Abstract
Competing apparently incompatible objectives can create conflicts for small business leaders contemplating environmental sustainability. Prior research has advanced simple win-win or trade-off responses. Adopting a paradox lens and tensions framework, this article examines the narrative accounts of British small business owners navigating the transition towards environmental sustainability. We identified three tensions related to the adoption of net zero practices in small businesses: from competing business goals, from a perceived unfair burden, and from potential accusations of greenwashing. An examination of policy documents at the national, regional and local levels found delegated responsibility and an excessively optimistic prevailing policy discourse. We conclude that, paralysed by the paradoxical tensions and complexity of the situation and given a policy discourse which largely overlooks their concerns, leaders can become stuck in a cycle of inaction or minimal action. Encouraging leaders to embrace paradox and tensions may be an uncomfortable but ultimately more fruitful approach.
Introduction
Although small and medium-sized enterprises (SMEs) play a significant role in economic activity and environmental impact across the globe, their engagement with climate action remains limited. Policy interventions and prevailing business practices have, to date, not succeeded in driving widespread decarbonisation among smaller firms. This article contributes to scholarly debates on this topic by examining SME climate action in the United Kingdom. In 2019, based on the recommendations of the UK’s Committee on Climate Change, the UK Government and the devolved administrations set the goal of achieving net zero by 2050. This decision affects all firms in the UK; more than 5.9 million of such are SMEs employing 16.8 million people and generating a projected £2.3 trillion in annual revenue (Department for Business, Energy and Industrial Strategy (BEIS), 2020); 99% of these firms fall into the ‘small’ category with fewer than 49 employees and only around 0.7% fall into the ‘medium’ category (Department for Business and Trade, 2025). This means that the SME literature has a strong focus on small businesses; we therefore, draw on the SME literature to develop the background to, and framing of, our study into small businesses.
Although the environmental footprints of specific enterprises may appear tiny, the combined environmental impact of SMEs is significant. Previous research has explored how small enterprises could reduce their environmental emissions from three perspectives: structural, cultural, and agential. The structural aspects include stakeholder influences and supply chain stresses (Mani et al., 2020: Sharma and Henriques, 2005). Cultural aspects include the attitudes, cultural awareness, and social learning of managers (Florea et al., 2013; Wood and Bandura, 1989) and in addition, business practices in terms of capability highlight the firm’s capacity to create sustainable practices and innovation (Klewitz and Hansen, 2014; Sharma, 2000). Agency is embodied by manager self-motivation (Bedford et al., 2025; Dey et al., 2022; Maassen and Urbano, 2024). Nonetheless, some evidence suggests an ‘attitude to action gap’ based on cost constraints, and information and skill requirements (Ri and Mole, 2022). Thus, while SMEs have the potential to significantly contribute to the UK’s net zero goal, overcoming barriers such as cost, information, and skill gaps is essential to bridge the gap between their environmental attitudes and actions, a challenge further complicated by the competing goals these businesses must navigate.
We explore the ‘attitude to action’ gap in SMEs by analysing the narrated experiences of business leaders regarding the net zero agenda, generated by in-depth interviews. Our aim is to reveal and illustrate the tensions SME leaders experience in the face of competing business, societal and environmental goals and thus, to understand what kinds of support may help them to be more confident, willing and able to adopt net zero initiatives. Given that SMEs are jointly responsible for an estimated 43 to 55% of UK business greenhouse gas emissions, and around a third of total UK emissions (British Business Bank, 2021), this has the potential to have a significant impact on UK government net zero targets. Alongside this, we analyse publications from three different government levels to give insight into the regulatory context within which the participant firms operate. Prior approaches to the study of net zero in an SME context have predominantly focused on barriers and enablers. While this approach provides a structured frame within which to consider the environmental impacts of SMEs, it tends to ignore the complexities surrounding their decision-making processes which are typically less formal, and strongly influenced by personal, professional and organisational values than those in larger organisations (Blundel and Hampton, 2021). Additionally, the overriding focus on win-win and trade-off approaches ignores the tensions that conflicting business and net zero goals provoke in SME leaders.
Our theoretical contribution lies in extending the SME net zero literature by moving beyond the dominant barriers and enablers framing. We draw on paradox theory, which has hitherto not been applied in this context, to deliver a more nuanced understanding of SMEs and net zero that acknowledges the complexities of their decision-making. Empirically, we contribute by identifying the tensions SMEs face in their net zero journey which help to elucidate why they may exhibit episodic or non-linear progress towards net zero goals that the barriers and enablers approach cannot fully explain. We suggest that the single attitude or intention is composed of three interconnected tensions revealing emotional responses to net zero. First, a tension between sustainability goals and business goals. Second, a tension between the effort and cost required, presented as an unfair burden for small firms. Third, a tension between wishing to engage in net zero but wishing to avoid accusations of greenwashing. We contend that, immobilised by the tensions and complexity of the issue, leaders can become trapped in a cycle of inaction or minimal action. Acknowledging the complexity and interrelatedness of tensions means a tacit acceptance that they may never be fully resolved, and this implies a fundamentally different mindset in business leaders. We argue that current policy is fragmented and inconsistent with regard to SMEs, exacerbating, rather than helping to resolve, the complexity. In addition, our exploration of the prevailing policy discourse surrounding SME climate action finds that it tends to be overtly pro-growth and optimistic – what might be described as Panglossian (Howlett, 2022). The Panglossian view may reflect an attempt to retain a broad coalition in favour of climate change policies (Blyth, 2002), with SMEs being part of a ‘new green economy’; yet, the costs associated with climate action are frequently invisible. Nonetheless, recent polling in the UK shows that the level of costs associated with net zero are often overestimated; this has a significant impact to reduce support for net zero. 1 Although our empirical focus is on British SMEs, many other countries face similar challenges in establishing and implementing net zero policy in a small business context, which suggests that this study has international relevance.
The article proceeds with a review of literature focused on sustainability and competing goals in SMEs and small businesses, and scholarship focused on tensions and on the implications of a paradox approach to tension management. We then outline our research methodology, present findings and discuss their implications.
Theoretical background
Sustainability in SMEs and small businesses
Recent research points to the growing importance of sustainability-oriented strategies for small businesses from three viewpoints: structural, cultural, and agential. The advantages of sustainability practices in terms of stakeholder obligations or resource access are highlighted by structural issues, which also emphasise pressures from the supply chain and may enable greater access to resources (Mani et al., 2020; Sharma and Henriques, 2005). Small family businesses moderately satisfied with their performance adopted more eco-innovation (Duong et al., 2025); although Momtaz and Parra (2025) posit a Corporate Social Responsibility (CSR)-as-insurance theory to argue small firms with high performance variability benefit more from sustainability orientation. Research evidence confirms the positive influence of government support on sustainability (Rodríguez-Espíndola et al., 2022; Tyler et al., 2024). External validation matters, with evidence from French SMEs noting the importance of external certification (Momtaz and Parra, 2025). External cooperation with national/EU agents boosts environmental innovation (Figueiredo et al., 2024); however, some evidence suggests ‘greenwashing’ especially, but not only, by large firms (Siebold et al., 2025). In terms of stakeholder engagement, net zero practices can help fulfil stakeholder obligations (Sharma and Henriques, 2005), but this is enhanced if the business anticipates adoption will bring commercial benefits (Courrent and Omri, 2022). These structural influences emphasise pressures from the supply chain, and from stakeholders.
