Friendly reporting frameworks for SMBs could unlock “significant” progress on the journey to net zero, given the SMB sector represents over 90% of the global economy, according to a new report by ACCA, Sage and the ICC, titled ‘Think Small First’.
It revealed policymakers and large companies need to standardise and simplify carbon reporting and accounting for SMBs or risk millions of businesses being “left behind”.
Challenges faced by SMBs to deliver accurate carbon reporting and accounting include a lack of expertise and dedicated resources.
According to the report, larger organisations must make the task of measuring, disclosing and reducing their greenhouse gas emissions as straightforward as possible.
It suggests four key principles to help policymakers and large companies take on this mission: to work within sectors and industries to ensure SMBs are being asked for information; governments should develop simpler guidance; to automate tool to make information gathering and reporting is straightforward and recognising the challenges for SMBs and enable them to overcome them.
The report calls on the accountancy profession to galvanise and support SMBs, helping them to remove barriers and transparently navigate an increasingly complex landscape as part of global efforts to reduce greenhouse gas emissions.
Helen Brand, chief executive of ACCA, said: “As well as representing about 90% of businesses globally, SMBs also offer more than 50% of employment worldwide. As such, they have a huge role to play alongside the professional accountants who advise them in tackling climate action.
“They need to know what to report, and for standards to be proportionate and focused on information that improves business management. As with big business, we need to avoid disclosure overload, so that users of reports can easily access the information they need.”