Just business? Rethinking the role of small and medium enterprise climate action through a just transition lens

Small and medium-sized enterprises (SMEs) are critical to achieving climate action goals but are neglected in policy and academic debates. Current SME climate and energy policies are failing to address the complexity and vulnerability of SMEs in the transition to a low carbon economy, often treating these organisations as a homogeneous group, with dominant narratives that appeal to economic or moral imperatives to decarbonise, without recognising their diverse social roles or needs. This article develops a new analytical framework that integrates relational and situated perspectives with the lens of just transition, foregrounding SMEs as social actors with varied motivations and characteristics, embedded within a multitude of social and material relations. The framework can help to highlight how policies, governance and market arrangements can marginalise some SMEs, and identify how vulnerabilities and inequities might be addressed. We apply the framework to a large qualitative dataset consisting of 167 interviews spanning five sectors and five city-regions in the UK. Our findings illuminate the varied and nuanced role of SMEs within just transitions, across three sets of relations: sectoral, dimensional (space and time) and organisational. A large and diverse group which are conventionally overlooked in climate discourse, SMEs' vulnerabilities warrant renewed attention, while their power to help shape a fair and rapid transition remains under-utilised. The concluding section sets out practical implications for SME climate and energy policy. This includes addressing heterogeneity more systematically, designing targeted support for vulnerable firms, and harnessing SMEs as active climate citizens to deliver transformative change.