In terms of culture, we accept the Kantian distinction between the interests represented in structural aspects versus norms representing cultural aspects. In this example, the cultural aspects reflect knowledge; in particular, the usefulness of information and knowledge capabilities (Mole and Ri, 2023; Shih, 2024). Green knowledge management (GKM) strengthens green innovation and performance (Abbas and Khan, 2023). In contrast, other frameworks stress the internal aspects of the firm and argue that small businesses need capabilities to develop sustainable practices (Shevchenko et al., 2016); by so doing, they can generate greater innovation (Klewitz and Hansen, 2014; Sharma, 2000), create better long-term resilience (Ortiz-de-Mandojana and Bansal, 2016), and collaborate with other firms to their mutual advantage (Glavas and Mish, 2015). Furthermore, at the agency level, the adoption of sustainable business practices might depend not only on the cultural understanding, but also the values of managers (Florea et al., 2013) and their self-motivation (Dey et al., 2022). Organisation readiness matters, prioritising environmental impact makes a business ~30% more likely to take active net zero steps (Mole and Ri, 2023; Tyler et al., 2024); however, research suggests that sustainability strategies require culture and leadership changes (Chowdhury et al., 2022; Martínez-Peláez et al., 2023). Nonetheless, small firm managers and their decision-making under uncertainty warrant deeper investigation. Thus, organisational preparedness, cultural competencies (such as GKM), and structural enablers (such as supply chain pressures and government support) have all been extensively studied. Most current research views net zero adoption as a response to external influences or skill development rather than exploring how the human values and internal motives of small business managers in the context of developing their businesses influence these decisions. It is necessary to understand these motivations to create interventions that engage decision-makers and encourage real sustainable engagement.
Competing goals in SMEs
In an increasingly complex and ambiguous world, business leaders are faced with ever more intricate problems which can create seemingly intractable conflicts. Needing to deliver on social, economic and environmental goals, that is, managing conflicting goals, is a significant challenge for firm leaders (Högberg and Mitchell, 2023; Suter et al., 2023). Approaches to this kind of complexity have traditionally under-estimated divergent, apparently incompatible, goals in the search for reductive solutions (Lavine, 2014). Three approaches in the literature respond to these competing demands. First, prior research has sought to find solutions that allow businesses to achieve win-win outcomes by searching for alignment in divergent goals, such that progress towards one means progress towards others, or at least does not diminish such progres. This has been characterised as an ‘enlightened self-interest’ position in the context of CSR goals, where firms engage in sustainability practices in the belief that they both ‘do the right thing’, and deliver against their economic goals (Bedford et al., 2025). While some studies have found a positive link between sustainability and economic goals, critics argue that this approach prioritises economic business goals because ‘environmental and social issues are only taken into account to the degree that they contribute to an enhanced corporate economic performance’ (Hahn et al., 2010: 218). The win-win approach is, they argue, essentially founded on the assumption that the divergent goals can be mutually reinforcing and it thus, limits the scope of potential for sustainability goals since they are judged via the lens of economic contribution (Hahn et al., 2010). As such, win-win fails to address the evident tensions between divergent objectives, leaving them unresolved (Van der Byl and Slawinski, 2015).
This critique has driven a second approach in the literature to the consideration of divergent goals – the trade-off approach. Rather than assuming that simultaneous goals can all be achieved, this perspective advocates a compromise whereby a sacrifice in one area is accepted to deliver a benefit in another (Byggeth and Hochschorner, 2006). One evident benefit of this approach in the context of sustainability goals is that, unlike the win-win approach, it does not limit the scope for sustainability as, for example, a relatively modest reduction in economic performance may permit substantial progress towards a sustainability goal. Trade-offs can occur at various levels from the individual (e.g. driven by business leader values) through the organisation and industry levels, to the societal level (Riandita et al., 2022). Proponents argue that this approach permits consideration of more effective sustainability practices (Hahn et al., 2010) whereas, critics suggest that despite the different perspective, this approach is still likely to lead to the prioritisation of economic goals (Van der Byl and Slawinski, 2015). Hence, a third perspective adopted in the literature is the integrative approach. Whereas the win-win mindset drives focus on areas where sustainability and economic goals may align, and the trade-off approach is founded on the principle of making a choice between them, the integrative lens brings the divergent goals together, assigning equal importance to them, thus ‘counterbalancing the heavy focus on economics with an approach that places more weight on environment and social consideration’ (Van der Byl and Slawinski, 2015: 59). While each of these approaches (win-win, trade-off, and integrative) offers valuable insights into managing divergent goals, they often fall short in addressing the inherent tensions that arise when organisations attempt to balance competing priorities. This gap paves the way for a more nuanced understanding through paradox theory, which embraces these tensions as a dynamic and integral part of organisational decision-making.
A paradox perspective to the resolution of tensions
Paradox theory ‘shifts the fundamental assumption in management from rational, logical and linear approaches to those that are surprising, counterintuitive and tense’ (van Helvert-Beugels et al., 2020). Unlike the ambidexterity perspective, which often simplifies tensions into binary choices and seeks resolution through win-win or trade-off strategies, paradox theory acknowledges the interrelatedness and contradictions of organisational priorities. This perspective is particularly valuable in sustainability research, where the interconnectedness of organisations, society, and the natural environment makes it difficult to isolate and resolve tensions in a linear manner (Van der Byl and Slawinski, 2015). Moreover, this theory aligns with a broader management approach recognising the inherent messiness of real-world organisational dynamics, where tensions are not easily resolved but must be continuously managed and explored. However, while paradox theory offers a holistic approach, its application can be challenging, requiring managers to navigate ongoing tensions without clear resolution, which may lead to complexity in decision-making. As such, further empirical research is needed to explore how this theory can be effectively operationalised in various organisational contexts. Within paradox theory, Putnam et al. (2016) argue that scholars must examine the role of emotion in tensions and move away from the rational. Tensions arise when organisational actors face incompatibilities and difficulties, which are characterised as stress, anxiety, or discomfort in making decisions and moving forward in organisational contexts (Fairhurst and Putnam, 2014), even though academics typically address paradoxes rationally (Costanzo and Di Domenico, 2015), while downplaying emotion (Putnam et al., 2016). A constant oscillation between poles heightens feelings of rage and frustration, especially when multiple tensions amplify and attenuate one another (Nicotera and Clinkscales, 2010) while suppressing emotions in contradictory circumstances leads to stress and burnout (Jenkins and Conley, 2007). For a review of literature on the implications of stress for entrepreneurs, see Stephan (2018). Accordingly in paradox theory, conflicting acts can lead to emotional ambivalence and distress (Liu et al., 2021; Putnam et al., 2016). Rothman et al. (2017) declare emotional ambivalence to be the presence of contradictory feelings concerning a specific thing, event, idea, or person. People may have difficulty balancing opposing aims, expectations, commitments, and constituencies (Methot and LePine, 2016; Rothman et al., 2017); competing attitudes, beliefs, and behaviours are the root causes of ambivalence (Ashforth et al., 2014). For example, women in high-status positions may experience emotional ambivalence, due to pressure to comply to gender stereotypes (Fong and Tiedens, 2002). Consequently, paradox theory asserts that difficulties in balancing competing demands have emotional impacts, in particular anxiety (Liu et al., 2021), which resonates with our focus on the ways in which small business leaders seek to balance business and environmental goals.
