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Survey shows small and medium enterprises (SMEs) are concerned about climate change impacts, but few have action plans
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Companies expect the physical impacts of climate change to disrupt their operations over the next five years, most notably harsh and unpredictable weather patterns.
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Small businesses say they can use help to understand the impact of climate change on their business
Chicago, December 7, 2022 /PRNewswire/ – BMO Climate Institute Survey on Small and Medium Enterprises (SMEs) North America Respondents indicated they were very or somewhat concerned about the impacts of climate change, but other priorities and the high cost of climate mitigation meant that few had plans to combat it. means.
In the BMO Climate Institute’s first survey of SMEs’ views on climate change, 69% of respondents expect the physical impacts of climate to disrupt their operations over the next five years, and almost a third Severe weather patterns are already creating challenges, he said. Yet only 28% of businesses have plans to address it. Many small businesses say they don’t know where to start or are focused on more pressing challenges to justify the costs of mitigating climate change.
SMEs make up over 99% of enterprises. usaThey employ about 70% of the total workforce and have created more than half of the net new private sector jobs over the last few decades, yet they feel they have received little support from governments or external partners. increase. them with climate change.
Small businesses need advice and support to move forward on climate change
“The BMO Climate Institute commissioned this study to seek a deeper understanding of how small and medium-sized businesses – critical participants in the successful energy transition – view climate change and its associated challenges and opportunities. I did,” he said. Susan McGeechee, Director of the BMO Climate Research Institute. “We weren’t surprised that most SMEs hadn’t developed a climate change plan yet, but we were surprised to learn that so many SMEs are already feeling the effects, for a variety of reasons. SMEs have a strategy right-sized: They can act now to protect their business from climate-related risks from factors such as changing weather and measures to accelerate the low-carbon transition. I can do it.”
“Our research shows that 35% of companies with a plan are doing so to meet customer expectations, while those without a plan are seeking advice and support to mitigate the impact of climate change on their business. It has become clear that they are looking for Niamh Christophek, Head of US Business Banking, BMO. “BMO’s climate ambition is to be our client’s lead partner in the transition to a net-zero world. We are focused on developing, developing a viable climate: planning and financial resources to support this important work.”
The survey was conducted at a time when many large organizations are taking action to manage greenhouse gas emissions across their supply chains. Through joint disclosure initiatives or independently, large companies are increasingly asking suppliers to report their GHG emissions. It enables suppliers to calculate, monitor, disclose and ultimately reduce the carbon intensity of their products. However, 19% of SMBs see greenhouse gas reductions and other transition risks as the biggest climate-related impacts on their business. Rather, 44% of respondents perceive climate change through the lens of harsh and unpredictable weather patterns, potentially missing climate-related opportunities related to the transition to a low-carbon economy.
“Interestingly, most small businesses have yet to prioritize GHG emissions when considering climate change, but many of these companies are part of the supply chains of much larger organizations,” McGeachie said. said. “This is a gap that needs to be filled as large companies try to understand and remediate emissions along their value chains. This is something small businesses need to start thinking about now.”
Economic and commercial factors are the most important factors in advancing climate action.
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19% of respondents say GHG costs are already impacting economic performance.
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Another 27% expect carbon pricing to become a challenge within the next three years.
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Nearly a third of companies taking action against climate change are doing so with the hope of increasing profitability and sharing value.
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Across North America21% of respondents said investor expectations influenced their decision to adopt climate change policies.
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Many executives surveyed say they are too preoccupied with inflation, supply chains and labor issues to execute their climate strategy.
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Over 90% of business leaders say they are concerned about inflation and rising interest rates.
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Eighty percent of SMEs cited supply chain bottlenecks as their top concern after inflation and rising interest rates, and nearly 70 percent ranked climate change on par with labor shortages.
Small businesses believe banks will help them plan
40% of SMBs are developing climate action plans, but only 19% say they feel supported by the government. The survey found that many leaders see opportunities to partner with financial institutions. 7 in 10 said it could help financial institutions better align their businesses with climate change goals. Of those, 27% said financial institutions are already playing this role. Nearly half of business leaders feel financial institutions can do more to help combat climate change.
The survey also highlights that over 80% of SMBs say they are very or somewhat interested in insights from banks on how to address climate change. .
“A key challenge in meeting national climate change goals is the need to decarbonize and invest in more resilient businesses, especially when the costs associated with addressing climate change are highly uncertain. “There is still a lack of adequate economic incentives for both,” McGeachie said. It makes a difference.”
BMO Climate Institute
Founded in 2021, BMO The Climate Institute is a center of expertise bridging policy, science and finance to help shape markets for climate solutions. The Institute strives to advance climate action with a focus on: Decarbonization, resilience and climate justice.of BMO The Climatic Research Institute survey Polara With over 600 business leaders in the United States, Canada From 18 October to 21 October 2022.
About BMO Financial Group
Serving customers for over 200 years, BMO is a highly diversified financial services provider. North America. Total assets $1.14 trillion Current October 31, 2022, and a diverse and highly dedicated team of employees, BMO offers a wide range of personal and commercial banking, wealth management and investment banking products and services to 12 million customers, providing personal and commercial banking, BMO Wealth Management operates through three business groups. and BMO Capital Markets.
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