Within the world of corporate Sustainability or its more recent manifestation ESG (environmental, social, governance) there exists a paradox. We have less than eight years to achieve the United Nation’s Sustainable Development Goals (SDGs) which are meant “to give all of us on our planet a better future”. The SDGs cannot and will not be achieved without committed and intentional actions on the part of businesses – all businesses.
Small and medium sized enterprises (SMEs) are the backbone of national economies. At the start of 2021, there were 5.5 million small businesses in the U.K. (with 1 to 49 employees), which equates to 99.2% of total businesses. Globally, SMEs represent about 90% of all firms and provide roughly 70% of all employment. Collectively, SMEs have a huge economic impact but they also have significant environmental and social impacts. For example, the British Business Bank estimates that SMEs contribute to between 43-53% of greenhouse gas emissions by UK businesses. Consequently, the involvement of SMEs in corporate Sustainability is critical. However, and here’s the paradox, SMEs generally find themselves overwhelmed by the ever-increasing ESG requirements.
Put simply – SMEs are overlooked and under-catered for in the increasingly complex world of corporate Sustainability. The attention on big companies has contributed to the misconception that only big companies with large budgets and lots of resources can make a difference. But this is not true, environmental and/or social initiatives do not have to be big or expensive to make a difference. In addition, such initiatives can save small businesses on costs, increase their productivity and efficiency, and improve their reputation.
There are several easy (and cost-effective!) steps that SMEs can take to get started on their Sustainability journey. Over the course of this new series, we will provide SMEs with advice on some of these actions – including access to frameworks, templates and checklists that simplify ESG and Sustainability.
As a foundation for success, however, SMEs should follow these three rules:
1. Be committed: No matter the size of the company, the team at the top of the company must fully endorse, embrace, and champion Sustainability. Once the top team have embraced Sustainability, employees must then be engaged in the needed organisational and cultural change.
2. Be focused: Each company should carry out an assessment to understand its positive and negative environmental and social impacts (E&S). Companies can do so on their own or seek external help. Based on this assessment, a business can then prioritise which areas to focus on when deciding what environmental and social management actions to take. Don’t be overwhelmed by the noise – no company can address everything!
3. Be realistic: Set realistic and achievable targets – targets that are based on robust data and linked to business decisions and plans. Small actions add up. For example, to reduce emissions SMEs could introduce a cycle to work scheme, insulate their buildings, switch to LED bulbs, introduce motion sensor lights, switch appliances off rather than leaving them on standby, and install a smart meter to keep track of their energy usage among numerous other things.
Collectively, SMEs can have a huge impact in meeting our present needs without compromising the ability of future generations to meet their own. Just as it takes a village to raise a child, so it takes companies of all sizes and shapes – large, medium, small, and micro, global and local – to achieve critical global environmental and social goals.
Written by Rosalind Kainyah MBE, an authority on Sustainability and responsible business with over 30 years of combined legal, international, executive and board level experience, and Helen Stickler, Co-Founder of Triplo ESG.