Data and methods
In line with our aim and our theoretical lens, we adopted a qualitative research design and methodology, since we seek to deliver deep insights into business leader experiences of, and attitudes towards, net zero and to understand ‘why’ rather than ‘what’ questions. The study comprised two phases. In the first, semi-structured interviews were conducted with 15 small business leaders, both male and female, in a range of industry sectors, with the aim of eliciting their accounts of their experiences of the net zero agenda. All participants were recruited with the help of WENTA, a business support organisation based in Hertfordshire, an English county north of London. Details of all participants are given in Table 1. Non-probability purposive sampling was used to identify and approach the participants who had previously taken part in a survey on net zero and given their permission to be re-contacted for further research. This sampling strategy enabled us to access SME leaders from a range of business sectors all of whom were located within a specific geographical area, and who would therefore have experienced a common regulatory approach to net zero. Participant details were obtained from WENTA, and they were recruited by the research team directly via email. Full details about the study were provided on a Participant Information leaflet. All interviews were carried out by telephone or via Microsoft Teams. Both authors conducted interviews, and all were recorded with the consent of participants, and fully transcribed. Approval from the Human Research Ethics Committee of the university where the authors are based was obtained before commencing the empirical research.
Overview of data sources.
BEIS: Department for Business, Energy and Industrial Strategy; CCSP: Climate Change and Sustainability Partnership; LEP: Local Enterprise Partnership.
The interviews took a conversational style and were based on a discussion guide established in advance of the data collection (see Appendix 1). Interviews were conducted during spring and summer 2024 and typically lasted around 30 minutes. Participants were encouraged to talk freely about their experiences of, and attitudes towards, net zero. Researcher subjectivity is a potential source of bias in qualitative research such as this, where separating the researchers entirely from the subject is not an option. To minimise this risk, interviews were carried out by both authors, which allowed for reflexive comparison on their perspectives and interpretations. We discussed the emergent themes throughout to ensure that our interpretations were grounded in data. We also used a common discussion guide and behaved in a neutral way during the interviews to avoid leading the participants. In this way, we aimed to continually question our assumptions, to be as consistent as possible throughout the interviews, and to ensure the trustworthiness of the findings. We adopted an abductive approach to qualitative data analysis, which involved several steps through which we sought to make sense of the data and generate plausible explanations (Sætre and Van de Ven, 2021). All data analysis was carried out using the NVivo 14 qualitative data analysis software package. The first round of analysis involved attaching codes to everything that appeared to be of interest, using the language of the participants through in-vivo coding (Corbin and Strauss, 2008). This informant-centred approach avoided imposing preordained understandings onto the participant narratives, to bring out their own voices, and to ensure rigour in the data analysis process. In this first round of data coding, 120 codes were identified. The second stage involved grouping similar codes. Here again, and throughout, regular meetings between the co-authors ensured that both participated in the identification of themes. Finally, the groups of codes were further aggregated into three overarching themes, which we conceptualise as three key tensions experienced by SME leaders as they contemplate net zero. In data analysis, we paid attention to the narrative patterns in the participant accounts, and on how the emerging plot structure provided a coherent way of understanding how participants made sense of their experiences of the net zero agenda (Kvale, 2006; Kvale and Brinkmann, 2009). The data structure including first- and second-order themes is summarised in Table 2.
Data structure illustrating the progression from participant narratives to aggregate theoretical dimensions.
Following the depth interviews, in a second phase of research, we undertook analysis of policy documents related to the net zero agenda, to shed light on the regulatory context within which the participant firms are operating. Research documents are important artefacts in bureaucracy (Hull, 2012; Weber, 2019) as they reflect policy. Moreover, when research focuses on a single programme only a handful of documents need to be reviewed (Dalglish et al., 2020) as the documents are a collective expression of the organisation’s policies; as such, these need to be aligned rather than dispersed.
We analysed official documents from regulatory bodies at three UK administrative levels which may have a direct or indirect impact on these firms. Our aim was to identify the discourses linked to net zero present at each level. As our SME research participants are all based in a specific region of England (Stevenage, in Hertfordshire) we selected documents published at the local level, by Stevenage Borough Council, at the regional level, by Hertfordshire County Council and at the national level, by the UK Government’s department for Business, Energy and Industrial Strategy (BEIS). The documents were chosen because they all offered a current strategic perspective on climate change or net zero, presenting plans for the delivery of climate-related emissions targets. The focus on key documents is key to this type of analysis; for example, Tuckerman et al. (2023) examined two innovation-related publications (the UK government’s Industrial Strategy from 2017 and the subsequent Innovation Strategy from 2021) as they acted as standards for the UK’s innovation-promoting ecosystems. As a result, they have a big influence on the UK’s innovation discourse as well as the creation and implementation of departmental policies. Tuckerman et al. (2023) chose articles to address how mainstream innovation policy incorporates sustainable innovation. Our situation is very similar for the context of sustainability in Hertfordshire. We were particularly interested to explore the strategic perspectives of different government levels to establish how aligned or divergent they were and the extent to which each focused on SMEs. Thus, we sought to explore the messages linked to net zero that SME leaders in Stevenage may have received from these three different levels of government.
We explored how regulatory authorities at these different levels talk about net zero and what this might mean for SMEs and related understanding. Policy perspectives reflect the prevailing ideas around climate change; Blyth (2002) argues that such ideas shape economic change suggesting they reduce the inherent uncertainty surrounding complex phenomena and in turn, influence interests and can become coalition-building devices. Policy perspectives may frame SMEs and climate change in such a way as to build the coalition; similarly, Perren and Sapsed (2013) suggested policymaker language frames ideologies that influences the business environment. For example, the concept of shareholder value notably influenced firm behaviour (Thompson and Harley, 2012). Specifically, we were interested in the commentary around the role of policy towards the involvement of small firms at different levels of government. Without making any claim about causality, messages from SME managers may reflect similar messages from policymakers.
The process of developing policy documents includes debate and feedback within the organisation to ensure they reflect prevalent thinking, these documents influence the discourse to shape policy design and implementation (Tuckerman et al., 2023); consequently, a close reading can provide insight into the prevailing government discourse on the topic. Regarding analysese of qualitative methods, Perren and Sapsed (2013) coded data to generate categories and themes, Tuckerman et al. (2023) extracted keywords using linguistic tools. Others have used different discourse analyses (Hook, 2001). Because we were interested in the references to small firms, in policy documents where small firms were not necessarily central concerns, we open-coded references to businesses in general, and to SMEs and small firms in particular, in these reports, using NVivo. This enabled us to identify the language used and the connections to climate change issues. Since these documents offered a broad focus on the delivery of net zero targets that extended beyond business, we also paid attention to other (non-business) areas, to give us insight into the main priority areas at each government level. We analysed four documents, from three regulatory levels (see Table 2). Given the processes and debate involved in their development; it is feasible to analyse relatively few documents so for example, Tuckerman et al. (2023) studied two key policy documents: the industrial strategy (2017) and the innovation strategy (2021) to argue for the privileging of the economic growth discourse in innovation policy whilst Tessaro (2022) examined three documents in Education Queensland’s 2010 Strategy.
Findings
Tensions experienced by small business leaders in the transition to net zero
We identified three tensions in our small business leader participant talk about their experiences of engaging with the net zero agenda, all of which produced emotive responses. The first was between individual ambitions to be sustainable and the more prosaic, everyday goals of the business – this often provoked frustration. Second, participants articulated a tension between the effort required for their business to be sustainable and the impact that they believed these efforts can have. Here, they often drew comparisons with larger businesses with their accounts suggesting a strong sense of perceived imbalance between small and large firm responsibilities; this typically provoked resentment. Third, in the face of a wide range of sustainability initiatives, there was a tension between being ‘genuinely green’ and being seen to be ‘greenwashing’ whereby firms wished to engage in green practices, but also to avoid charges of greenwashing. This tension seemed to be linked to lack of clarity around the concept of net zero provoking anxiety in many participants.
