Joint News Release from EDC and The Conference Board of Canada
Canada’s successful transition to net-zero by 2050 hinges on the active involvement of small and medium-sized enterprises (SMEs), yet the majority of SMEs are still in the early stages of their emission-reduction efforts, according to new research from The Conference Board of Canada, in collaboration with Export Development Canada (EDC).
“SMEs represent untapped potential in the journey towards a net-zero future,” stated Michael Burt, Vice President at The Conference Board of Canada. “However, their capacity to support Canada’s carbon reduction efforts is often overshadowed by the substantial emphasis placed on larger enterprises, which leaves SMEs with fewer resources and insufficient support necessary to advance their sustainability transitions.”
In response to the limited information on emission-reduction efforts by SMEs, The Conference Board of Canada and EDC developed a net-zero maturity framework. This framework was then used in a survey of 381 Canadian SMEs to identify where they are in their net-zero transition and how aware they are of the steps they need to take to get to net-zero emissions.
“The vast majority of the surveyed SMEs are still in the early stages of their emission-reduction journey, which could be putting them in a competitive disadvantage in an increasingly environmentally conscious economy,” according to Stuart Bergman, EDC’s Chief Economist and Vice-President.
Only 18 percent of those surveyed measure greenhouse gas (GHG) emissions. The most common actions undertaken are ones that are considerably easier to execute, such as recycling and reducing waste and energy consumption.
“For trade-exposed SMEs, compliance with climate regulations is not only essential for securing access to global markets, but also for ensuring their own viability as sustainability is becoming a business imperative,” stated Bergman.
SMEs face a myriad of challenges in implementing GHG-reduction strategies, but the survey results pinpoint financial constraints and limited resources as the greatest barriers. Another significant obstacle for SMEs is their limited familiarity with emission-reduction practices and the navigation of regulatory frameworks. This highlights the importance of providing them with tailored knowledge and solutions that will support their low-carbon transition.
The main purpose of this project was to use the net-zero maturity framework to monitor SMEs that are engaged in trade. With GHG emissions gaining prominence in trade agreements and as the prospect of stricter climate change regulations grows, trade-exposed SMEs must be prepared to transition to low-carbon pathways. Tracking SME emissions and their transition progress are essential to ensuring Canadian businesses maintain their global competitiveness in international trade.
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