ICC First Vice-Chair becomes first LatAm business leader to take SME Climate Commitment
In a major international broadcast, Maria Fernanda Garza – ICC First Vice-Chair and Chief Executive Officer of Orestia – became one of the first signatories of the UN-recognised “SME Climate Commitment”, which forms part of the SME Climate Hub initiative launched to provide small businesses with clear commercial incentives to reduce their greenhouse gas emissions.
In making the commitment, Orestia has pledged to halve its carbon emissions by 2030, achieve net-zero emissions by 2050 and to regularly report on progress towards these aims. Orestia is the very first small business in Latin America to join the SME Climate Hub initiative.
On the logic behind the manufacturing company’s decision to join the initiative, Ms Garza said: “We are seeing more and more multinationals taking climate action and committing to make their entire value chains more sustainable. For SMEs like Orestia that are part of these value chains, acting on climate change is quickly becoming a license to operate and satisfy customer demand. Demand is also coming from employees, consumers, investors, shareholders. We simply need to move with the times and stay ahead of the curve.”
The SME Climate Hub was launched at the start of the United Nations General Assembly Week and New York Climate Week by the UK Government’s Climate Champion, Nigel Topping. As part of the initiative, several multinational companies – including BT, Ericsson, Ikea, Telia and Unilever – have agreed to support the development of best-in-class tools and resources tailored to the needs of small businesses. ICC has pointed to the lack of bespoke support for SMEs as a major lacuna in global climate action efforts to date, given that value chains typically account for 5.5 times more emissions than multinational firms’ direct emissions.
The platform will couple these tailored resources with opportunities for businesses to unlock direct commercial incentives – from government tax breaks to procurement preferences provided from major businesses. In this context, the co-hosts of the platform see an opportunity to support SMEs who have been particularly hard hit by the COVID-19 pandemic, by helping them to leverage climate action as a means of winning and retaining business, reducing costs, enhancing access to capital and increasing business preparedness to external shocks.
The initiative has received initial financial support from Amazon and, in a major announcement on Thursday, Verizon granted US$1 million to support the development of tools and training provided on the SME Climate Hub.
In this context, Ms Garza said: “SMEs in developing countries often face major barriers within their business environment in adapting to the impacts of climate change. Even if we want to do well – and I believe most small business owners do – it is often difficult to know how to start. The SME Climate Hub provides the necessary resources and, critically, the commercial incentives needed to make climate action a driver of business success.”
SMEs are the backbone of the Mexican economy – with official statistics suggesting that the country’s 4.2 million SMEs are responsible for 52% of GDP and 78% of local employment. Research by the United Nations has shown that SMEs are particularly vulnerable to shocks linked to climate change, with 40% to 60% of small businesses never reopening after extreme weather events. Given this vulnerability, the Hub will also provide dedicated resources and support to help SMEs guard against climate-related disruptions from a business continuity perspective.
“If the current pandemic has taught us anything, it is that building resilience is vital for businesses, communities and the global economy to endure future threats – whether they are biological, technological or environmental,” said Ms Garza.
Speaking at the Exponential Climate Action Summit, Ms Garza concluded: “We are not individual actors – this is a global ecosystem – and only true systems change will enable the collective action required. SMEs around the world can now really be part of the commitment to reach net-zero emissions before 2050 and I encourage SMEs everywhere to make the SME Climate Commitment – There are no more excuses.”
About the SME Climate Hub:
The SME Climate Hub is an initiative founded by the International Chamber of Commerce, the Exponential Roadmap Initiative, the We Mean Business coalition and the UNFCCC Race to Zero campaign, with the aim of supporting small and medium-sized businesses to build business resilience. The SME Climate Hub provides a one-stop-shop for SMEs to commit to climate action and access tools, incentives and other resources designed to make it easier than ever for small and medium-sized businesses to cut carbon emissions, bring innovative green solutions to market and build business resilience.
Visit the SME Climate Hub for more information