Individual sustainability goals versus business goals: Wanting to be sustainable but business goals getting in the way
Reflecting prior evidence from a random sample of small business leaders (Ri and Mole, 2022), participants often began by voicing a strong personal commitment to sustainability. For some, this was a simple assertion that sustainability is very important or that they were big on sustainability. Often, they presented this as driven by their values or moral stance, and so they spoke of sustainability being morally the right thing to do or of feeling a strong conviction that deep down we’ve got to do something about it.
. . . sustainability is very important and there are certainly many things that we can do (WR2006)
I’m quite big on sustainability anyway, so yeah, I’ve worked quite closely with a lot of sustainability teams on big construction projects in terms of how can we make this more sustainable? . . . I think it morally it’s the right thing to do [. . .] I would like to think that I’m working for a business that’s improving society not at detriment to society. (WR2012)
I love the idea of doing what we can because we need to. I’m very aware that we need to [. . .] I know. You know you can, you can see from the windscreen of the car that you’re not getting the bugs on there. So, you know, the world is changing and something’s gotta happen. (WR2005)
Driven by feelings of responsibility for the environmental impacts of business, they expressed the desire to save the planet or to stop climate change. Narratives of hope were often deployed as they spoke of, for example, mitigating the. . .terrible trajectory we’re on and ensuring a better future for everybody.
And you know, we drive electric cars, everything about us is trying to live sustainably. I’m vegan. So, so. . . I think as a company I don’t think it’s responsible for people to just pass the buck and say, well, someone else’s net zero and therefore we are. [. . .] As a company we’re value driven. To save the planet (WR2014)
It is the personal motivation, but it’s driven by what’s needed. Frankly, you know, our planet is currently doomed unless we make massive changes and globally shift our mindsets. And that means changing the way we do business. It means changing the way we live. It means, you know, it all sorts of changes. If we’ve got any hope of mitigating the, you know, the terrible trajectory we’re on. (WR2015)
[I want] to stop climate change and to make better choices and to help be part of the process over the next few years of us all cutting back or making different choices for a better future for everybody. (WR2008)
These accounts demonstrate not only deeply held attitudes about the need to be sustainable but a conviction that acting at the firm level was vitally important, and acting today will have future impacts. However, participants also frequently reflected on competing business demands they characterised as constraining efforts to be sustainable. Here, narratives of conflict emerged with references to a lack of time to engage with their sustainability goals as they were required to attend to competing and more pressing business needs. So, they have got absolutely no time in the world because literally there’s so many other things I need to do. Participants found the pressure of these competing goals emotionally challenging – even overwhelming.
It’s the time constraint, but there is. . .. so it’s yeah, it’s not like I’ve made a decision to or I’m not going to pursue that anymore. . . It’s literally there’s so many other things I need to do. (WR2012)
So I’m . . . it’s just a time element. We just don’t have the time. Well, really focus . . . Small business owners have got absolutely no time in the world [. . .] Amending the last-minute tweaks on a product and everything that goes with it has taken priority, (WR2014)
It is really quite overwhelming to me because you know, you’re distracted. There’s phone calls and client calls and you know the business, life’s got to go on and you are trying to do what you can do. . . (WR2005)
As a consequence, sustainability goals were deprioritised. While they may find this really difficult it is clearly something that they felt was necessary for the survival of the business.
Yeah, it’s difficult. It’s really difficult [. . .] engaging with that [net zero] programme is not something that’s a priority for me at the moment. [. . .] Not because of my support for the subject, but in terms of my where I need to prioritise time in terms of getting the business off the ground. It’s, it gets lowered down on you know, it’s what it’s the thing that often gets knocked off the list [. . .] very limited budget, very limited time and you know brain saturation. (WR2015)
As well as time pressures, participants also pointed to the financial challenges of adopting a sustainable approach because of the costs of doing so, which may make their products or services uncompetitive. Here again, business survival goals competed with sustainability.
So basically you would say, well dear client, you can have this eco lovely saves the ocean and it’s costing you £200 or you can have this one which looks exactly the same then it’s going to cost you £58. That might be a slight extreme, but yeah, there’s a difference, a big difference. (WR2005)
But what I would say at this point is how difficult it is for us to be as sustainable as we would like to be. [. . .] Well, it would be a huge impact on our margin. Yes, it would eat into the margin but it’s a business decision as to whether you will increase the market you can sell to, you know your target market, by doing this. So . . . it’s a classic cost benefit exercise. (WR2006)
At the extreme, prioritising sustainability objectives over business goals can have material consequences for the firm.
I’ve prioritised [sustainability] because it is the whole point of the brand and therefore other aspects have gone by the way side and that’s possibly why possibly, you know, if I just focused more on marketing and driving sales then maybe it would be more profitable venture now, so it’s really it’s really hard [. . .] yeah, I prioritised it, but to the detriment of the business [. . .] yeah, sales have suffered (WR2008)
Participants often reflected on the moral importance of net zero engagement, to which they expressed a strong commitment, they also expressed future-oriented narratives of change and hope, before acknowledging the need to focus on sustaining and growing their business. This conflict provoked strong feelings, as demonstrated by emotive language as they described a planet that is doomed, and a desire to deliver a better future for everybody, but also overwhelming business needs, which can be really hard to manage.
The effort required versus the impact achieved: An unfair burden for little benefit?
A second tension, evident in participant accounts, was linked to the difficulties that engaging with net zero practices presents as a small firm, compared to the impacts that believe they they can effect. So, while acknowledging the need to engage in sustainable practices, it was noted that costs might outweigh impacts. This is often characterised with recourse to comparisons with larger, more powerful businesses, their small size and position in often lengthy supply chains meant they felt little control and had no voice at all, while bigger firms can do a lot more.
At the beginning of the chain, . . . I’ve got absolutely no control over that side of the process, what I have got control over to a certain extent is working with reliable suppliers, you know suppliers, who’ve got good traceability and sustainability, but [. . .] other than that, there’s not that much that I can do so that I think is my frustration with net zero as a small company, what else can I do? [. . .] To me, the people that can really make the biggest impact are the supermarkets the packaging companies and, single use plastics. [. . .] For my business size I have no voice at all. I you know, I don’t have a voice. (WR2005)
. . .companies like let’s say Unilever, Nestle, Coca-Cola who know the contribution they have made to the problem we’re going through today [. . .] So when Nestle talk about their plastics, there’s a lot to answer for in terms of their plastic production around the 100 years that they’ve been around and how long it took them [. . .] And I appreciate that 100 years, they can’t turn back the clock but my view is that they could have done a lot more, a lot sooner, and even today they can do a lot more [. . .] I think the larger companies, they shout more than they really do (WR2006)
Narratives of injustice and resentment followed, as participants spoke of the disproportionate expectations they felt were put upon small businesses who are required to behave like big businesses and we’re not a big business which is [c]ompletely unfair.
I think what we found is because we deal with public sector bodies and [. . .] they’re always trying to make small businesses behave like big businesses in as much as you know ISO 9001 they want all these things which we did have, [. . .]. But you know it’s alright for big businesses to have that, but they’re asking small businesses to behave like big businesses and we’re not a big business. We’re a small business; we haven’t got the money or the members of staff to throw at maintaining these accreditations. [. . .] (WR2003)
[pollution regulations] did have an impact on my profits to be fair. No, I didn’t think it was fair either on people that had just started a small business, you know one I was one of the small businesses and there’s bigger companies out there that have been running for years. Yeah, so that you know, they’re not feeling anything in their pockets, but small businesses [. . .] Completely unfair. (WR2007)
Ultimately, small firms perhaps felt that the costs and investments required to be sustainable are unfairly placed on them since it’s not them that’s causing the problem. The costs can be overwhelming, and they felt nowhere near qualified to engage.
