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Climate Action

CDP launches climate disclosure framework to empower SMEs to join race to net-zero

The new framework enables small and medium-sized enterprises (SMEs) to take climate action through environmental disclosure and science-based target setting.

  • 30 November 2021
  • Olivia Story

The new framework enables small and medium-sized enterprises (SMEs) to take climate action through environmental disclosure and science-based target setting.

The new CDP climate disclosure framework has launched in collaboration with the SME Climate Hub and created in partnership with the Exponential Roadmap Initiative and Normative.

CDP states SMEs need to take climate action to build business resilience, gain competitive advantage, keep up with supply chain demands and policy regulation, and meet consumer expectations.

The climate disclosure framework aims to empower SMEs to make strategic and impactful climate commitments, track and report progress against those commitments, and demonstrate climate leadership.

The framework has a modular design to provide flexibility for SMEs and data requesters to tailor the use of the framework to their disclosure needs.

Sonya Bhonsle, CDP’s Global Head of Value Chains and Regional Director of Corporations, commented: “We are delighted to have launched a framework in partnership with the SME Climate Hub that caters specifically to the sustainability reporting needs of SMEs.”

“We hope the framework empowers SMEs to take climate action, and in turn, increases their resilience to climate change and allows them to play an active role in the transition to a low carbon economy.”

SMEs make up to majority of the global economy, as they represent 90% of businesses and more than 50% of employment worldwide.

With supply chain emissions being 11.4 times higher than operational emissions, many large companies want their suppliers – often SMEs – to measure, report and cut down their own emissions - cascading climate action down the supply chain.

SMEs are major engines of value creation, accounting for between 50% and 70% of value added in OECD economies and contributing to, on average, 33% of GDP in emerging economies.

Therefore, it is crucial SMEs are equipped with the tools and resources needed to set commitments aligned with a 1.5°C future and disclose environmental performance.

María Mendiluce, CEO of We Mean Business Coalition, a co-founding partner of the SME Climate Hub, said: “Over 3,000 companies have joined the SME Climate Hub, committing to cut carbon emissions in half by 2030 and reach net zero emissions by 2050 or sooner.”

“With scalable, accessible tools like the CDP reporting framework, these businesses can move from commitment to action, and effectively track progress to meeting our collective ambition.”