SMEGovernanceforNetZero

Small and Medium-sized Enterprises (SMEs) are essential, yet largely neglected actors in the governance of the UK’s energy transition. Collectively, SMEs consume about 50% of commercial and industrial energy, but are exempt from many business-focused energy and decarbonisation policies.

Unprecedented energy price increases are creating an existential threat to many businesses, which are not protected by a price cap. Multiple actors, including banks, industry associations and accreditation bodies have become more involved, with a variety of initiatives designed to support or incentivise strategic changes in SMEs, like investment in lower carbon heating and process technologies, and operational innovations. However, SMEs struggle to find reliable, relevant information on pathways to achieving Net Zero, while policymakers struggle to respond effectively given the sheer heterogeneity of the SME population and the relatively informal nature of firm-level decision-making.

As appetite for action grows in the business community, governance actors are failing to provide the clear guidance, strategic direction, and cross-sectoral coordination that is required.

This research project aims to provide a robust evidence base to support the multi-level governance of SME decarbonisation across the four UK nations. It has five objectives:

1. Map the UK’s SME decarbonisation policy landscape and track changes across the four nations.
2. Produce new empirical data, using detailed place-based studies to investigate SMEs’ existing practices and attitudes towards different sources of advice, support and/or direct provision.
3. Examine the existing and potential role of different stakeholders in each of these governance arrangements, including the role of SMEs in policy decision-making.
4. Develop a new conceptual understanding of how SMEs’ attitudes and actions are shaped by engagement with different forms of governance, support organisations, and types of intervention.
5. Synthesise findings and produce actionable recommendations for policy and practice.