Small Steps, Big Impact
In an era where sustainability is no longer optional, small and medium-sized enterprises (SMEs) face growing pressure to report, measure and reduce their carbon emissions. Though many SMEs believe carbon management is beyond their capacity, small changes can lead to significant improvements. With the right tools and support, SMEs can manage and reduce their emissions while creating a positive business impact.
While individual actions may seem small (like optimising energy usage or reducing waste), when scaled across many SMEs, the cumulative impact can be substantial. Additionally, these changes can result in cost savings such as lower energy bills. So, it can be a win win, improving bottom line while meeting sustainability goals.
Why is Carbon Management so Important for SMEs in Key Sectors?
Carbon management is no longer a niche concern but a business priority for SMEs in every industry. While regulations and customer expectations are often tailored to specific sectors, the need for carbon reduction cuts across the board. SMEs play an essential role in reducing emissions, particularly given that supply chains contribute up to 80% of global carbon emissions. Whether in construction, utilities, or other industries, businesses that adopt sustainable practices are better positioned to win contracts, comply with regulations, and strengthen their long-term competitiveness.
Utilities Sector
The utilities sector is responsible for a significant share of global carbon emissions. According to the International Energy Agency (IEA), the energy sector accounts for around 73% of global CO2 emissions. This puts immense pressure on smaller suppliers within the sector to demonstrate their sustainability efforts.
For instance, suppliers in the renewable energy chain can enhance their market position by reducing emissions and adopting sustainable practices. Achilles’ Carbon Management Module helps SMEs begin their carbon journey by offering cost-effective solutions for reporting and calculating emissions. For those ready to take further steps the Achilles’ Carbon Reduce Programme supports deeper carbon reductions and provides ISO 14064 accreditation, ensuring SMEs can credibly verify their progress.
Construction Sector
The construction industry is another sector under scrutiny. With around 38% of global emissions tied to construction, decarbonising this sector is important. SMEs, which often supply materials or subcontract services, can have a major impact on reducing Scope 3 emissions generated throughout the supply chain.
Using Achilles’ Carbon Management Module, SMEs in construction can baseline their emissions, optimise operations, and identify areas for waste reduction. As companies move toward greener building practices, those that progress to the Carbon Reduce Programme gain an edge in the marketplace by achieving verified reductions, especially when bidding for large contracts.
Challenges Facing SMEs on the Carbon Reduction Journey
Limited Resources and Expertise
One of the primary challenges SMEs faces is the lack of dedicated resources to tackle carbon reduction. Many smaller businesses operate on tight margins, with limited budgets for sustainability initiatives. While large corporations may have sustainability officers or teams, most SMEs don’t have in-house expertise to navigate the complexities of carbon management. This can make the prospect of reducing emissions seem out of reach.
Moreover, the cost of adopting advanced technologies, such as switching to electric vehicles (EVs) or renewable energy, can be difficult for smaller companies without immediate returns. A Carbon Trust report suggests that SMEs often underestimate the potential savings from energy efficiency measures. Energy efficiency offers the opportunity to reduce costs by up to 20% through simple actions like upgrading lighting or improving insulation
Understanding of Scope 1,2 and 3 Emissions
SMEs at the start of their journey are primarily concerned with measuring and reducing Scope 1 (direct) and Scope 2 (indirect) emissions. These include emissions from their own energy use, transportation, and manufacturing processes.
Large organisations or those with a more mature carbon journey focus on reducing Scope 3 emissions from their supply chains.
Understanding and controlling these indirect emissions requires deep visibility into supply chains and collaboration with suppliers, many of whom may also lack expertise in carbon management.
Explore how Achilles can support reducing scope 3 emissions.
Regulatory Pressure and Reporting Credibility
As governments around the world set ambitious climate targets, compliance with carbon reduction regulations has become a top priority. In markets like the UK, companies are being asked to align with Net Zero targets, and many are unprepared to meet these goals. Regulations like the Task Force on Climate-related Financial Disclosures (TCFD) and incoming Sustainable Finance Disclosure Regulation (SFDR) will soon require businesses to disclose their climate risks and strategies. This will undoubtedly add compliance costs.
The Achilles Carbon Reduce Programme helps SMEs reduce emissions and obtain ISO 14064 accreditation. This enables them to report their progress credibly and meet industry standards.
Achilles Case Study: Reconomy Group’s Carbon Reduction Journey
The Reconomy Group, a leader in recycling and resource management, partnered with Achilles to streamline its carbon reduction efforts. By leveraging the Achilles Carbon Reduce Programme, Reconomy was able to measure and report its carbon footprint, significantly reducing emissions within its global supply chain.
Through ongoing participation Reconomy achieved a 15% reduction in emissions in just 18 months, setting a solid foundation for continued sustainability efforts. This demonstrates the benefits from a structured, science-based approach to carbon management.
The Business Case for Carbon Reduction
- 1. Cost Savings and Operational Efficiency
Lowering energy consumption not only reduces emissions but also directly cuts operational costs, improving profitability in the long run.
Additionally, companies that reduce their emissions may qualify for government incentives or tax benefits designed to reward sustainable practices, further driving down costs.
- 2. Increased Market Competitiveness
As more large companies work to cut their Scope 3 emissions, small and medium-sized enterprises (SMEs) can gain an edge. Those that show real carbon reduction practices will stand out in the market. According to the CDP Supply Chain Report, 65% of major companies are now actively looking for suppliers that can help them meet their sustainability goals.
This creates great opportunities for small and medium-sized enterprises (SMEs). They can show their carbon reduction efforts through independent verification. One way to do this is by getting the ISO 14064 accreditation from the Achilles Carbon Reduce Programme.
By becoming more sustainable, SMEs increase their chances of being selected by large corporations for contracts, improving their market position. In industries like construction and utilities, where emissions reduction is becoming increasingly mandatory, these capabilities are key for future growth
- 3. Enhanced Brand Reputation
Sustainability is increasingly important to consumers, investors, and stakeholders alike. Studies show that 83% of consumers prefer to buy from companies that actively work to reduce their carbon footprint. SMEs that take early action on carbon reduction can use this as a marketing tool, strengthening their brand reputation and attracting more environmentally conscious customers.
- 4. Future-Proofing Against Regulatory and Market Changes
Global rules on carbon emissions are getting stricter. Businesses that act early to reduce their impact will be better prepared to adapt. Those that delay risk regulatory fines and the cost of implementing drastic changes to catch up with new standards.
As climate-related policies become more stringent, those that have already made progress on sustainability will avoid the sudden financial impact of mandatory changes.
Take Action with Achilles
For SMEs, the path to carbon reduction doesn’t have to be overwhelming. With incremental steps and the right support, businesses can make a tangible impact. The Achilles Module and Carbon Reduce Programme provides the framework, tools, and verification SMEs need to take control of their carbon emissions and build a sustainable future.
SMEs can ensure they remain competitive, compliant, and aligned with global climate goals. Start your carbon reduction journey with Achilles today and be part of the solution to a more sustainable world.
