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.
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04 SEP 2024
Cooling our world is warming our planet. Here’s how we can turn down the heat.
As global temperatures climb, we are ramping up our use of air conditioning. The trouble is, the machines cooling our spaces are significant contributors to global warming. The UAE is rising to the challenge, combining ancient wisdom with avant-garde thinking.
Summer 2024 has brought unprecedented global heat, and new records are being set as the mercury rises. As more of us rely on air conditioning to help keep our homes, offices and public spaces comfortable, our contribution to global warming is rising, too: air conditioning causes around 7% of global greenhouse gas emissions.
Enter sustainable cooling. The UN and the International Energy Agency estimate that climate-friendly cooling could help us avoid up to 460 billion tonnes of greenhouse gas emissions over the next four decades. That’s equivalent to more than ten times India’s current annual GHG emissions.
Cooling our lives without warming our planet
Sustainable cooling encompasses a variety of measures we can take right now to help limit the impact of growing global demand for space cooling. These include improving the efficiency of existing cooling systems, innovation to develop more sustainable cooling technologies and measures that lower ambient temperatures in buildings and urban environments.
Crucially, our response to this challenge must be twofold: as well as upgrading and reimagining the infrastructure which enables today’s cooling systems, we have an opportunity to reduce the need for cooling by designing and building cooler environments in the first place.
Reimagining age-old techniques
The Middle East can draw on a long tradition of ‘passive’ architecture and design techniques which can significantly reduce heat. Rather than fighting the elements by deploying elaborate technologies to counter sweltering temperatures with artificial cold, this approach takes advantage of local conditions. The aim is to work in harmony with the existing environment to reduce the temperature of buildings, without the need for power. In the UAE, techniques include shading devices, double glazing and positioning buildings to channel natural ventilation. Buildings can also be designed with higher thermal mass, so they self-regulate by absorbing daytime heat and releasing it at night. Outside, green roofing, evaporative cooling using water features, and the application of light color coatings have all stood the test of time - and the elements.
In Abu Dhabi, for instance, traditional techniques are being reimagined for today’s needs. The sustainable urban community of Masdar City boasts a modern spin on an ancient wind tower or barjeel, which captures the prevailing wind, channeling it down past cooling mist jets into a central courtyard below. The structure, which designers say can reduce the temperature by 5 degrees celsius at street level, is built with metallic, open sides, to help visitors understand the passive design. Just a few steps away, this time-honored Middle Eastern technique also helps keep Siemens employees cool at the tech company’s innovative regional headquarters.
Elsewhere in Masdar City, the striking Al Bahr Towers combine traditional mashrabiya-style shading with 21st-century technology. The towers are adorned with over 1,000 computerized hexagonal shades which can move and adjust throughout the day, providing shade when the sun is at its strongest.
Efficiency and innovation
The Middle East is also pioneering innovative ways to future-proof buildings, rolling out new approaches to sustainable cooling. Among these, Tabreed operates 89 district cooling plants across the UAE and GCC, using chilled water from centralized energy plants to cool whole neighborhoods via underground pipes. The company is also developing ground-breaking geothermal energy which currently meets 10% of Masdar City's cooling needs. Geothermal cooling, which harnesses energy from beneath the Earth’s surface, reduces energy needs by up to 70% compared with traditional air conditioners.
AI is another tool in the race to make cooling sustainable, with companies like Hyperganic combining algorithmic engineering with industrial 3D printing and engineering to iterate at scale. Partnering with Abu Dhabi-based Strata Manufacturing, Hyperganic has created heat exchangers with radically different structures that could lead to residential air conditioning units that consume 10% of the energy that a conventional device uses.
Progress is being made to reduce leakage rates from traditional air conditioning units, mainly through better design and installation practices. In the UAE, Mubadala Investment Company’s aerospace unit Strata has teamed up with European partners to develop the world’s most energy-efficient residential air-conditioning system in the Emirates.
The hunt is also on to find more climate-friendly solutions than hydroflourocarbons (HFCs), including hydrocarbon refrigerants and ammonia. In keeping with international commitments, the UAE plans to freeze the consumption and production of HFCs in 2028. When coupled with enhanced energy-efficiency measures, these can help reduce both direct emissions from refrigerant leakages and indirect emissions from the energy used to power cooling units.
Sustainable cooling on the climate agenda
As hosts of the COP28 climate conference in 2023, the UAE placed sustainable cooling firmly on the agenda. Chief among outcomes was the Global Cooling Pledge, which saw 60 countries commit to reducing the climate impact of the cooling sector. Spearheaded by the Cool Coalition, a global network dedicated to more climate-friendly cooling, the pledge aims to reduce cooling related emissions by 68% by 2050 and to increase the global average efficiency of new air conditioners by 50% by 2030 at the latest.
Described by the IEA as one of the most critical energy issues of our time, cooling is growing increasingly prominent within the climate change conversation. The shift to more sustainable cooling for our warming world is a formidable challenge. While the planet heats up, we need to ensure we’re not throwing fuel on the fire of global warming while we try to cool down.
