New climate disclosure framework launched to help SMEs on road to net-zero

CDP and the SME Climate Hub have launched a new framework to help SMEs measure, report and reduce their climate impacts, amid growing concerns that they are facing numerous decarbonisation barriers that do not impact large firms as much.

SMEs account for around half of employment – and half of business-related emissions – globally

Launched on 25th November, the tool is called the SME Climate Disclosure Framework and will help SMEs in all sectors to measure and report their own direct (Scope 1), power-related (Scope 2) and indirect (Scope 3) emissions. Also included in the tool are the definitions for more complex emissions and climate terminology, plus tailored advice for reducing emissions in line with climate science, taking into account SMEs’ size and sector.

The Exponential Roadmap Initiative and Normative contributed to the development of the tool, alongside CDP and the SME Climate Hub.

The creators of the framework have stated that more and more SME suppliers are being asked to measure, report and decrease their emissions by the large companies who source from them. Corporates are increasingly setting Scope 3 targets and, indeed, will need to do so to have targets verified in line with 1.5C or Net-Zero by the Science-Based Targets Initiative (SBTi).

Currently, around 1,800 SMEs disclose climate information through CDP. It is hoped that the new framework will help to increase uptake. The SME Climate Hub covers some 3,000 businesses and has stated that it will use the framework as a “foundation” for simplifying reporting tools on its site.

The framework being developed is free and modular, meaning that SMEs can complete as many or as few sections in one sitting as they want to. However, there are some minimum reporting requirements. A draft version was tested earlier this year.