**1. Introduction**

To keep the rise in global average temperatures within certain limits, science implies that there is a finite budget of carbon dioxide that is allowed into the atmosphere, alongside other greenhouse gases [1]. It is for this reason that around 197 countries have agreed to limit global warming to below 2 ◦C and to make efforts to limit global warming to 1.5 ◦C under the Paris Agreement. They include China, the countries of the European Union and the United States, the world's three largest greenhouse gas emitters [1]. Meeting the 1.5 ◦C goal with a fifty per cent probability translates into a remaining carbon budget of 400–800 GtCO2. Staying within this carbon budget requires CO2 emissions to peak before 2030 and fall to net zero by around 2050 [1,2].

Beyond this, any further carbon release must be balanced by removal into sinks [3]. This is because of the monotonic, positive and near-linear relationship between cumulative net anthropogenic CO2 emissions and CO2-induced surface warming [1,4]. The consequence of this result is that CO2-induced warming halts when net anthropogenic CO2 emissions halt (i.e., CO2 emissions reach net zero) [5]. Thus, to turn net zero into a useful frame of reference for various decision makers, the global carbon constraint needs to be translated into individual decarbonisation pathways for nations.

The term "net zero" (or 'carbon neutrality') is used to refer to a state where, in broad terms, the level of CO2 and equivalent emissions released into the atmosphere is balanced by that being removed or securely stored. In other words, net zero refers to achieving a balance between the amount of greenhouse gas emissions produced and the amount

**Citation:** Olarewaju, T.; Dani, S.; Jabbar, A. A Comprehensive Model for Developing SME Net Zero Capability Incorporating Grey Literature. *Sustainability* **2023**, *15*, 4459. https://doi.org/10.3390/ su15054459

Academic Editor: Grigorios L. Kyriakopoulos

Received: 29 January 2023 Revised: 20 February 2023 Accepted: 26 February 2023 Published: 2 March 2023

**Copyright:** © 2023 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

<sup>1</sup> Keele Business School, Keele University, Keele, Newcastle-under-Lyme ST5 5BG, UK

removed from the atmosphere [6,7]. The UK definition of a small to medium enterprise (SME) is generally any organisation that has fewer than 250 employees and a turnover of less than €50 million or a balance sheet total of less than €43 million [8].

The UK aims to decarbonise all sectors of its economy and reduce CO2 emissions to net zero by 2050 [9,10]. Achieving net zero by 2050 will require a transformation of business across the UK. To this end, SMEs must play a vital role in sustainability because of their significance to the UK economy. Accounting for 99 per cent of all UK businesses, SMEs are crucial to whether the UK meets this 2050 net zero target. SMEs are the bloodline of the UK economy, generating 52 per cent of annual UK GDP [8]. SMEs also account for three-fifths of employment and half of the total turnover of the UK's private sector.

SMEs collectively account for around half (43–53%) of greenhouse gas emissions by UK businesses [10]. When households and the public sector are added to the mix, SMEs account for around a third (29–36%) of total UK emissions [10]. The most greenhouse gas (GHG)-intensive industries in the UK are energy supply, agriculture, water supply, mining, transport, and manufacturing (ONS,2019). Greenhouse gases are gases in the earth's atmosphere that trap heat in the atmosphere. The seven direct greenhouse gases under the Kyoto Protocol include; (1) Carbon dioxide (CO2), (2) Methane (CH4), (3) Nitrous oxide (N2O), (4) Hydrofluorocarbons (HFCs), (5) Perfluorocarbons (PFCs), (6) Sulphur hexafluoride (SF6), and (7) Nitrogen trifluoride (NF3), [9]. CO2 (the biggest contributor to climate change) accounts for about 79% of all U.S. greenhouse emissions, Methane accounts for 11%, Nitrous Oxide accounts for 7%, and Fluorinated Gases account for 3% [11].

SMEs have a huge task and opportunity to help the UK meet its net zero 2050 target and understanding how their current activities contribute to carbon emissions and what needs to be done to meet the net zero target is vital if the UK is to achieve net zero by 2050. The UK is a principal actor in the net zero discussion because the industrial revolution started in the UK and soon spread to the rest of the world, including the United States [12]. As industrialisation spread, CO2 emissions naturally increased [13]. In this regard, it is not possible to ignore the aggregate impact of SMEs on CO2 emissions. SMEs can not only reduce their emissions; they can also have an important indirect influence on the climate agenda through their influence on other actors, including suppliers, customers, and other organisations [14].