By merging ancient wisdom with cutting-edge innovation, we can reduce our reliance on energy-intensive cooling systems and work with the planet to create cooler environments. The Middle East, with its rich history of passive cooling techniques and ambitious climate goals, is uniquely positioned to lead this shift. But only through concerted global efforts to improve cooling efficiency, develop climate-friendly alternatives and prioritize sustainable urban planning can we hope to escape this vicious cycle and ensure a habitable planet for generations to come.
15 AUG 2024
The future of water
Covering most of the planet’s surface, water is seemingly one of the most abundant substances on earth. But today, many communities and countries are facing a usable water crisis.
While millions of people worldwide use hundreds of litres of water a day, around 3.6 billion people – almost half of humanity – survives without access to safe, clean water.
More than an inconvenience, access to clean water is essential for human health, growth, wellbeing and safety, so much so that it has been recognized as a human right. A lack of it can be devastating: 1 million people die each year from lack of access to clean water and sanitation, and every two minutes a child dies from a water-borne disease. Women and girls are particularly affected when clean water is in short supply, often tasked with hauling water over long distances for communities, taking them away from education and exposing them to violent attacks or environmental threats.
Without intervention, the next few decades could make this a reality for more and more people worldwide.
With increasing demand from water-intensive industries like agriculture, rising temperatures and shrinking water reserves, there is a real threat that there won’t be enough water for humanity’s needs. It’s a problem that has had experts ringing alarm bells since before 2017.
With access to water so critical, and the problem so pressing, why isn’t water management demanding more global attention? Is anything being done to bring it into wider conversations about sustainability? On today’s trajectory, what’s the future of water?
The future of water as it stands
Two opposing trends paint a grim picture of the future. While global water use is set to skyrocket, global water supplies are already stressed.
To keep up with demand, experts predict that global water use will rise 20-50% as a result of human-driven climate change and overuse. So much groundwater has been pumped out of the earth that it has tilted the planet’s axis.
Heavy use of water is compounded by mismanagement: without policies, infrastructure and conservation efforts, existing water sources are being polluted, wasted or drained. Worldwide, different challenges in managing water are causing water stress for communities: from outdated infrastructure to conflict to overuse, it’s clear that alongside preserving our existing sources of water, understanding how we use what we have as a global community is just as important.
On this trajectory, developing countries will experience water insecurity over longer periods and with greater intensity, while supplies to major industries become strained. Over the next two decades, the increasing water stress will lead to a rise in related inequality, political instability, growing disease and potential sources of conflict in the most affected nations.
How can we change this trajectory?
Top priorities for cleaner, healthier water
As the global community attempts to address the challenge of building a more sustainable future, the issue of water has garnered more attention. While the subject of water has been historically absent from international sustainability efforts like the Paris Agreement, both COP27 and COP28, held in Dubai in one of the world’s most arid regions, recognized water as a priority.
As governments, institutions and communities examine their relationship with water and their future needs, there is an overall consensus that the battle for water must be fought on all fronts. As a complex issue with multiple causes, it calls for many solutions across government, education, technology and industry, all working in tandem.
Individuals – from ordinary households to decision makers at the helm of major corporations – must gain a better understanding of the impact of water usage and consumption. Awareness campaigns like the USA’s Save Our Water can help change behavior and influence change at the individual level. At the national level, governments can leverage policy to support better understanding and use of water management.
Backed by funding, recent innovations in water management technology have the potential to help restore and manage water. Emerging AI and big data technologies, in particular, hold much promise. A pilot project in the Ramotswa Aquifer between South Africa and Botswana, for example, is harnessing AI to analyze water levels in the drought-prone area, helping identify patterns and inform water management decisions. AI-assisted geospatial analysis is also helping smallholders in Ethiopia to identify shallow well locations, something that promises to significantly improve crop yield and access to drinking water.
While new technologies have the potential to help solve significant challenges, prioritizing cost-effective and culturally compatible solutions remains key. Obstacles like supply chain coordination, training and distribution also need to be overcome for effective implementation. Introducing innovative financial instruments like water credits (akin to carbon credits) could incentivize investment in water-related initiatives and contribute to sustainable water management practices worldwide.
Climate Adaptation and Mitigation
The issue of water is inextricably tied to the wider climate emergency. Meeting the Paris goals by reducing carbon emissions, implementing overall climate mitigation measures and adapting to today’s changes are a key part of addressing the water crisis and building safeguards for the future.
Climate adaptation measures can be integrated into water systems and infrastructure and are essential for building resilience to climate change-induced water scarcity and extreme weather events. This involves implementing strategies such as rainwater harvesting, enhancing water storage capacity, and improving flood management systems to mitigate the impacts of climate change and ensure reliable access to water.
More broadly, general climate mitigation efforts are fundamental for addressing the underlying causes of the global water crisis. By mitigating climate change, we can help stabilize weather patterns, reduce the intensity of droughts and floods, and safeguard water resources for future generations.
Water is a critical resource, and its future is in our hands. To help people access water today and ensure water security for tomorrow, the global community must recognize, invest and mobilize to create better water management practices and safeguard the precious water we have remaining. The task is complex, but vital. We must come together to solve the problems we face for a greener, more sustainable future.