On the occasion of World Environment Day, ICC and the Exponential Roadmap Initiative, with the support of the United Nations Framework Convention on Climate Change, have announced a new partnership – “The SME Exponential Race to Zero”.
The partnership will explore the development of a global platform to help SMEs build business resilience by providing them with concrete climate action support and financial resources necessary to thrive in a post-COVID-19 world.
Building on the Exponential Roadmap’s 1.5°C Business Playbook and ICC’s Chambers Climate Coalition network, the new initiative seeks to help SMEs build business resilience by providing them with concrete tools to work towards halving emissions by 2030 and achieving net zero emissions by no later than 2050, while reducing costs, enhancing access to capital and increasing business preparedness.
SMEs comprise an estimated 80% of business worldwide, employing billions of people and play a vital role in their local communities and in global supply chains. However, necessary measures undertaken by governments and companies to combat the spread of COVID-19 are disproportionately impacting SMEs and their workforces, putting them at risk of permanent closure. The Save Our SMEs (SOS) campaign led by ICC aims to mobilise urgent and decisive action to protect small businesses from the devastating economic repercussions of the COVID-19 pandemic.
As we begin to examine how to shape the post-COVID recovery, it is clear that building resilience will be a vital component of the rebuild process to ensure that businesses, communities and supply chains can survive future threats – whether biological, technological or environmental. One of the most pressing existential threats to businesses is climate change, which has the potential to slow economic growth by limiting resource availability, causing shifts in demand, disrupting production and forcing business closures. Small businesses, who operate with limited liquidity, have fewer options available to adapt to these projected conditions and are at high-risk of never reopening following a severe weather event – 40% to 60% of small businesses never reopen after a disaster. At the same time, their survival is essential for the provision of goods and services around the world, the livelihoods of the billions of people that are employed by them, and the success of the global economy.
With many governments expected to put an emphasis on a green economic rebuild from the effects of COVID-19, it will be doubly important to ensure that SMEs have the tools needed to adapt to changing market conditions and new policy frameworks.
On the initiative, ICC Director of Green and Inclusive Growth Majda Dabaghi said: “COVID-19 has emphasised the importance of hardwiring resilience into the global economy and ensuring that small business are prepared to survive exogenous shocks. In partnering with the Exponential Roadmap Initiative, we hope to be able to equip SMEs with the tools and resources they need to not only survive but thrive into the future.”
Johan Falk, Co-Founder and Head of Exponential Roadmap Initiative, said: “Simplicity and speed are the key guiding principles in order to mobilise a critical mass of SMEs to accelerate climate action. We are very proud to partner with ICC and UNFCCC in the SME Exponential Race To Zero, enabling us to move at full speed in equipping millions of SMEs with the tools required, as their success in doing so is absolutely critical for us to succeed in halving emissions by 2030 and reaching net-zero by 2050.”
Nigel Topping, UK High-Level Climate Champion, shared support for the initiative noting: “The SME Exponential Race to Zero initiative comes at a critical time to help support SMEs become more resilient and recover better from the health and socio-economic effects of COVID-19. Ultimately, climate issues are business issues and this initiative helps SMEs, who comprise the vast majority of businesses worldwide, make the business decisions that will improve earnings, market share and avoid economic repercussions of future existential threats.”