at COP28 to transition away from fossil fuels, small businesses are realizing they have a big opportunity to make a significant impact. But lowering carbon emissions can also be a significant challenge for small and medium-sized enterprises (SMEs).

Pamela Jouven, Director of the SME Climate Hub, an online platform for small and medium-sized enterprises, talks about the Hub’s work to accelerate a global movement and mobilize SMEs to take climate action – and why that action is critical for the planet.

How does sustainability align with your strategy?

We support small and medium-sized businesses on their climate action journeys by providing them with free tools and resources to reduce their carbon footprint. We also invite businesses to make the SME Climate Commitment and be recognized by the UN’s global Race to Zero campaign by halving emissions by 2030, reaching net zero by 2050, and reporting on their progress each year. More than 7,500 SMEs from over 130 countries have made the commitment so far.

The SME Climate Hub is an initiative of the We Mean Business Coalition, a global nonprofit that had historically worked with larger corporations to halve global emissions by 2030. But the crucial role SMEs play in reducing global greenhouse gas emissions has become increasingly apparent: 90% of companies globally are small or medium-sized enterprises, employing 70% of the world’s workforce and contributing over 50% of global GDP.

SMEs also have a more local customer base, staff and supply chain, making them more vulnerable to the impacts of climate change. To create more resilient communities, SMEs need to be able to weather these changes, while we work to keep global temperature rise in check – but they need support.

What do you see as the most important opportunity to focus on in the sustainability space?

To reach net zero, we need small and medium-sized businesses to make consistent progress toward global targets. At the same time, we must not put a disproportionate burden on the businesses that have the least resources to navigate the energy transition. Governments, corporations, civil society and industry associations all need to come together to support them.

Over 80% of the SMEs we survey annually say they want to take action but need financial resources, tools for action, regulatory support and even support from their investors and customers. 61% of those surveyed told us their customers – whether corporate partners or individuals – were not asking them to reduce emissions. If corporations and governments want to meet their own climate goals, they need to bring their entire supply chain and constituents on board.  

How are you involving stakeholders in your sustainability efforts?  

We’re working with a diverse set of stakeholders to help us reach SMEs with the information they need, build out support and incentive systems, and streamline the commitments we are asking them to make or the data we are asking them to disclose. Through a partnership with the COP28 Presidency, First Abu Dhabi Bank and Masdar, we began to mobilize SMEs in the Middle East and North Africa and created a version of the SME Climate Hub digital platform in Arabic. We’ve also expanded our footprint in the UK and US and launched recruitment campaigns and regionalized programs in Latin America, the Caribbean and India.  

When engaging corporations in the mobilization of their supply and value chains, we’ve seen increasing progress. Last year, we launched a partnership with IKEA’s largest retailer, Ingka Group, to share the SME Climate Hub resources with its SME customers. And we’re working with multinational corporations and the finance industry to boost access to incentives that support SMEs’ low-carbon transition. 

How are you fostering innovation in sustainability?  

We’re already seeing thousands of companies taking climate action because they know it’s critical to protect their bottom lines. With the right resources to take climate action, SMEs can reduce costs from long-term climate impacts, improve efficiency and create a healthier environment for their operations and communities. Businesses are also realizing more and more that customers, investors and governments are now looking for companies that have a lower environmental footprint.  

Key to supporting SMEs in their decarbonizing efforts is innovative financing, and we are also working with financial institutions to develop tools such as preferential loans and terms for SMEs that are taking climate action. 

In what areas do you see other sustainability-related opportunities?  

The SME Climate Hub and the We Mean Business Coalition are working with more corporations around the world to mobilize even their smallest suppliers toward climate action, including a supplier cascade campaign calling on corporations to help their suppliers reduce emissions. In addition to providing free tools and resources, we work with large corporations to incentivize their smaller suppliers. This can mean beneficial contracts for companies that are taking action or procurement requirements prioritizing businesses that are targeting emissions reductions.  

Companies and governments are increasingly calling for a phase out of fossil fuels. We recently worked with Netflix to create our Action Courses, which offer guidance for EV adoption within the film and television production sector – an approach we’re planning to replicate in other industries. By moving toward clean energy solutions across businesses of all sizes and fostering essential collaborations in supply chains, we can drive larger change throughout entire systems and industries.  

07 JUN 2024

Solving water scarcity with green desalination

Alexei Levene, Co-Founder and Chief Commercial Officer, Desolenator

With the world facing the escalating challenge of water scarcity, the need for innovative solutions has never been more pressing. We are on a trajectory toward a 40% deficit in global water availability by 2030, according to the UN, and the pervasive impacts of climate change are putting water stress on track to reach crisis proportions.

