Small Businesses & Climate: Underrated Contributors, Undeniable Stakeholders

Written By Sydney Shen

Introduction

When people think about climate change, they often picture oil giants or massive factories. Few consider the startups on the corner of the block—the local coffee shop or the neighborhood manufacturer. Yet, according to the Pew Research Center, small businesses (firms with fewer than 500 employees) accounted for 99.9% of U.S. firms and employed over 56.4 million workers in 2021 (Leppert, 2024). Although their individual footprints seem minimal, their collective impact on emissions, energy use, and industrial waste is significant. With over 33 million small businesses in the U.S., they are undeniable stakeholders in the fight against climate change and hold a major share of the national economy.

The Hidden Environmental Impact of Small Businesses

Small businesses are often overlooked when identifying the sources of carbon emissions. Many assume their environmental impact is minimal due to their size, but this overlooks their combined effect. The Organisation for Economic Co-operation and Development (OECD) states that small and medium-sized enterprises (SMEs) are responsible for an estimated 60-70% of industrial pollution globally (Wildnerova et al., 2024). From single-use packaging to inefficient operational processes, small businesses contribute significantly to environmental degradation—often without realizing the scale of their impact.

While many states have begun implementing sustainability policies requiring green infrastructure or renewable energy, this legislation often centers on large corporations. This focus ignores the role of small businesses, leaving a critical piece of the climate puzzle unaddressed.

Fast Shift of Market Expectations

A successful business must attract and retain customers. Today's consumers increasingly prioritize sustainability, shifting their purchases toward businesses they perceive as "environmentally-friendly." According to NielsenIQ, 81% of global consumers believe businesses should play a role in improving the environment (Fernandez, 2023). In an age dominated by social media, a consumer's values, especially among younger generations, directly influence their buying decisions.

The stakes are also high on the business-to-business front. Large corporations are increasingly held accountable for the sustainability of their entire supply chains. As a result, they prefer to partner with small businesses that have adopted green practices and often establish sustainability standards that their suppliers must meet to win contracts.

Why Now Matters

Small businesses are the backbone of the U.S. economy and are crucial for driving change from the ground up. By embracing sustainability, they can collectively alter our projected climate trajectory, significantly decreasing carbon emissions and waste while strengthening community ties. This is not just about doing the right thing—it is a strategic move towards resilience, competitiveness, and long-term viability. The leadership and influence of small businesses will not only shape the future of commerce but also the health of our planet.

Make a change through Lead Green.

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