Why SMEs must have a seat at global climate negotiations
Small and medium-sized enterprises (SMEs) are the backbone of the global economy and indispensable to meeting the goals of the climate transition. Yet their voices remain under-represented in global negotiations. In this guest blog, Rachel Dignam from Sage explores how, in partnership with ICC, Sage has worked to ensure SMEs are heard at the climate table – from COP26 in Glasgow to COP30 in Belém.
Rachel Dignam
Director of EU, International and Canadian Public Affairs, Sage
Small- and medium-sized enterprises (SMEs) are central to the global climate transition. Representing over 90% of businesses worldwide, employing most of the global workforce and anchoring local economies, SMEs are essential to a sustainable future.
Yet climate negotiations often focus on governments and large corporates, leaving SMEs under-represented. At Sage – a leading firm in accounting, financial, HR and payroll technology for SMEs – we believe this must change. Each year, in partnership with the International Chamber of Commerce (ICC), we bring SME voices to the climate talks through thought leadership, policy recommendations, events and campaigns, ensuring they shape, not just respond to, climate frameworks.
Building the SME voice at COP
At COP26 in Glasgow, we highlighted the need for governments and business to think small first when it comes to climate policy and called for simplified sustainability reporting. Frameworks designed for multinationals often create disproportionate burdens for SMEs.
At COP27 in Sharm El-Sheikh, we quantified for the first time, the economic and environmental impact of SMEs at scale. SMEs wield enormous influence over reducing emissions and driving growth, yet face significant barriers, including complex reporting requirements and limited access to finance.
By COP28 in Dubai, we set out concrete principles to simplify reporting standards, ensuring SMEs can benefit from disclosure regimes and access to finance without being overwhelmed.
At COP29 in Baku, our report, Unlocking Sustainable Finance for SMEs, revealed 787 billion dollars in financing could be mobilised through a virtuous cycle. Proportionate reporting builds credibility, credibility unlocks capital, capital enables investment in green practices, and measurable impact attracts further investment. Crucially, technology underpins this cycle, reducing the cost of reporting, increasing trust in SME data and opening pathways to finance.
This year, Sage will conduct an SME Global Sustainable Finance Stocktake. The stocktake will draw on five years of data to assess progress, remaining barriers and emerging opportunities when it comes to sustainability reporting and enabling SMEs access to finance.
Why SMEs matter
The case is clear:
- Scale: Over 330 million SMEs worldwide collectively impact emissions and make up supply chains.
- Innovation: SMEs often pioneer the technologies and business models that drive the green transition.
- Resilience: SMEs anchor communities, providing jobs and services that make societies more resilient.
Yet, SMEs face unique challenges. Unlike MNEs they lack dedicated compliance teams and meeting reporting requirements is too complex and costly. Green finance is often inaccessible and fragmented regulations create friction. Technology can help by making reporting easier, connecting SMEs with lenders and enabling measurement and management of their environmental impact.
What needs to happen next
Three priorities stand out:
- Proportionate reporting standards
Simplify reporting to the SME reality, enabling transparency without creating barriers. Technology can make data reliable, comparable and usable, turning reporting into a gateway to capital. - Unlocking sustainable finance
Policymakers and financial institutions must expand SME access to finance. - Capacity building
SMEs need skills, tools and knowledge to act. Partnerships across business, government and civil society, supported by digital innovation, can provide this support.
Conclusion
The climate challenge cannot be solved without SMEs. They are not just participants, but the driving force of change, with the potential to accelerate progress in every economy and community. With support, proportionate frameworks, access to finance and technology, SMEs can scale sustainable solutions faster and deeper than any other part of the economy.
This is about unlocking big impact through millions of businesses acting locally and collectively. When SMEs go green, supply chains shift, communities strengthen and innovation accelerates.
Together with ICC, we will continue to amplify the SME voice, bring data to negotiations and champion solutions that empower entrepreneurs everywhere. When small businesses lead on climate action, the world can achieve big change.
2025 is a critical year for the Paris Agreement. Ten years on, we need to rethink how we frame the challenge. And seeing challenges differently is what business and we are all about.
ICC is committed to securing what businesses need at the upcoming climate negotiations, COP30, in Belém, Brazil. Learn more about our Opportunity of a Lifetime climate campaign and how to get involved.
*Disclaimer: The content of this article may not reflect the official views of the International Chamber of Commerce. The opinions expressed are solely those of the authors and other contributors.
