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Small business agencies from Azerbaijan, Brazil, and the International Trade Centre (ITC), a UN agency, have signed a declaration at COP29 in Baku, marking the first coordinated international effort to help small- and medium-sized enterprises (SMEs) adapt to sustainable business practices.
The Joint Declaration on Baku Climate Coalition for SMEs Green Transition should help small businesses fully engage in the shift to sustainable business models ahead of COP30 in Brazil next year.
SMEs globally are required to adapt to climate regulations but often lack the resources available to larger corporations.
“Small businesses form the backbone of most economies and the bulk of suppliers along global supply chains, so their action – or inaction – when it comes to climate change matters,” said Pamela Coke-Hamilton, executive director of the International Trade Centre (ITC), the UN agency that co-signed the declaration.
The coalition, initiated by Azerbaijan’s Small and Medium Business Development Agency (KOBİA), addresses several obstacles facing SMEs in the green transition, including access to finance, technology and expertise. The agreement highlights South-South cooperation and bioeconomy solutions as methods to integrate small businesses into green supply chains.
Brazil’s participation, through its small business agency SEBRAE, coincides with the country’s preparation to host COP30. “The green transition will only happen if small businesses are contemplated in the value chain,” said Decio Lima, SEBRAE’s president. Micro-, small-, and medium-sized enterprises (MSMEs) in Brazil contribute 47% to business value added and 63% to business employment.
The declaration represents a development in climate policy through its recognition of SMEs as a distinct group requiring specific support for environmental adaptation. Previous climate initiatives have typically centred on large corporations, with less consideration given to smaller businesses’ challenges in implementing sustainable practices.
Orkhan Mammadov, chairman of KOBİA, indicated that the green transition could enhance SMEs’ competitiveness and market access in spite of implementation challenges. The agreement includes provisions for capacity building and improved access to green finance.
The three organisations have also signed additional cooperation agreements to support the declaration’s implementation, including measures to assist SMEs in developing countries with their low-carbon transition.
The coalition’s establishment comes as businesses face requirements to reduce emissions and adapt to environmental regulations. Its effectiveness may influence whether small businesses become participants in climate action or encounter difficulties in the transition toward net-zero emissions.
