In 2019 they were two. In 2020 they were 31. And as of 2021, 207 small-and-medium size enterprises (SMEs) have signed up to the global Science-Based Targets initiative (SBTi).
The numbers reflect two key trends: That companies are increasingly expected to back their climate pledges with hard, science-based data; and that climate pledges trickle down from large companies to SMEs in their supply chain.
“On climate, companies have gone from more generic or fluffy goals to concrete target-setting. They’re not simply saying ‘we will try to reduce emissions’, as many have said for decades, but instead setting absolute targets to reduce emissions, with concrete scopes and timelines,” explains Niki Bey, Senior Manager for Strategic Sustainability Consulting at Ramboll.
“And companies are increasingly communicating these goals – announcing when they sign up to initiatives, where SBTi is one of the initiatives currently gaining strong momentum,” he adds.
Start with your baseline
While more and more companies are joining the race to net-zero carbon emissions, it is also a daunting task for many. Where should they start, and what is the smartest and most cost-effective way for them to take climate action?
According to Niki Bey, a mechanical engineer with expertise in life cycle management who has advised companies for more than 20 years, companies should always begin by defining what is important to them, where they can make the most impact, and what their current baseline is.
“If we are just talking climate, a lot of companies still need help to understand their baseline emissions. And only once that is done can we begin to help them identify meaningful initiatives to reduce their emissions and develop carbon decarbonisation roadmaps,” he explains.
Once companies have a baseline, they must define actions. Here are Niki Bey’s top suggestions for how SMEs can put their climate ambitions into practice:
1. Don't reinvent the wheel
SMEs are resource-constrained and rarely have an employee whose primary job is solely focused on sustainability. For that reason, many might not know how to get started. But Niki Bey emphasises that this shouldn't be a barrier; for most businesses, there is already plenty of data and experience to lean on, and that's why collaboration is key:
"For SMEs, perhaps the most important thing is collaboration and partnerships. You shouldn’t try and do it alone but be open to share and listen to lessons learned and data from others."
"Even if you don't have many resources in-house, that shouldn't scare you off," he adds. "There are many industry organisations and independent institutions that can, for instance, provide data or put you in touch with other businesses in your field with relevant experience. You can use this data to get a sense of where you can make the biggest impact".
A lot of this support may also come from companies further up the supply chain, as large companies set supplier engagement goals and stricter requirements for supplier performance, which Niki Bey expects will create more incentives to collaborate on decarbonisation.
2. Develop a roadmap
The next step is to develop a roadmap of what you want to achieve. A roadmap helps companies define their strategic sustainability goals and the actions needed to get there.
“With a roadmap, companies usually set 3-5 strategic priorities with associated workstreams and goals. In this way, you can break down one large goal into smaller, more manageable targets. At Ramboll Management Consulting, we also help companies build their internal capacity to follow through on these targets: ensuring the right governance processes are in place, defining KPIs, and in this way enable organisations to keep track of their progress throughout the next 10-15 years, so the initiative doesn’t run aground after a year or two,” Niki Bey says.
- Example: Ramboll UK has set a carbon reduction roadmap to achieve net zero emissions by 2050 or before, which is publicly available here
- Learn more: To learn more about roadmaps, please visit our strategy and road mapping site here
3. Assess the life cycle of your products and services
Many products today are true globetrotters, and even standard household items may travel across several continents and oceans before reaching consumers. By assessing this entire life cycle – from extraction, production, to end-of-life including recycling – companies can significantly reduce the carbon footprint in their supply chains. Life cycle assessments should be a key part of your roadmap, because through a life cycle perspective significant, emissions can be found and ultimately reduced.
“Life cycle thinking is a very basic concept but still under-used as a tool. Unfortunately, there are plenty of examples where a well-intentioned initiative in one phase of the life cycle ends up being counterproductive in another life cycle phase. That’s why bringing in experts to help with this can be a good idea,” Niki Bey explains.
- Example: Watch this video for a quick overview of how Ramboll applies life cycle assessments in the buildings sector
- Learn more: Read more about of life cycle assessments here
4. Train and empower employees
Reducing carbon emissions throughout your business is not a one-time exercise; rather, it is a continuous effort that necessitates buy-in from all your employees.
“A very important factor that we work a lot with is empowerment. Sustainability initiatives don’t have to be top-down, but can come from your employees,” Niki Bey explains. “Even if the ideas surfaced in this way aren’t always the most clear-cut from a systemic perspective, listening is key because it ensures your employees stay motivated and the ideas keep coming.”
"Training and empowering your employees to make your business processes more sustainable is a key step once you've set your strategic direction, because at the end of the day, it is your employees who will put your plans into practice. Making sure everyone understands the why and how behind your efforts to, for instance, decarbonise is crucial to ensuring that it happens".
Ramboll has several decades of experience in sustainability consulting. If you are interested in hearing more about how we can help your business achieve your sustainability goals, please contact us here.
- Learn more: Ramboll has a learning and assessment tool to guide businesses on their sustainability journey. To read more, please visit the Incept Sustainability page here.
What is SBTi?
The Science Based Targets initiative (SBTi) is a global body enabling businesses to set ambitious emissions reductions targets in line with the latest climate science and the goals of the Paris Agreement. To date, more than 2,200 companies have pledged to set science-based targets or have had their targets approved by SBTi. SBTi also offers a simplified route for SMEs to sign up, and more information can be found in their FAQ here.