Exploration of small and medium entities’ actions on sustainability practices and their implications for a greener economy

Purpose: We explore the behaviour and perspectives of SMEs’ owners towards a greener economy and its implications for net zero carbon emissions target.

Design/methodology/approach: We draw on the mirroring concept and 26 semi-structured interviews with SMEs’ owners and managers to provide insights and explore the misalignment between SMEs’ actions and perceptions and the technical architecture (and requirements) of achieving net zero carbon emissions in the UK.

Findings: We find that SMEs lack trust and are sceptical about the government’s net zero emissions agenda. We also find that lack of understanding and perceived benefits, and supply chain complexities (end-to-end emissions) are the key factors hindering SMEs interests in engaging with better carbon emissions
management and environmental management system (EMS). Moreover, pressure from external stakeholders, particularly banks and customers, is a strong driver to draw SMEs more effectively with sustainability and environmental impact disclosure.

Research limitations/implications: The sample is limited to 26 SMEs’ owners operating in seven industries. Future research could explore the result in other industries. Further research could also investigate how the sustainability reports produced by SMEs are useful for different user groups’ decision-making. This study reinforces the social constructionist approach to advance our understanding of SMEs’ actions towards carbon emission management and EMS.

Practical implications: This study shows how government policies and SMEs’ interests can be aligned to achieve the net zero carbon emissions target.

Original/value: This is the first study to examine the perceptions and behaviour of SMEs towards the ongoing pursuit of a greener economy in the UK, including the key factors driving their actions and reasoning.