In this article, we contribute to the extant literature by providing a comprehensive conceptual framework for SMEs to draw from in their net zero transitions. We do this by synthesizing commonalities across SME operations primarily in the UK, but also often drawing from other relevant contexts and kneading together the academic literature and non-academic perspectives from the grey literature. The research objectives for this paper are given below:


Our motivation for this paper is to bring the grey literature into the academic literature on SME net zero activities. Grey literature can broaden the scope of literary analysis to include more recent and relevant studies, thereby providing a more complete assessment of available evidence [15–17]. Grey literature is a field in library and information science that deals with the production, distribution, and access to multiple document types produced on all levels of government, academics, business, and organization in electronic and print formats not controlled by commercial publishing i.e., where publishing is not the primary activity of the producing body [18,19].

Grey literature is produced at all levels of academia, business, government, and industry in print and electronic formats not controlled by commercial publishers [20]. Grey literature can include academic papers, conference papers and abstracts, discussion papers, government reports, committee reports, newsletters, conference proceedings, program evaluation reports, standards/best practice documents, technical specifications and standards, and working papers [21]. Grey literature is troublesome to search and locate because there are no central sources, such as libraries or databases, where it is collected or housed. It thus requires considerable time and effort to locate [15–17].

Despite the difficulty in locating grey literature, purely empirical research-based reviews and papers have been criticized for their inability to provide meaningful conclusions about complex interventions and a national or regional context for differences in implementation [20,22]. It is for this reason that reviewing grey literate is preferred in the case of complexity in intervention and outcomes as is the case concerning SMEs and their net zero activities. Often, variations in outcomes cannot be explained by only reviewing empirical academic research-based studies because the actual mechanisms occurring within the intervention and useful ideas about the implementation of interventions are habitually not described [22,23]. In addition, there could be a lack of consensus, low volume and quality of evidence, complex outcomes and interventions, and important contexts for implementing interventions [20]. Such factors may be critical to support policy and program decisions regarding how SMEs can help to achieve net zero [22,24].

This paper is unique because it proposes an implementation framework for SMEs to implement their net zero strategies based on the academic and grey literature. Since this domain is not well researched within academia, this study develops an understanding of the multi-criteria relationships for SME decision making when implementing net zero activities. The rest of the paper proceeds as follows: we review the extant academic literature and then explain our materials and methods before discussing key themes that highlight the barriers and drivers for SMEs who wish to engage with the net zero agenda. We then build and explain our framework based on the academic and grey literature and then conclude.

#### **2. Literature Review**

The extant literature suggests that SMEs play a crucial and pivotal role in the reduction of carbon emissions and in addressing climate change [6,25–27]. For example, research argues that because SMEs account for 13% of global energy usage, there is a need for SMEs to take a proactive approach to contribute to reducing global carbon emissions [28].

However, many SMEs are still dominated by a very narrow world view which is primarily framed around economic growth as opposed to the contribution of their economic activities to climate change and global carbon emissions [2,26,29]. Within this context, the achievement of net zero capabilities is also being applied in a community where critical values around environmental protection are personal [6,28,30,31]. This makes the process challenging as the focus now shifts to SME behaviours and characteristics alongside external influences [32,33]. It follows that SMEs can generate net zero capability by implementing a range of strategies that reduce greenhouse gas (GHG) emissions and contribute to sustainable development. We conduct a thematic review of some examples of these strategies next.

#### *2.1. Measuring and Managing Carbon Emissions*

One element which can be used by SMEs to answer the economic problem and to change their views on the climate issue is proper measuring and managing of carbon emissions to ensure that adequate importance is given to reducing emissions. Firstly, the measuring of carbon emissions helps SMEs realise what their GHG footprint is. This does, however, come with its challenges as active monitoring will be required so that SMEs can balance between carbon emissions and the amount they offset [29]. Thus, the key aspect at this point is SMEs need to undertake an audit of their current climate footprint which will act as a benchmark for the carbon offset. Any such benchmark must take into account all emissions associated with traditional business operations including energy consumption, transportation, and waste [28].

