Environment

Path for growth: Making sustainability reporting work for SMEs

  • 13 November 2023

As the backbone of the global economy, small and medium-sized enterprises (SMEs) account for a significant share of global carbon emissions, while often lacking the resources of larger firms to measure and reduce them. This new study, developed by Sage and in partnership with PwC and the International Chamber of Commerce, explores SMEs’ sustainability challenges and sets out steps to improve reporting standards and reduce environmental impact.

Download the Sage report in partnership with ICC and PwC

Download the Sage report in partnership with ICC and PwC

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There is rising concern that the world is not on track to meet its crucial 1.5°C target11 nor its Sustainable Development Goals (SDGs), with only 15% on track to be achieved by 2030. Key findings from our global survey of SMEs.2

This is a stark reminder of the increased urgency for sustainability action across all organisations, big and small. Building on the insights from our COP26 and COP27 reports, this Sage study – in partnership with PwC and the International Chamber of Commerce has found:

  • 2023 has been an important year for SME sustainability action. In comparison to last year’s survey, more SMEs describe sustainability as being important to their business and report having sustainability policies in place. Over 6 in 10 SMEs say that they are currently taking steps to become more sustainable, especially through their products and services (51%), reducing energy use (48%), and through the circular economy (16%).
  • There is a strong connection between an SME’s ability to report on its sustainability performance and its capacity and willingness to take meaningful action. By strengthening their reporting, SMEs will access a huge range of benefits, from being able to better attract new customers to accessing green finance and sustainability conscious employees.
  • SMEs are increasingly being asked by stakeholders to demonstrate their sustainability performance. 58% SMEs said that they are already making statements and commitments to their key stakeholders about their sustainability performance. Our analysis of reporting frameworks demonstrates that sustainability requests to SMEs are increasing in frequency and complexity.
  • Yet, this study shows that most SMEs find it hard to evidence their commitments and progress with appropriate data. The lack of time, expertise, and budget means that many SMEs are not able to measure and track their sustainability performance appropriately. This report sets out concrete recommendations which will enable millions more SMEs to more effectively report on their sustainability performance and unlock the associated benefits of doing so.

Key findings include:

Over 8 in 10 SMEs (83%) say that sustainability is important to their business, up from 76% among those surveyed in 2022, and just over half (58%) are making commitments about their sustainability.

Just 7.7% of SMEs say that they are undertaking 7.7% sustainability reporting.

73% of SMEs are concerned about the upfront costs of reporting and 65% of SMEs describe the current reporting standards as complex. These present the 2 key “upfront” barriers to sustainability reporting.

1 in 5 SMEs are highly engaged with the sustainability agenda—including talking about their sustainability impacts externally—but are not yet reporting on them

70% of SMEs identified digital technologies as having the potential to make reporting easier.

51 million. We see the potential to triple the number of SMEs who report in the coming years. Globally, this could represent 51 million extra SMEs proactively taking measured and effective action on sustainability challenges.


This study has been produced by Sage, in partnership with PwC and the International Chamber of Commerce, for COP28 in Dubai.

1 1 IPCC Special Report, “Global Warming of 1.5c” Global Warming of 1.5 ºC —
2 Progress Chart — SDG Indicators