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SMEs Stepping Up: The Rising Tide of Green Business Practices

Sebastian Schmidt

ISTARI.AI data used by top academic institutions.

18. September 2023

65 years
The amount of time it would take humans to complete the task undertaken by machine learning algorithms used by ISTARI.AI.
The percentage of greening SMEs that mention solar energy on their websites.

In 2018, Mantis World, a UK-based textile wholesaler, set an ambitious goal to halve its carbon footprint by 2030. Impressively, they achieved this target in just two years. This success story highlights the potential impact of small and medium-sized enterprises (SMEs) in addressing climate challenges. According to OECD estimates, SMEs contribute about 40% of business-related carbon emissions in the EU, making their involvement crucial for global climate commitments.

The challenge of measuring SMEs’ progress in sustainability is significant, as smaller firms often lack comprehensive sustainability reporting. To bridge this gap, the OECD partnered with ISTARI.AI, a startup, to develop a new indicator of environmental engagement. Utilizing machine learning algorithms, ISTARI.AI analyzed over 1 million websites and 10 billion words across 15 OECD countries. This extensive analysis, which would have taken humans 65 years of continuous reading, helped identify the extent to which SMEs are adopting green practices and distinguish genuine efforts from mere greenwashing.

SMEs are increasingly engaging in environmental initiatives, with notable variations across countries and firm sizes. Strategies like adjusting production processes, recycling, and using renewable energy sources, especially solar, are gaining traction. For instance, about 15% of environmentally active SMEs mention solar energy on their websites. The data, derived from ISTARI.AI’s comprehensive web-scraped data analysis, also underscores the need for supportive policies. Advocates like Prama Bhardwaj, CEO of Mantis World, call for transparency in environmental impact reporting and fiscal incentives for SMEs transitioning to greener operations. Initiatives like Belgium’s Build Back Circular and the UK’s Together for our Planet campaign are examples of policy support encouraging SMEs in their green transition.


Read more about the OECD project here:

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