Secondly, the process of change is not without its challenges and in the context of climate change and global footprints, many SMEs might need to go through a process of digital transformation [34,35]. This process of transformation includes adopting new technologies and systems that enable better tracking and reporting. In developing a process of measurement and management, SMEs can also measure their GHG emissions using tools such as the GHG Protocol, and then set targets for reducing them. After GHG emissions have been measured, they can then be managed using insights gained during the measurement phase. Overall, SMEs can benefit from cost savings, increased competitiveness, and improved reputation by measuring and managing their carbon emissions [2].

#### *2.2. Adopting Renewable Energy Sources*

SMEs can reduce their carbon footprint by using renewable energy sources such as solar, wind, or hydropower. To reduce their global GHG footprint, there is also an onus on SMEs to adopt renewable energy sources because SMEs account for 13% of global energy usage [28]. Technologies which can harness solar, wind and geothermal power offer significant advantages in reducing GHG footprints compared to traditional fossil fuels [36–38]. This reduction in footprint can also lead to other benefits; for example, the installation of solar panels or wind turbines on roofs or premises can act as a catalyst to generate electricity cleanly and efficiently, lowering operating costs and reducing reliance on grid power [6,33,39].

This approach towards renewable energy can also act as a marketing platform and can focus on environmentally conscious customers. While the benefits of adopting a net zero strategy are many, there are still considerable challenges which organisations need to consider when employing renewable energy, mainly upfront costs. These upfront costs may be a challenge for some SMEs. Investigating financial possibilities, such as grants and loans, that assist the development of renewable energy sources is one way to surmount this problem [30,40]. Joining community solar programmes or renewable energy cooperatives, which offer access to renewable energy sources without the need for substantial capital commitments, is a more creative solution to this problem for SMEs [6,41]. Renewable energy is becoming increasingly cost competitive and can provide a stable source of energy for SMEs [26,33,42].

#### *2.3. Improving Energy Efficiency*

SMEs can also reduce their energy consumption and emissions by improving the energy efficiency of their buildings and equipment. This can include measures such as upgrading insulation, installing energy-efficient lighting and appliances, and optimizing heating and cooling systems [2]. Research also suggests that there are many ways for SMEs to improve efficiency to minimise carbon footprints [28,33]. For many SMEs, the focus on improving energy efficiency is a key business strategy with targets set by the central government [31,43]. With minimal up-front costs, the implementation of such a strategy is a low-risk approach to a fundamental problem [44]. The benefits of such an approach allow SMEs to decrease their energy usage, operational expenses, and carbon footprint without having the huge upfront costs of installing renewable technology.

SMEs can improve their energy efficiency through a variety of mechanisms and methods. One example is conducting an energy audit, which is useful for identifying areas of waste and expense. This may entail locating inefficient lighting systems, obsolete heating and cooling systems, and other energy-intensive equipment [45]. The other approach is more holistic and companywide, involving education and support for all stakeholders. This requires educating people about energy-saving practises and changing their behaviour to improve efficiency. Simple actions such as turning off lights and appliances when not in use and encouraging employees to take public transportation, ride their bikes, or carpool can help reduce energy consumption and carbon emissions [46].

#### *2.4. Implementing Circular Economy Principles*

Another popular approach to reducing waste and maximising efficiency is the utilisation of circular economy approaches and strategies [47]. The principles of the circular economy provide a framework for long-term economic development by reducing waste and optimising resource utilization. SMEs are critical players in the global economy, but due to limited resources and knowledge, they frequently face unique challenges in adopting circular economy principles. Thus, a cheap and efficient approach to reducing environmental impact and achieving net zero capability is useful [44].

These principles, from an organisational perspective, also provide significant benefits to SMEs, including the reduction of material and production costs while promoting resource efficiency and sustainability by implementing closed-loop supply chains and designing products for circularity [37]. This is, in the view of the researchers, a critical approach to embracing sharing and collaborative consumption models; SMEs can reduce capital expenditures while also encouraging social responsibility and community engagement [48]. Overall, SMEs can adopt circular economy principles, such as reducing waste and reusing materials, to minimize their environmental impact.
