Building momentum for SME climate action at Climate Week NYC

Micro, small and medium enterprises (SMEs) make up more than 90 per cent of businesses worldwide and provide around 70 per cent of jobs. They are central to local economies and to the daily lives of communities. Yet when it comes to climate action, they face a persistent obstacle. Access to finance is one of the biggest barriers preventing SMEs from investing in clean energy, cutting emissions or building resilience.

The scale of the opportunity is vast. The green finance opportunity gap for SMEs is estimated at $US789 billion. Over half identify a lack of finance as a top barrier to climate action. Many lack collateral or a track record with banks. Others face high costs or complex application processes. Informality in the sector also means that reliable data is often missing, leaving lenders reluctant to engage. The result is that SMEs are left exposed to climate shocks while also losing ground in the markets of the future.

This week in New York, the Climate-Proofing SMEs campaign is spotlighting some of the practical solutions that can assist in closing this gap. Through the new SME Finance Sprint – a focused drive to curate and highlight scalable and high-impact financing solutions – partners across finance and business are working to expand access to funding, strengthen capacity and embed SMEs in climate solutions.

“For too long, small businesses have carried the weight of the transition without the finance to match their ambition. The Finance Sprint is about breaking that cycle and showing what it takes to move capital to where it matters,” Nigar Arpadarai, Climate High-Level Champion for COP29.

The first chapter of the Sprint, launched at London Climate Action Week in June, set out the size of the challenge and the scale of the opportunity. In New York, a further two chapters will launch focusing on how global finance can flow more effectively at the last mile. One new track looks at the role of multilateral development banks and development finance institutions in unlocking concessional lending, guarantees and blended finance that allow commercial lenders to take on more risk. The other examines how banks and investors can design products tailored to SMEs, supported by risk-sharing mechanisms and technical assistance.

Focusing on concrete financial instruments, partnerships, and solutions already being delivered will help inspire more action. These include pilots of lending products, alignment among banks and development institutions on blended finance- solutions that can be scaled and showcased at COP30 in Belem.

The good news is that collaboration is already taking shape across multiple regions and sectors. In Latin America, Fundação Getulio Vargas’ Center for Sustainability Studies (FGVces) is supporting more than 240 small coffee producers, primarily women-led SMEs, in Brazil to comply with the European Union Deforestation Regulation (EUDR) through the ARABICA-CANEPHORA project, promoting deforestation-free supply chains.

B Lab, the non-profit behind the global B Corp movement, is strengthening SME capacity in Chile and Colombia through “Empresas B por el Clima,” while also supporting B Corps in the United States to make a shift to climate-friendly finance.

In Asia, Green Transformation Systems (GXS) has launched AI-powered tools through its Climate SMEs Hub, while SME Climate Hub (SMECH) has rolled out a dedicated Food and Beverage Sector Space, funded in part by Walmart, while running a call for evidence to gather academic insights on the business case for SME climate action and how governments can best support SMEs to address their emissions and climate risk exposure ahead of COP30.

Global networks are also stepping up. The World Business Council for Sustainable Development’s (WBCSD) Climate Drive has expanded with a Simplified Chinese guidebook and a new webinar series reaching 300 businesses, including many SMEs, with 90 per cent reporting increased confidence in decarbonization. Supplier Leadership on Climate Transition (LOCT) has delivered training to more than 5,000 learners from 650 SMEs worldwide, while preparing to launch a new community platform to support suppliers with implementation.

Partners are also making the case for SMEs in the wider value chain. The Exponential Roadmap Initiative and Environmental Defense Fund are convening a Climate Week panel on tackling Scope 3 emissions, the biggest hurdle to supply chain decarbonization, where SME suppliers will be front and centre. Regions4 has published new analysis on how subnational governments can help SMEs adapt to climate risks. And Giki is hosting a virtual workshop to help SMEs build their transition plans.

Building on the strong momentum from the Climate-Proofing SMEs Campaign, the COP30 Presidency will continue these vital efforts as part of the Action Agenda. Throughout the week, SMEs will be a key focus of many conversations, including a special COP30 Presidency Accelerating Solutions Roundtable, making their voices and solutions central to the climate dialogue.

If governments, banks and corporates channel finance towards SMEs, these businesses can drive climate action from the ground up. It’s clear the solutions are within reach – the task now is to scale them on the road to Belém.

Discover the campaign

For further information, please contact us here.