I think with Micros I think sometimes they feel possibly it’s not then that’s causing the problem as well. So, I think when we think about sustainability and climate and environment, we envisage in our head power stations, you know, polluting the atmosphere. We think about China, we think about some of the importing that goes on [. . .] So we’re kind of like, I suppose the little tugboat that’s out there, you know, puffing away trying to turn Titanics out there, (WR2004)
The biodiversity net gain game will raise us, will give us about 150 grand a year by the time we’ve paid the salary of a land manager who is going to be running all this, pay for machinery, pay for fencing to go around the whole perimeter of the estate. Pay for tractors and pay for seeds and pay for new trees and tree surgeons. Everything like this, we’re going to be way over that 150 grand a year. [. . .] So we’re know we’re just nowhere near qualified to be able to roll this out ourselves and know what we need to do (WR2001)
Here again, emotive language suggested tension between wanting to invest the effort to be more environmentally friendly and desiring to make a real difference. Narratives of powerlessness were quickly followed by expressions of injustice and resentment, driven by the conviction that larger firms could do much more and expectations upon smaller firms are inherently unreasonable. Thus, regulations are completely unfair, and they spoke of frustration at having no voice at all.
Wanting to engage with net zero versus wanting to avoid accusations of greenwashing: What even is net zero?
Participants often talked of wanting to engage with net zero, but their accounts reflected worries that their initiatives may be seen as cynical attempts to appear green and thus, deemed to be greenwashing. By discursively distancing themselves from immoral ‘others’ who may engage in greenwashing they effectively asserted their own moral intentions, presenting themselves as authentic and morally aware. As one participant put it, it really is important that we aren’t green washing, that we are genuine. This made them reluctant to engage, and where they did engage, reluctant to publicise it.
. . . we are conscious of green washing, we’re conscious of not just saying things in order to say things but actually be able to justify what we’re saying [. . .] (WR2006)
. . . it really is important that we aren’t green washing that we are genuine. But I don’t know too much at the moment [. . .] And I wouldn’t know where to start. So, I think the challenge is, not finding the time, but I’m hoping that [someone] can guide me, hold my hand through it and guide me through the stages, because we’re sort of starting from scratch [. . .] (WR2013)
I didn’t speak much about the good things that I was doing because of the worry of greenwashing [. . .] I get really angry when I see other brands green washing [. . .] seeing competitors green washing and knowing that they are, to get the sales and that’s what. But it’s like it’s a complex area because that isn’t what all greenwashing is [. . .] yeah, yeah, it’s complicated. (WR2008)
This tension appeared to be rooted in the uncertainty regarding what actually constitutes net zero, and their accounts demonstrated significant anxiety related to the definition of the concept itself. Here, we see hesitation as they talk of being totally confused because it is very very muddy as to what actually is net zero. They were also unclear about what the initiatives they adopted allowed them to claim. This was exemplified in the frustration voiced by a leader who has driven the adoption of a wide range of net zero initiatives [a]nd yet, our business still doesn’t count as net zero.
I can’t offset things, cause it’s then seen as greenwashing. And I’m like, well, what do you expect me to do then? [. . .] I was totally confused as to what I was expected to do as a small business [. . .] I don’t know how to do that other than you know planting trees and doing this and doing that and . . . you get told that well, that’s just green washing and that won’t cover you. OK well, what do you do then? I found it very very confusing [. . .] Literally not knowing what to do next. [. . .] I literally don’t know what to do (WR2005)
The thing I struggle with the most around the term net zero is as a hospitality business that’s only open for six months of the year with no electricity other than in our glamping barn with no air conditioning, with no single little shampoo bottles . . .that hires a local team that aren’t commuting very far in terms of sort of polluters [. . .] And yet our business still doesn’t count as net zero. And that to me it just seems very, very confusing and very very muddy as to what actually is net zero. If as a business, you’re a low polluter and you’re running a rewilding program on your site and you can’t count yourself as net zero. . . (WR2001)
Perhaps as a consequence of this confusion, participants expressed doubts about their ability to understand and engage in net zero.
. . .not all carbon calculators are the same. So, something like that would really help us to understand our carbon footprint really well and help to show other companies and show our clients our commitment. The biggest question I find people asking is how do I calculate my carbon footprint? (WR2014)
I love the concept of it [. . .] But how do you do it? (WR2005)
Once more, tension was evident in these narratives of legitimacy and fear as leaders expressed a desire to be green whilst avoiding accusations of greenwashing at all costs. Uncertainty pervaded their conversation here – they spoke of [not knowing] where to start, and literally not knowing what to do next because [net zero] just seems very, very confusing. This clearly provoked anxiety and annoyance as they worry about greenwashing and struggle to understand the way forward.
Divergent policy narratives
Having identified the paradoxes of SME concerns, we shifted our focus to the policy perspectives’ we found that the messages emerging from each level were inconsistent, potentially reflecting the distinctive position of each organisation or actor (Allison and Zelikow, 1971). We argue that these divergent narratives may feed into the paradoxes that we detected in participant firm accounts.
Local level: Stevenage Borough Council’s climate change strategy
In their Climate Change Strategy document, the local council’s direct net zero priority is on housing stock, transport and planning. While there is mention of SMEs, all small business actions are outsourced to a third-party organisation. The council asserts that urgent efforts must be made by The Council along with the town’s residents and businesses to halt carbon emissions and remove the greenhouse gases from the atmosphere to prevent unsustainable global warming resulting in sea level rising and increased intensity and frequency of natural disasters. Stevenage, they note . . . is home to an impressive range of small businesses and lots of tech-based industry. They also point to the fact that [i]ndustrial and residential users make up nearly two-thirds of carbon emissions. And that . . . [t]he green recovery also presents opportunities for our residents and local businesses in adapting to climate change. The council makes the following commitment:
[t]hrough engagement and collaboration we will continue to work with our residents and businesses to and inspire them to make to the way they behave and consume/ generate carbon. . . With SBC demonstrating best practice in carbon reduction, smart ways or etc we can show our businesses how they too can make working changes
The council report concludes by identifying three priority areas for action: making their housing stock more carbon neutral, making transport in their area more sustainable, and ensuring that the planning system encourages lower carbon and more sustainability in new developments. While these may have indirect impacts on businesses, they do not constitute direct interventions that focus on net zero in any businesses. Stevenage council’s website offers more clarity on its approach to the net zero agenda for businesses, and it shows that the council has outsourced action to a third-party organisation. Implications of outsourcing for the council include a potential lack of future policy learning and may also suggest to SMEs that they are lower priority.
Since 2022, the Council has funded 200 Gold Memberships for Wenta’s Action Zero Programme, its net zero support service that helps Small and Medium Sized Enterprises (SMEs) to better understand the risks and opportunities related to climate change and net zero targets. The service includes evaluation of carbon footprint, setting reduction targets, developing carbon reduction plans, monitoring and reporting progress. Along with the support and guidance, SMEs could also obtain environmental accreditation to demonstrate their commitment to climate action and net-zero.
Regional level: Herts County Council’s strategic action plan for carbon reduction
Hertfordshire County Council’s carbon reduction plan addresses business in general terms, but there is no mention of small business needs. All business-focused actions are allocated to the Local Enterprise Partnership (LEP) which in turn offers very little SME-facing action, apart from a mention of carbon emission reporting. The document notes that local authorities have powers or influence over roughly a third of emissions in their local areas. More than half the emission cuts needed rely on people and businesses taking up low carbon solutions. Of the 23 key actions, seven focus on business and all of these are outsourced to the LEP:
Hertfordshire LEP’s Clean Growth Strategy builds a way forward for green clean economic growth, by futureproofing and supporting our businesses as they transition to meet the UK net zero targets and challenges and by accelerating enterprise and innovation, collaboration, and skills development to grow and attract a low carbon economy and create new jobs.
