The International Trade Centre’s NDC 3.0 guide gives SMEs a checklist to lobby governments for dedicated climate financing and incentives, starting now
What’s happening: The International Trade Centre has released a five-step guide to integrate small and medium-sized enterprises into national climate plans under the Paris Agreement.
Why this matters: Early engagement in your government’s NDC 3.0 policy design process could protect your business from mandatory compliance costs whilst unlocking competitive advantages through funding and training programmes.
Small business owners worldwide have been handed a blueprint for the future, and those who act quickly stand to gain the most.
The International Trade Centre, the joint agency of the World Trade Organization and the United Nations, has released Aligning Small Business and Trade with Nationally Determined Contributions: A Guide for Policymakers and Stakeholders. This practical roadmap arrives ahead of the United Nations Climate Change Conference in Belém, Brazil, and offers small and medium-sized enterprises an unprecedented opportunity to shape climate policy whilst accessing vital support.
About 90% of businesses worldwide are SMEs. Despite their vulnerability to climate shocks and their contribution to emissions, they are rarely acknowledged in national climate plans. According to recent estimates from the European Commission, SMEs represent over 50% of all employment globally and are responsible for 64% of global business emissions.
Demanding Your Seat
ITC Executive Director Pamela Coke-Hamilton was direct in her assessment of what’s at stake.
“These NDCs 3.0 are the first big test of whether countries have taken the lessons of the Paris Agreement’s first Global Stocktake to heart,” Coke-Hamilton said. “If they are to succeed, they have to make a much stronger link between economic activity and environmental action. That means these climate plans must incorporate small businesses into their very design, as they are the drivers of the global economy.”
As countries submit their third round of Nationally Determined Contributions under the Paris Agreement, the timing presents a critical window. These NDCs represent official climate commitments that will shape government policy, funding allocation and regulatory frameworks for years to come.
The guide draws on global best practices to provide tools for early stakeholder engagement, coherent policy design and practical financing strategies. For SME owners, it represents validation that your business perspective matters at the highest levels of climate policymaking.
Finance and Incentives
The guide’s five-step framework reveals exactly what governments should be doing to support SMEs through the climate transition. Two steps stand out as particularly valuable for business owners seeking tangible benefits: dedicated financing mechanisms and regulatory support with incentives.
Step Two focuses on governance and financing, emphasising the need for clear coordination mechanisms and a diverse mix of public and private funding sources. This isn’t theoretical, it’s about ensuring money flows to SMEs who need it for green investments.
Step Four addresses implementation, backed by dedicated resources and measures to ease adoption. This includes regulatory support and incentives designed to make the transition financially viable for smaller businesses.
Australian SMEs are already experiencing increased pressure around climate-related reporting. Whilst small businesses currently face no legal requirement to measure or report their emissions, commercial relationships with larger organisations are creating practical pressure to gather this information, especially for those in high-emitting sectors such as energy, agriculture and transportation.
Research from the International Chamber of Commerce and Sage reveals a $789 billion green finance opportunity for SMEs globally. Whilst 73% of public and private financial institutions now offer green finance to SMEs, only 2.8% of SMEs have applied for it in the past three years. The barrier isn’t availability, it’s awareness and access. Moreover, SMEs with access to sustainable finance are 2.5 times more likely to implement significant sustainability initiatives. Yet 68% of SMEs say the cost of implementing sustainability initiatives is too high, and 67% cite time constraints.
The Five-Step Blueprint
The ITC guide provides a structured approach that SME owners can use to understand what their government should be implementing and where to apply pressure through business associations and industry groups.
Step One involves identifying strategic sectors where SMEs and trade can drive climate action, aligning national priorities with local economic realities. This is where your industry association should be actively engaged.
Step Three focuses on stakeholder mapping, ensuring inclusive engagement that brings SMEs and support organisations into the policy process. This is your entry point, contact your local Chamber of Commerce or industry group and ask what they’re doing to leverage this guide for participation in government stakeholder mapping.
Throughout Steps Two, Four and Five, the emphasis remains on ensuring SMEs aren’t just consulted but empowered to lead and innovate in the green transition. Capacity-building platforms and self-assessment tools help stakeholders clarify their roles and share best practices.
Continuous monitoring and evaluation mechanisms ensure strategies remain responsive and effective, allowing for stakeholder feedback and policy learning. This creates accountability loops that benefit businesses willing to engage early and consistently.
Acting Now Matters
The OECD Platform on Financing SMEs for Sustainability notes that addressing the climate crisis requires the net zero transition of millions of SMEs globally. Access to finance is essential for SME investments in net zero, but small businesses face considerable challenges in tapping into the growing pool of sustainable finance.
Digital tools are emerging to help SMEs overcome long-standing barriers by making sustainability reporting faster, cheaper and more reliable. Innovations include automated emissions calculators, pre-filled green loan applications that draw on real accounting data, shared SME data hubs supported by development banks and AI tools that can automatically complete sustainability templates.
For Australian businesses, sustainability has become a strategic necessity for long-term success, with improved sustainability leading to cost reductions, enhanced regulatory compliance and stronger brand recognition.
The guide emphasises the need to design NDCs and underlying trade-related policy measures in ways that minimise regulatory and economic costs by considering the specificities and challenges of small businesses. This is precisely why early engagement matters, policies designed with SME input from the start are more likely to be workable and beneficial.
By embedding SME and trade dimensions at each step of the NDC development process, countries can strengthen their climate commitments and accelerate a just transition, especially in developing economies where small firms are central to livelihoods, resilience and local innovation.
Business owners who wait for policies to be finalised before engaging will find themselves reacting to regulations rather than shaping them. Those who act now, by connecting with business associations and demanding participation in stakeholder mapping exercises, position themselves to influence policy design whilst accessing early support programmes.
The ITC guide isn’t just about climate action, it’s about ensuring small businesses aren’t left behind or unfairly burdened as larger organisations and governments move forward with climate commitments. It’s a tool for advocacy, a roadmap for accessing support and a blueprint for future-proofing your operation.
Start by contacting your local business association today and ask what they’re doing to participate in your government’s NDC 3.0 stakeholder engagement process. The businesses that engage now will secure competitive advantages whilst avoiding mandatory compliance costs later.
This guide is your blueprint for the future. If your business acts now to get involved in policy design, you secure a competitive edge and protect yourself from the costs of playing catch-up when regulations become mandatory.
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
