Engaging urban SMEs in net-zero transitions to mitigate climate change: Navigating multi-level governance challenges

Engaging businesses in net-zero transitions is essential; yet, little research explores how governance frameworks shape the climate actions of small and medium-sized enterprises (SMEs). We address this gap by examining how a multi-level governance (MLG) framework and its interventions support SME climate actions in Melbourne, Australia. Drawing on 27 interviews and content analysis of policy documents, we analyse how Melbourne’s existing MLG arrangements influence climate initiatives within hospitality SMEs. Findings reveal a crowded landscape of government agencies and policy delivery mechanisms, frequently duplicated across governance levels, which generated confusion and distrust among SMEs. Additionally, governance actors often faced capacity constraints and could not adequately support SMEs in their climate actions. By analysing the complexities, nuances, and limitations of a four-tiered multi-level climate governance (MLCG) system in Melbourne, this study contributes to the iterative conceptualisation of MLCG and its intersection with SME climate actions. It also identifies five future research themes within MLCG frameworks that foster SME climate actions.