The Strategy for Clean Growth document published by the Hertfordshire LEP identifies two pillars: developing the green economy through the growth of the Low Carbon Environmental Goods and Services and delivering transformational wider outcomes to which all parts of the economy and all places within Hertfordshire should contribute. The second pillar offers a general focus on business with 16 priority actions established, including two aiming to engage all businesses with the net zero agenda:
To compile and deliver a clear and illustrative net zero checklist of key best practice actions, and to promote this list to businesses across Hertfordshire.
To deliver a sustained ‘net zero Low Cost’ campaign to signpost businesses to the Growth Hub for green support and advice.
Of the 16 priorities, only one references SMEs or smaller businesses, and it has a strong focus on carbon emission reporting:
To build the capacity and capability of SMEs to report carbon emissions, enabling them to compete with larger companies which record this and use it as a selling tool or a purchasing requirement.
Other than this, where the 16 objectives mention business they focus on major projects, high energy businesses, and major development projects.
National level: The UK Government Department for BEIS net zero strategy
Perhaps unsurprisingly, the BEIS net zero strategy evidences a strong focus on specific sectors – those that pollute the most. Its strong message is that largest polluters should pay the most, and on power/energy sectors. There is practically no SME focus. The underlying strategy is very clearly stated:
The government’s approach will . . . support the principle that those who produce the pollution should bear the costs of managing it.
We will ensure the biggest polluters pay the most for the transition through fair carbon pricing
The strategy offers clear actions in respect of these large polluters:
Industrial CCUS (Carbon Capture Usage and Storage) is fundamental to decarbonising of industries such as chemicals, oil refining, and cement.
We are now setting up the Industrial Decarbonisation and Hydrogen Revenue Support (IDHRS) scheme . . .to enable the first commercial scale deployment of low carbon hydrogen and industrial carbon capture.
Future-proofing industrial sectors, and the communities they employ through the £315 million Industrial Energy Transformation Fund (IETF)
. . . greenhouse gas removals (GGRs) will also play a critical (
Tessaro 2022
) role in balancing residual emissions from the hardest to decarbonise sectors such as aviation, agriculture, and heavy industry.
Small businesses receive little direct attention in this strategy, with the stated intention to address them via other organisations:
Building on behavioural insights approaches in other areas of government policy, we are keen to explore how local networks – such as growth hubs, Local Enterprise Partnerships (LEPs), the local net zero hubs, and chambers of commerce – can be used to drive energy efficient behaviours amongst businesses.
Discussion
The complexity of net zero provoking tensions and curtailing action in SMEs
Applying a tensions-based lens (Van der Byl and Slawinski, 2015), we explored the narrative accounts of small business leaders related to the net zero agenda. Our analysis of their narratives revealed three tensions related to net zero. First, there was an evident tension between sustainability goals and business goals. Second, there was a tension between the effort and cost required to engage in net zero practices and the impacts that participants perceived these efforts may have. This was often presented as an unfair burden for small firms when compared to expectations of larger organisations who they often characterised as being more culpable for environmental impacts. Third, there was a tension between wanting to engage with net zero yet, avoiding accusations of greenwashing. This was often linked to confusion around exactly what constitutes being net zero.
These tensions are illustrated by the emotive language used by participants (Putnam et al., 2016); for example, daily business pressures mean that they often did not feel they had the time or financial resources to invest in the net zero agenda. Despite this however, they also articulated deeply held commitments to sustainability goals indicated by catastrophising language related to current environmental trends, with the planet ‘doomed’ and on a ‘terrible trajectory’. We note these firms held generally positive attitudes towards net zero. Public concern about climate change has become a significant external influence, with SMEs in countries where climate awareness is high being more likely to adopt greener practices (Brinkerink and Bammens, 2024). The reported inability to engage in environmental practices given more pressing business goals provoked dissonance when the participants contemplated what they would like to achieved compared to what had been achieved to date. This led to frustration, and even despair, as they speak of, for example, feeling ‘overwhelmed’, resulting in reluctance to implement practices and prompting calls for more tailored approaches, such as sustainability maturity models (Carlsson and Nevzorova, 2025). Accordingly, policymakers might consider models that provide a roadmap for the journey towards net zero. Similarly, when discussing expectations of them with respect to net zero engagement, we detected a strong sense of resentment driven by participant assertions that small firms are disproportionately implicated as polluters compared to large organisations. Participants expressed exasperation at others ‘. . .asking small businesses to behave like big businesses’, while big businesses ‘. . .have a lot to answer for’. A deep sense of injustice pervaded these accounts, not helped by regional policies that appeared to prioritise actions for large companies. Equally, when reflecting on their desire to engage with sustainability, participants expressed significant anxiety related to the confusion regarding the term ‘net zero’. This worry was clearly linked to concerns from participants that: ‘. . .you get told that that’s just greenwashing and that won’t cover you’. And so, they speak of feeling ‘uncertain’, ‘confused’, and even ‘angry’.
Participants clearly experienced, and presented, tensions they perceived as contradictory and divergent; they were considered incompatible and cognitively difficult to embrace; this may explain the emotive nature of the comments. They clearly felt uncomfortable in the face of conflicting goals that were experienced as both pressing and intractable. Reflecting prior literature, viewing divergent goals in this manner appeared to encourage participants to simplify the tensions by characterising them as binary - divergent and incompatible – so, anticipating and articulating win-win or trade-off outcomes. This allowed them to identify straightforward solutions and quell the emotional ambivalence experienced in the face of these tensions. Thus, economic goals were necessarily prioritised above sustainability goals, echoing the critique of win-win and trade-offs (Van der Byl and Slawinski, 2015). For small firms it was argued that the impact of any net zero investment would probably not be justifiable in term of outcomes; in addition, it was stated that engaging in net zero while also avoiding charges of greenwashing was unattainable. In pursuit of a resolution of tensions from a win-win or trade-off perspective, leaders inevitably sought to choose between the divergent objectives in which case, our evidence suggests that net zero is usually deprioritised in these circumstances. This may help to explain the challenge of embedding the net zero agenda within small firms (Phipps et al., 2023).
Our findings have has implications for the three viewpoints of sustainability-oriented strategies for small firms: structural, cultural and agential. We had fewer insights for the supply chain impact in part because these were early stage entrepreneurial firms. It may be that the demands from members of the supply chain may focus the firms on net zero as part of developing the business, reducing any trade-off between business development and environmental sustainability (Courrent and Omri, 2022). For the cultural aspects, our research involves a critique of the GKM thesis that suggests net zero is an information problem (Abbas and Khan, 2023; Audretsch and Fiedler, 2024; Ri and Mole, 2022). We do not deny that the provision of information on sustainability is a factor;however the particular firms in the programme did not lack information. Our research privileges the agential, but it goes beyond the attitudes of founders (Maassen and Urbano, 2024) as focusing upon their priorities alone are insufficient. Leadership changes may help (Chowdhury et al., 2022) but, we found equivocal attitudes towards external standards (Siebold et al., 2025) as such, entrepreneurs must navigate the paradoxes they encounter. . We explain the attitude to action gap when demonstrating that positive attitudes to environmental sustainability are insufficient to explain environmental actions on the part of entrepreneurs.
