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Most small and medium-sized business (SMB) leaders say their companies do not measure carbon emissions. This could severely hamper their ability to contribute to tackling climate change, according to new research by YPO, sponsored by EY.

The report from YPO, a global leadership community of chief executives, shows that only 4% of its members surveyed were able to provide data on their companies’ direct and indirect emissions (scope 1-3). Only 5% of chief executives surveyed measure the level of their businesses’ renewable energy use, so they were not able to report progress on their energy transition.

As environmental regulatory requirements intensify, the research in YPO’s inaugural Global Impact Report also highlights a potential lack of resources and understanding of how to report on these issues among SMBs. Less than a third (28%) of business leaders indicated that they have a social and environmental committee on their board of directors, while only 27% reported having a full-time sustainability leadership position.

YPO Global Chairman, Raymond Watt, said:

“Our members are at the core of many economies around the world and want to play their part in tackling the environmental emergency, but currently the majority simply don’t have the data and support to do so.”

“This inaugural report provides an essential baseline for YPO member businesses to begin benchmarking their environmental impact and to make a positive difference. We are committed to supporting them to effectively measure their energy use and carbon emissions, including exploring technological data and reporting solutions.”

“As well as taking concerted company action to help to stem climate change, it will only be a matter of time until regulatory and supply chain requirements make environmental reporting a commercial as well as a climate imperative.”

“Although it currently focuses on larger organizations, the regulatory pressure to disclose environmental data is intensifying. This year, thousands of multinationals with businesses in Europe must start reporting their climate impact under the Corporate Sustainability Reporting Directive (CSRD). In the United States, the Securities and Exchange Commission is expected to adopt climate disclosure rules.”

Orlan Boston, YPO member and Senior Advisory and Global Client Service Partner at EY, said:

“As well as more regulatory requirements, customer pressure on companies to provide environmental, social and governance performance transparency and make progress against it is intensifying.”

“Small and medium-business leaders should evaluate the opportunities and risks for their own individual businesses and stakeholders, which will enable them to execute a targeted strategy of improvement.”