By Hannah Cool, COO at B4NZ & Co-Chair of the SME Sustainability Taskforce

Small and medium sized enterprises (SMEs) are the backbone of the UK economy, driving innovation, creating jobs, and anchoring communities. Yet, when it comes to climate action, they are being asked to step up without the support, infrastructure, or clarity they need.

To unlock their full potential in the net zero transition, we must simplify the path forward, reducing complexity without losing sight of the bigger picture. A single, voluntary emissions reporting standard designed forSMEs can help do exactly that: reduce complexity, unlock finance, and build the trusted data foundation that the wider economy increasingly depends on.

Where’s The Friction Now?

As larger organisations and financial institutions respond to growing climate related regulations, they are passing data demands down their value chains. Increasingly, SMEs are being asked to disclose emissions and environmental data, even though most fall outside formal regulatory scopes.

According to the UK Net Zero Business Census (2024), 37% of UK SMEs have been asked to submit emissions data as part of customer or tender requirements. This is a clear signal: disclosure expectations are cascading, regardless of size or readiness.

The result? A fragmented, inefficient system. SMEs face overlapping, inconsistent, and often conflicting demands. Most lack the time, resources, or guidance to respond effectively, with 66% of SMEs saying the process is too complex (Sage 2024) and 69% unsure on how to measure their emissions at all (FSB, 2021).

At the same time, the data being collected is too often patchy, unreliable and are not comparable. This situation undermines investment decisions, risk assessments, and supply chain planning. So, for the SMEs that do share, their data is often scrutinised without unlocking meaningful incentives or value in return.

This is the data disconnect, and it is holding everyone back.

Instead of enabling climate progress and financial opportunity, the current approach risks creating fatigue and frustration across the SME landscape.

Seeing the System Differently

While attention has focused on corporate frameworks like CSRD and the needs of major organisations, a group of like-minded individuals recognised a critical gap: real impact is built through entire value chains. Without bringing the smallest businesses into the picture, we risk missing the opportunity to drive meaningful, system-wide change.

Rather than designing from the top down, we believe in an SME-first approach, one that removes friction, meets small businesses where they are, and builds the foundation for automated, streamlined data sharing.

We must create the market conditions for secure, trusted, and high-quality data sharing. The pathway to open data models starts with cutting through the noise and simplifying the ask, for businesses, financial institutions, and government alike.

A Smarter Way Forward

That’s why B4NZ and the Broadway Initiative launched the SME Sustainability Data Taskforce. On the 23 June, we’re unveiling a proposal for the UK’s first voluntary SME Emissions Reporting Standard.

This Standard is built with SMEs in mind but aimed at market leaders: banks, corporates, and government. Why? Because their adoption will drive alignment, reduce duplication, and make life easier for small businesses.

Developed in partnership with government, industry, and civil society, the Standard aims to:

  • Lower the burden of emissions reporting on SMEs
  • Improve the quality and comparability of data
  • Prioritise primary data, not estimates or proxies

It’s about enabling smarter decisions, unlocking finance, and accelerating action without overwhelming the people & businesses at the heart of the UK economy.

One Path, Many Benefits

The UK SME Standard is designed to deliver that, with a “create once, share many” approach, and it’s already gaining traction. This month, we were pleased to present The SME Data Taskforce and our work to the UK Net Zero Council. The Council has considered the Taskforce’s work recognising the need for a common, simplified emissions reporting standard for SMEs to help unlock commercial opportunities and enable larger businesses to meet their reporting requirements. They agreed this should align with international standards and be proportionate for SMEs.

B4NZ and Broadway Initiative will seek user and stakeholder views over the summer on a simplified and standardised carbon reporting approach that aligns this steer.

This growing momentum reflects a clear consensus: a common approach & reducing barriers for SMEs isn’t just desirable, it’s essential.

Why It Matters Now

This isn’t just a reporting framework, it’s foundational. It lays the groundwork for:

  • Smarter, faster finance– Lenders and investors gain the confidence to assess sustainability performance, unlocking what Sage (2024) have termed the “Virtuous Cycle”: a reinforcing cycle of sustainability reporting, sustainable finance, and climate action.
  • Streamlined compliance– By aligning with frameworks like PPN 06/21, SMEs can meet multiple requirements in one go, saving time, reducing admin.
  • More resilient supply chains– Corporates get clearer, more comparable emissions data from their SME suppliers.
  • Policy readiness– SMEs are better prepared for tomorrow’s regulations and customer expectations.

At its core, the Standard enables small businesses to do more with less effort and gives larger institutions the confidence to support them. Most importantly, it creates a shared language for energy & emissions data: clear, credible, and future proof.

Looking Ahead

Our approach is SME-first and future-ready. The Standard is designed to drive consistency across digital tools and enable an environment for automated data sharing, saving time, building trust, and unlocking opportunity. It also creates a pathway to smart data sharing and the conditions for open data in the future.

Stay tuned for more on our approach, partners, and plans to drive market-wide adoption, alongside how this work connects to other critical market programmes.

Mark your calendar: 23 June. We will share the full report, the story behind the Standard, and how you can get involved.

Because if we get this right, we will not just unlock the support to cut emissions, we will unlock opportunity, build resilience, and empower the businesses that are essential to the UK’s economic and climate future.

Contact : Action@b4nz.co.uk