Sustainability and decarbonisation are increasingly slipping down the priority list for UK small and medium-sized enterprises (SMEs), according to recent research

CREDIT: This is an edited version of an article that originally appeared in Envirotec

While SMEs make up 99% of the UK business population, slowdown in their climate action progress could significantly undermine the government’s net zero ambitions.

Many smaller firms are currently prioritising short-term survival in the face of rising costs, inflationary pressures and wider economic uncertainty. As a result, long-term environmental planning is often deprioritised despite growing regulatory expectations and increasing pressure from larger organisations to decarbonise supply chains.

Barriers to SME Decarbonisation

Although many SMEs recognise the importance of sustainability, they often struggle to translate intent into action. A key challenge is limited access to practical tools, expertise and guidance needed to implement meaningful change.

Findings suggest that even modest, targeted support could significantly accelerate progress. However, the broader issue appears structural: many SMEs are willing to act but lack the time, capacity and resource required to move forward effectively.

Key Insights from SME Sustainability Programmes

Programme findings highlight several consistent themes across SMEs. Experts posit that small, targeted investments combined with specialist support can deliver disproportionately strong results. However, approaches must be tailored rather than standardised, as businesses vary widely in sector, size and capability.

Many SMEs remain uncertain about where to begin or how to measure their environmental impact. Resource constraints – particularly limited time and staffing – continue to be the most significant barrier to progress.

In addition, “greenhushing” is becoming increasingly common, with some firms hesitant to communicate their sustainability efforts publicly. Fragmented or incomplete carbon data further complicates decision-making and slows implementation.

The Case for Policy Intervention

Experts are now calling for a shift in national policy to better support SME decarbonisation. There is growing consensus that greater investment in small-scale, high-impact sustainability support could unlock meaningful progress. Proposals include targeted incentives such as sustainability-linked business rates relief and the development of a national SME sustainability toolkit designed to simplify action and improve consistency across sectors.

Without more accessible support structures, there is a risk that SMEs will continue to fall behind on decarbonisation efforts – potentially jeopardising wider national climate goals.