Populations worldwide – in cities like Jakarta, Cape Town, Mexico City, and Barcelona – are already experiencing the effects. By 2025, regions home to half of the global population could be grappling with water stress.

Source: World Resources Institute

Water underpins all aspects of life as we know it, from food production to manufacturing, transportation and energy. Global demand for water will only increase with population growth and urbanization, alongside the escalating strain from intensified agricultural practices, greater energy requirements and the expansion of industrial activities.

However, while it may appear we are facing a scarcity issue, the crux lies in water quality.

The vast majority of our planet’s water (97%) is held in our oceans, presenting a significant but underutilized resource. Glaciers and ice caps contain about 2% of the water total, leaving less than 1% readily available as freshwater. This distribution highlights the stark contrast between the abundance of saline water and the scarcity of freshwater resources. Desalination is crucial to bridge this gap.

Despite its potential, the environmental impact of traditional desalination technology, with its heavy energy consumption and reliance on fossil fuels, demands a shift toward more sustainable practices. Notably, the global water industry, including desalination, contributes approximately 10% of worldwide CO2 emissions, underscoring the urgent need for greener approaches in water treatment and supply.

This includes integrating desalination plants with renewable energy sources like solar, wind, and nuclear power to produce clean water without worsening climate change. However, this transition is not without obstacles, such as the intermittent nature of renewable energy and the difficulties of desalination when power supply fluctuates.

Specifically, variations in plant operations can lead to more frequent fouling of the membranes that separate salt from water. The inconsistent power from wind and solar installations may require the integration of storage systems to smooth out supply fluctuations, potentially increasing costs. Nuclear plants are often too large for just desalination, suggesting they need to serve additional power generation purposes. These challenges are significant for large-scale plants that supply critical water resources to areas like Dubai and Israel.

Desolenator’s solar-powered desalination facility.

In the face of these challenges, innovation plays a critical role in shaping both a secure and decarbonized water future. The following three innovations addressing this water-energy nexus provide a glimpse into what the future of desalination could hold.

Deep sea desalination: Leveraging the naturally occurring pressure differential between the surface and deep sea, Floucean is pioneering a unique alternative to renewable energy generation for water production. The subsea reverse osmosis (RO) process is powered by the hydrostatic pressure of the deep sea, reducing power consumption compared to conventional plants. The technology uses the pressure created by depths of 500 meters or more, which can be found in the majority of coastal locations, to feed surrounding water into the deep-water desalination station.

Wave-powered desalination: By harnessing the kinetic energy of ocean waves, this approach provides a novel way to power desalination processes. Projects like Oneka capture the motion of waves to generate the pressure required for desalination, eliminating the need for external power sources. This method harnesses the vast energy of the ocean and aligns with sustainable development goals by reducing ecological impacts and strengthening coastal water supply systems.

Solar-powered and distributed desalination: Utilizing solar energy, this approach employs solar thermal energy to distill seawater into fresh water, bypassing the need for harmful chemicals or complex membrane systems. The technology Desolenator has developed couples efficient energy production with innovative storage through a thermal battery. This environmentally friendly and cost-effective method offers scalable solutions that cater to diverse needs, from small communities to expansive urban centers. The adaptability of solar-powered systems is key, allowing for customized implementations that can address specific local water challenges.

But what needs to happen for these decarbonized desalination solutions to go mainstream?

First, it’s crucial to establish a policy environment that aligns with net zero goals. This requires a multifaceted strategy that includes regulatory support, financial incentives and enhanced collaboration between the public and private sectors to expedite the development of innovative solutions and stimulate investment and innovation within the water sector.

The investment gap between the water sector and other industries, particularly energy, also deserves more attention. The water sector sees relatively modest funding, according to the World Economic Forum, with annual investments in water innovation ranging from $100-$200 million. In comparison, global investment in energy transition technologies investments reached a record high of $1.3 trillion in 2022, and climate tech venture capital received $70.1 billion in 2021.

The focus on seed and pilot-phase projects within the water sector signals a need for a broader investment strategy, as well as one that nurtures initial ventures through to their full development and application at scale. Achieving this requires a more robust and varied investment portfolio, essential for realizing the potential of water technologies to combat water scarcity effectively and contribute to climate resilience.

The journey toward decarbonizing desalination is complex and filled with challenges, but it is also marked by significant opportunities for innovation. Realizing this vision demands a collaborative approach across multiple sectors to secure our freshwater supply in a way that truly safeguards our planet's well-being.