UK SMEs Improve Sustainability Scores but Struggle

UK small and medium-sized enterprises (SMEs) have boosted their overall sustainability performance over the past five years. However, progress on measuring indirect supply chain emissions, known as Scope 3, is lagging, creating data blind spots for larger businesses.

The findings come from sustainability platform FuturePlus, which analysed data from UK SMEs. Performance was measured as a percentage across five key areas: climate, environment, social, economic, and diversity & inclusion.

Performance Scores Show Divergence

SMEs scored 66 out of 100 on responsible business and governance. Their scores were significantly lower for environment and climate, at 38 and 37 out of 100 respectively. Company size was not a reliable indicator of success. Many micro-businesses with fewer than 10 employees achieved total scores above 360 out of 500, outperforming much larger firms.

Alex Smith, chief executive of FuturePlus, stated that SMEs are not short on willingness to act. "Sustainability performance has improved significantly over the past five years, and some of the smallest businesses in our dataset are achieving extremely strong scores," he said. Smith added, "But SMEs cannot tackle the hardest sustainability challenges alone. Scope 3 depends on data, expertise and collaboration across entire supply chains."

The Scope 3 and Action Gap

The research identified Scope 3 emissions as a major hurdle. Forty-two percent of the SMEs analysed failed to measure their supply chain emissions within their target timeframes. FuturePlus warned this creates ramifications for the wider value chain, as larger companies rely on supplier data to understand their own total emissions.

Turning environmental and social goals into verified actions also proved to be a slow process. The analysis found SMEs took an average of 211.5 days to enact verified changes. The platform noted that incomplete measurement risks 'greenwashing by omission', where businesses cannot demonstrate success with complete data.

Separate research from the Small Business Institute estimates that 65% of SMEs plan to do more on environmental and social issues in the coming year, with 45% having already increased efforts over the past 12 months. More than a third of SMEs believe these issues are having a growing financial impact on their business.

Barriers and Policy Warnings

The report also revealed common barriers for small businesses, including complexity of language, lack of time, insufficient funding, and inaccessible support. These challenges come amid UK Government plans to alter public procurement rules.

From 1 January 2027, the government will remove some environmental requirements for contracts in favour of social value metrics like job creation. The rules have been simplified, and the threshold for certain requirements has been raised to contracts worth £1 million and above. The government says this aims to help smaller firms that struggle with "layers of red tape".

FuturePlus has warned businesses not to deprioritise these efforts entirely. Alex Smith argued that making public procurement simpler is welcome, but pitting jobs against environmental responsibility is a false choice. "Government contracts aren’t the golden goose for every small business, and ripping up your environmental plans to chase one opportunity will leave you less competitive for the next," he said.

Smith called for more government support, saying, "Government needs to give small businesses the infrastructure, practical support and consistent policy signals to turn ambition into action."

Tricia Blatherwick, chief evangelist at AutoGen AI and a former commercial bid lead, added context on tendering. She noted social value can account for up to 10% of the score in a public-sector tender. "Buyers don’t just want to see the commitments you’re making." she said, emphasising the need for evidence and strong reporting.