Experts have called for the UK government to overhaul its decarbonisation strategy for small and medium-sized businesses.
In a study published in the journal Energy Research and Social Science, they criticise current green initiatives for failing to deliver lasting emissions cuts despite receiving £1.57 billion in support from the European Regional Development Fund from 2014-2022.
Interventions have been too focused on short-term quick fixes such as getting SMEs to switch to LED lightbulbs rather than more transformative, practice-orientated interventions, the researchers say.
They criticise government support for being too narrow in scope, offering 'one-size-fits-all' provision despite the diverse nature of SMEs, and over reliance on short-term advice and micro-grants while failing to target specific sectors, supply chains and micro-geographies such as shopping centres.
They say support tends to target SME behaviours (eg improving energy efficiency) or adopting new materials or technologies (eg switching to LED lightbulbs), which the researchers characterise as 'low hanging fruit' compared with more systemic, whole-business approaches.
Monitoring and reporting on these initiatives is also ineffective due to inconsistent metrics for success and the evaluation of long-term impact is limited.
The researchers therefore urge UK policymakers to go "beyond changing lightbulbs" with initiatives that will embed climate action into the everyday practice of SMEs.
Their recommendations include a call for existing net zero hubs and local authorities to pilot new support schemes co-designed with SMEs rather than just being for them.
They suggest that policymakers could use existing data to segment SMEs into decarbonisation profiles ('carbon complacent' vs 'carbon nimble') so that resources are used to make the greatest rather than easiest impact.
They recommend the government invest in training accountants, trade bodies and energy advisors to act as long-term decarbonisation partners for SMEs, supporting them in embedding new practices in the long run.
They also call for decarbonisation initiatives to be aligned with wider policies on procurement, regulation and skills, which would lock in change.
They add that challenges in reporting and monitoring the success of interventions could be met through government-funded digital platforms to give SMEs access to shared tools for emissions tracking, peer benchmarking and practice-sharing.
Following the recent replacement of the ERDF with the Shared Prosperity Fund, the researchers argue that now would be opportune time for a shift in policy.
Professor Steffen Boehm from the University of Exeter Business School said: "Our recommendations for UK policymakers are a blueprint for how government-funded projects supporting SMEs to decarbonise should be designed and what that should look like.
"What we find frustrating in the carbon transition policy for SMEs is that everything seems so short term: there's no follow up, no proper evaluation and no long-term strategy.
"We look at the big power sector, which successive governments have done really well to decarbonise. This is because there was a long-term strategy based on the Climate Change Act 2008.
"Given that the vast majority of companies in this country are SMEs, we'd like to see similar leadership and a long-term strategy for the SME sector that movers beyond short-term fixes like changing lightbulbs and embeds decarbonisation into the institutional structures and everyday practices of SMEs."
