Somewhere, a restaurant owner is switching to local suppliers because they are faster and fresher. A leathercrafter has stopped using certain dyes because they were making workers sick. Meanwhile, a small manufacturer is cutting energy use because the bills have become unbearable. None of these business owners would necessarily describe what they are doing as sustainability. Yet, this subtle green shift taking place inside small and medium-sized enterprises around the world is real. In this light, it is crucial to look into scaling up these changes and mainstreaming sustainability in SMEs.

The Quiet Green Shift of SMEs

Small and medium-sized enterprises are not a footnote in the global economy. They make up 90% of businesses worldwide, create two out of every three jobs, and support the livelihoods of over two billion people. They also account for up to 50% of global emissions, which means what they do, or do not do, collectively matters.

What is interesting is that many small enterprises are already acting. A study on sustainable practices in SMEs found that resource efficiency (reducing waste, cutting energy use, sourcing more carefully) is one of the most common entry points for small businesses engaging with sustainability.

The motivations are often practical rather than ideological: lower costs, better relationships with customers and suppliers, and compliance with local regulations. Research on sustainability drivers across SMEs confirms that customer pressure, supply chain expectations, and a genuine desire to reduce harm to local communities are among the most consistent factors pushing small businesses toward greener practices. Most notably, these changes often happen long before any formal ESG framework enters the picture.

This suggests that the green transition does not have to wait for top-down corporate sustainability strategies to trickle down. In many cases, the quiet green shift is already happening in small ways. It is growing from the ground, through small businesses responding to immediate, human-scale pressures in their own communities.

The Reality of Sustainability in SMEs

The complete picture, though, is more complicated than a simple success story. A landmark report launched at COP29 by the International Chamber of Commerce (ICC) and Sage revealed a stark paradox: while 86% of SMEs say sustainability is important to their business, only 9.1% formally report on their environmental impact. The two biggest barriers cited were cost and complexity. And unfortunately, both have been growing, not shrinking, year on year.

The gap between intention and action is especially pronounced in developing economies. A qualitative study on environmental sustainability barriers in SMEs in developing countries found that financial constraints and a lack of access to relevant information were the defining obstacles. An OECD report on SME sustainability reporting echoes this situation. It finds that micro and small businesses in emerging markets face particularly severe barriers: limited resources, lack of expertise, and the burden of navigating multiple reporting frameworks simultaneously.

The barriers are consistent with what has been happening on the ground. The ICC and Sage report reveals that only 1.2% of SMEs are currently accessing green finance, which could help them act more ambitiously.

Furthermore, the academic literature has, until recently, paid far more attention to SMEs in wealthy countries than to those in the Global South, where the challenges are steepest and the stakes arguably highest. Without proper information and education, the risk of greenwashing among SMEs rises if small businesses charge toward “sustainability” as a mere trend. 

Cultivating the Potential

The green shift is real, but without deliberate investment in making sustainability accessible (financially, technically, and linguistically) to the small businesses that form the backbone of most economies, it will remain quiet. And quiet, in this case, is not enough.

If this green shift is to become something more than a series of isolated, individual decisions, it needs support. A systematic review of sustainability in SMEs highlights several critical enablers to make it happen. They include access to finance, peer networks, and government support. Unfortunately, many small businesses, particularly in lower-income countries, simply do not have adequate support.

What that support needs to look like, specifically, matters. Policy support would require balance between demand for sustainability compliance from small businesses and enabling instruments that encourage the changes.

On financing, the OECD identifies green loans, sustainability-linked loans, tax incentives, and targeted subsidies as the most effective instruments for helping small businesses fund the transition; particularly when channeled through public financial institutions that already have existing relationships with small businesses on the ground. In sub-Saharan Africa, for example, blended finance models are already demonstrating what’s possible. It combines loans, grace periods, and hands-on technical assistance to help small agribusinesses adopt greener practices without the upfront cost becoming a dealbreaker.

Furthermore, no less important is education and capacity development. The gap is not simply awareness, it is practical. Beyond directionless and uncoordinated moves, informed decisions on realistic yet bold changes for specific results would be more effective for small businesses. This includes targeted training for SME owners and the bankers and the loan officers who serve them, so that green finance stops feeling like something designed exclusively for large corporations. After all, the world is already changing, and the businesses are already moving. The systems around them need to catch up.

Editor: Nazalea Kusuma

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