We represent our findings in a diagram illustrating a feedback loop in which we show how complexity curtails action (see Figure 1). We draw on cognitive appraisal theory (Lazarus and Smith, 1988), which asserts that emotions result from the manner in which the individual interprets a situation, to argue that tensions between business development and complex net zero goals can create a cycle of feelings and inactions. As our participant data shows, firm leaders may express the desire to be more environmentally friendly, focusing on reducing carbon emissions, improving sustainability, and adopting greener practices. Alongside this, the business continues its usual activities, including developing new products, expanding markets, and ensuring profitability to survive and compete. However, tensions arise as the business struggles to reconcile net zero goals with the practical needs of business development. Hence, the firm leadership face potentially two complex phenomena. Net zero may be seen as a set of extra requirements that may be imposed upon the new firm just as the entrepreneur faces ambiguous circumstances captured by the notion of the liability of newness (Stinchcombe, 1965).
Complexity curtails action.
Figure 1 is cyclical as the issues surrounding business development and net zero remain in the background of management decisions. These problems are iterative and persist while the business develops. In Figure 1, we start at the top left with the new business considering its development – a complex set of tasks. For most new entrepreneurs, the complexity of such tasks challenges their competencyies leading to higher levels of anxiety (Csikszentmihalyi, 1991). Next, into the complexity of business development, we introduce the complexity of net zero requirements. Managers may react to complexity by reducing it through more heuristic thinking (Busenitz and Barney, 1997). The complexity of trying to achieve net zero goals and maintain normal business growth creates stress and frustration as insufficient resources (time, money, or expertise) are available to address both areas effectively. We expect this to lead to frustration as easy trade-offs are more difficult to accomplish. Further frustration arises when the entrepreneur reflects upon demands placed upon them in comparison to large companies; as noted, regulatory requirements on small firms are more onerous to introduce and embed (Bannock and Peacock, 1989). The result may be greater frustration as the entrepreneur struggles to establish the new firm; such challenges can also induce emotional responses such as anxiety if the complexity of managing net zero also induces concerns that any claims to this effect might be considered to be greenwashing. The feeling of being overwhelmed by the frustrations and anxiety reduces action (Liu, et al., 2021) with entrepreneurship and managers paralysed by the tension and complexity of the situation so they become stuck in a cycle of inaction, or minimal action. The cycle then repeats itself: as less action is taken toward net zero goals, the problem persists, and the pressure to reconcile business development and sustainability continues to build, further overwhelming entrepreneurs and managers. The core issue here is the complexity of managing two often-conflicting priorities – sustainability and growth – which leads to paralysis or minimal progress. This challenges the simplified approaches prioritising win-win or trade-off responses prevalent in prior research, offering a richer explanation of the complex, dynamic and often contradictory patterns of SME climate action.
The role of government and governance jurisdictions in SME climate action
Climate action among SMEs is shaped by structural factors as well as discourses; this is an important distinction that emphasises the influence of institutional positioning. As the adage goes, ‘where one stands depends on where one sits’. (Allison and Zelikow, 1971). This perspective highlights how actors within different governance jurisdictions interpret and assign responsibility for climate action based on their institutional roles and constraints.
At the national and regional levels, actors such as the BEIS and local authorities in Hertfordshire have designated intermediaries such as Growth Hubs and LEPs to support SME engagement. For instance, in Stevenage, business support organisation WENTA has been identified as a key intermediary (Kundurpi et al., 2021); however, the effectiveness of intermediaries is uneven. For example, although low-carbon SME advisers are aware of the limitations of standard approaches, they often struggle to engage with firm values and missions due to restrictive governance and funding structures (Hampton, 2018). Meanwhile, the intermediary landscape has expanded, with major business organisations such as the Federation of Small Businesses, Confederation of British Industry and Chambers of Commerce now actively shaping the net zero discourse (Hampton et al., 2024). In contrast, the German guild system illustrates how deeply embedded intermediaries with social legitimacy can play a more influential role in facilitating low-carbon transitions (Wehden et al., 2025). The German guilds are organisations with a wide membership. Driving through net zero policies using the guilds to engage directly with people in situ (Moezzi and Janda, 2014) as their role is to work with their members. For a fuller explanation of the German guilds and sustainability, see Wehden et al. (2025).
In our case, this reliance on outsourced actors to deliver climate-related support to SMEs seems to reflect the resource limitations of local government. Moreover, the prevailing policy discourse surrounding SME climate action tends to be overtly pro-growth and optimistic – what might be described as Panglossian. For example, there is frequent rhetoric about SMEs being part of a ‘new green economy’, yet this is often unsupported by concrete mechanisms or policy instruments. In some cases, such as Hertfordshire’s support for the first commercial-scale deployment of low-carbon technologies, there is actual funding available, suggesting that certain actors may emerge as winners in the green transition. Nevertheless, the costs associated with climate action are frequently invisible to SMEs, especially when compared to the burdens faced by larger polluters. This Panglossian view might reflect an attempt to retain a broad coalition in favour of climate change policies (Blyth, 2002) while prioritising ‘win-win’ outcomes (Van der Byl and Slawinski, 2015). This complex, and sometimes contradictory discourse, can exert pressure on SMEs. Mainstream media narratives, combined with policy optimism, may create expectations that SMEs find difficult to meet. Consequently, many SMEs may feel that the policy community lacks a nuanced understanding of their operational realities, leading to a disconnect between policy ambition and practical feasibility.
Limitations
In terms of limitations, our sample, as is frequently the case, is from a particular context; our study was undertaken in the count of Hertfordshire in the UK, very close to London. The location was related to location of the specific programme. The goal of empirical research however, is to generate knowledge that may apply to different contexts, through theoretical frameworks such as paradox and also, to develop knowledge that can be used in multiple circumstances. Despite variations in institutional methods, the sustainability challenges offer a foundation for comparative learning. In many different circumstances, theoretical frameworks such as paradox theory can be tested both theoretically and practically. While identifying context-specific characteristics does not reduce the generalisability of the results, it does promote contextual adaptation as a standard for subsequent comparison research. What difference did the membership of the Wenta programme make? We should first acknowledge that this was an add-on programme to a start-up programme. Wenta had worked already with the firms on their start-up journey. These firms were then asked to join the Wenta net zero programme that had no cost at the ‘bronze level’. Therefore, these firms selected into the Wenta start-up programme rather than into the Wenta net zero programme. Moreover, these firms may have been conflicted by the paradox between business development and net zero; yet, the net zero sentiment is one that faced by most small firms. For example, in a representative sample of UK SMEs, Mole and Ri (2023) revealed almost three in every five small firms expressed a priority to reduce their environmental footprint. So, it is quite likely that those elements which were experienced by our respondents were common to many UK SMEs.
Conclusions and implications
Addressing the conflicts that small business leaders experience while trying to adopt sustainable practices, our study goes beyond prior literature, which tends to advocate simple win-win or trade-off approaches. These approaches fail to address the inherent tensions that emerge when balancing competing priorities. Adopting a paradox lens allows us to extend the literature to offer a more nuanced understanding of SMEs and net zero. We find that when it comes to net zero, paralysed by the paradoxical tensions and complexity of the situation and given a fragmented and inconsistent policy discourse which largely overlooks their concerns, small business leaders can become stuck in a cycle of inaction or minimal action. Our findings suggest that encouraging leaders to embrace paradox and tensions may be uncomfortable, but ultimately a more fruitful approach.
We contribute to the literature on net zero with our exploration of the tensions related to sustainability objectives in a small firm context, through the paradox lens. We found that what might appear to be an intention is multifaceted and is composed of three interlinking elements which produce emotional responses to the challenge of net zero. While traditional approaches to such tensions have encouraged trade-off or win-win responses, paradox theory offers a different perspective which seeks not to simplify and resolve tensions, but to embrace and continuously manage them. Acknowledging the complexity and interrelatedness of tensions means a tacit acceptance that they may never be fully resolved, and this implies a fundamentally different mindset in business leaders. But it arguably also offers the prospect of progress towards goals that have hitherto been seen as incompatible. In the context of the net zero agenda, this may pay dividends. Our study indicates that policy narratives are not achieving significant climate action effect at the SME level. Where policy narratives laud green opportunities; SMEs seem trapped in a cycle of inaction due to the tensions that they perceive. Policy highlights a checklist of actions; SMEs are wary that any net zero actions they take risk being seen as green washing. Comparing themselves to big polluters, they point to an unfair burden of net zero action and cost, arguing that their small size means they cannot really make much impact. This suggests that net zero policies are not currently translating into action for SME leaders, perhaps because of a lack of actional information. This UK study also speaks to an international audience. Similar difficulties in net zero policy towards small firms, for example, policy and technological uncertainty, run across the OECD countries (OECD, 2021). All jurisdictions face the expense of providing advisory support to the myriad small businesses in the economy when there is churn in the business stock. Concerns about the relative costs of compliance on small firms are well-known (Kitching, 2006). Similarly, the problems of greenwashing are not confined to the UK (Delmas and Burbano, 2011).
Our study has implications for policy and practice. For policy, previous work in the International Small Business Journal has identified actors who might drive the circular economy (Klofsten et al., 2024) although the knowledge flows may be complex (Audretsch and Fiedler, 2024). Without support, guidance, or practical examples of how to achieve divergent objectives, we argue that the process can be overwhelming; to address this, businesses may need clear, simplified pathways that provide small, manageable steps to help to reduce complexity and ease the tensions. For example, there is likely to be a role for educating SME leaders to help them to understand and manage divergent goals . However, our research raises the vexed question of whether greater education about net zero might heighten the complexity and paradoxically, lead to less action. This seems especially pertinent for the tension that our participants perceive between SME emissions and large emission businesses. Our data show that SMEs may feel that as small firms, they can have little impact on net zero targets and that larger firms are both more culpable and better placed to act and make a difference. This may discourage them from adopting net zero practices. Start-ups may have more ambitious agendas, but this might vary between sectors (Engzell and Kambanou, 2024). Providing clear and compelling evidence for the role of small businesses in generating emissions may help to demonstrate their contribution.
Waste prevention and management have been seen as critical to sustainability (Ferreira et al., 2024). Similarly, our data indicate a tension between authentic net zero practices and those which are deemed to be cynical greenwashing. Here, providing clear information to help SME leaders to be confident about which practices they should adopt to avoid charges of greenwashing may help them to overcome inertia. In addition, the roadmap offered in a sustainability maturity models may lessen the tension around greenwashing (Carlsson and Nevzorova, 2025). Offering case studies or examples of how other businesses have successfully navigated these tensions could be beneficial. As noted earlier, the outsourcing of the policy areas raises some questions about policy learning. This fits in with other complaints that top-down policies fail to understand the context (Mallett and Wapshott, 2020).
For managerial practice, one might acknowledge the tensions within the firm. When it comes to the tension between net zero goals and economic business goals, however, the way forward is less clear. Our data indicate that currently, for most participants, economic goals are likely to be prioritised over net zero goals. It is not obvious how this tension could be addressed through education or the provision of additional information about net zero; our participants consistently stated they were already personally committed to sustainable goals, suggesting they appreciated their benefits. Rather, many pointed to a lack of time and resources as the reason that they do not prioritise net zero goals, demonstrating that they implicitly view economic goals as more pressing. Over and above sustainability, generating greater skills to deal with the complexity of multiple challenges within the firm may be part of developing problem-solving (Proctor, 2010). Advice might be sought but this might create to more difficulties (Jibril et al., 2023). Flexible responses to resource challenges may require bricolage (Baker and Nelson, 2005). Given government targets are likely to continue to drive legislation in this regard, and shifting public opinion on this agenda, however, we argue that in the future SMEs will need to find ways to manage the tension they perceive between net zero and economic goals, to be compliant with the law as well as with prevailing attitudes. Not to do so may itself risk the future of their business. Nonetheless, there are strategies that firms can take advantage of including networking to amend their business models towards greater sustainability (Lit et al., 2024). We suggest that adopting a paradox perspective may have a role to play in encouraging SME leaders to respond to the tensions they perceive between business and sustainability goals, by embracing and engaging with them in pursuit of a way forward that recognises both economic and sustainability imperatives.
Future research should advance understanding of the paradox of environmental emissions reduction along four avenues. First, a stage-contingent perspective is needed to assess whether paradoxes are most acute at the earliest phases of venture development, where complexity and ambiguity are greatest and the liability of newness bites hardest. This recognises that our findings apply primarily to small, young firms and that, as firms grow in size and complexity, they often gain access to specialist change agents who can take responsibility for sustainability issues (Kiesnere and Baumgartner, 2019). We might expect the tensions between business development and net zero to lessen as the business becomes more established. Programme managers mentioned that the start-up firm may increase emissions before bringing them down through the establishment of a more permanent footing in the market. Therefore, temporal aspects may be important to the resolution, or not, of the various paradoxes. Future research might examine the ability of firm managers to manage multiple conflicting tensions within business. This might focus on the strategies used since within the timber industry, for example, a continuous improvement synthesis strategy has been used (Joseph et al., 2020). In addition, scholars should examine the joint problem of newness and sustainability (Stinchcombe, 1965), seeking not only to document paradoxes but also to identify mechanisms through which some firms resolve them. For example, they may consider how firms progress on emissions reduction while safeguarding against accusations of greenwashing, a salient risk when net zero benefits are framed as reputational (Mole and Ri, 2023). It may be possible to decrease the information complexity and to formulate simple rules that might lower the cognitive load on the entrepreneur, thus reducing anxiety (Csikszentmihalyi, 1991). Third, research should evaluate the role of standards and governance that credibly recognise ‘work-in-progress’ toward net zero, potentially lowering greenwashing risk and enabling transparent signalling of partial progress. More confrontational might be to focus on the message, for example, a message frame which points out the proportion of firms that are taking action may respond to the tension of the small impact of each individual small firm (Cialdini, 1993). Fourth, given that small businesses are currently being asked to push the wheel of the net zero transition alongside other transformations (e.g. digital), generating overload, we need evidence on burden-sharing designs – policies, market intermediaries, and ecosystem supports – that lighten the load for SMEs and distribute transition costs more equitably across supply chains and institutions.
Footnotes
Appendix 1
Acknowledgements
We acknowledge the use of AI-powered assistant CoPilot in editing parts of this article to improve language and grammar.
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.
Notes
Author biographies
Maria Wishart is a Post-Doctoral Research fellow with the Allied Health Professions (AHP) Workforce Research Partnership based at Anglia Ruskin University, addressing the sustainability of the AHP workforce in rural and coastal areas. Her areas of expertise include workplace mental health, business resilience, ethics and entrepreneurship.
Kevin F Mole is an Associate Professor (Reader) in Entrepreneurship at Warwick Business School where he is associated with the Enterprise Research Centre (enterpriseresearch.ac.uk). His research interests include external support to small firms including policy choices in business support and firm growth. He is published in Journals such as the Journal of International Business Studies, Journal of Business Venturing, International Small Business Journal, British Journal of Management and Environment and Planning A and C. He has worked with OECD, and the UK government Department for Business.