Paul Clifford, Regional CEO for Azets Central region in the UK.
Andrea Hartley, CEO of Skating Panda, a creative, social and environmental impact consultancy based in London.
Small and medium-sized enterprises represent about 90% of all businesses worldwide, more than 50% of employment, and accounting for around 70% of all industrial pollution. While cost, time, the current recession, and cost of living crisis has caused sustainability to be deprioritized in 2023, the benefits of implementing it in your business are significant.
In this article, you will find information about the importance of sustainability for SME business leaders, some of the low cost high impact initiatives that can be used, and how to turn being good to the environment into profitable growth.
What is ESG and SDG?
ESG stands for Environmental, Social, and Governance.
It is a framework to help you understand how you are managing risks and opportunities. It takes a holistic view, and that sustainability does extend beyond just the environment.
SDG stands for Sustainable Development Goals.
Set several years ago by the UN, they are a relatively urgent call to action for the world. There are 17 goals, ranging from climate action, to food security, to gender equality.
Your first steps
Before anything, start to plan. Set aside a couple of hours in the calendar, and then go from there. Reflect on what you need to do, and start small. Do your research and find out what resources and assistance are available to you. Ask yourself:
- Are we heating office space when there's nobody there?
- Have we turned off the lights? Have we saved on the energy?
- Are we printing paper unnecessarily?
- Do we have recycling bins?
- Am I tracking our utility usage?
Misconceptions about sustainability
It is just a thing for big businesses. It isn’t.
It's really costly. It can be, but if you're careful and you plan well, choose an achievable goal, and break it down, then it doesn't have to be costly at all. You will get a return on any investment of time or other resources you make.
It requires a full team. It doesn't. You don't even have to do it in house. You can get a consultancy to help you.
It won't make a difference. It really will. And it will not be a choice at all soon. It is a necessity.
Branding, profits, and saving the planet
Implementing sustainability results in three benefits: becoming part of social change by making it a core part of your branding, gaining profits from cost savings, and saving the environment.
Find low cost things with immediate impact on all three of those areas, and build a work environment and habits around them. Your future employees, your clients, and your customers all care about preserving the environment, and by making steady steps towards a greener future, you are making your business instantly more appealing. It has to be important to your brand.
Gather your team
SME leaders fronting the fight for our environment will make a massive impact, and change starts from the top. You are the leader of your team. Take that responsibility, that belief, and show it to everybody.
Finding someone in your team who is really passionate about this will drive it forward a lot quicker, and spread the responsibility and workload. You have to integrate it into your core so that it's improving your business overall. Turn it into strategic information, rather than a separate entity.
“It has to become intrinsic. It has to be part of a transformation. And this isn't a tick box exercise. It's something that will become more and more prevalent in business, and it will continue to be. This isn't something we will fix overnight. It will take evolution. There will be more to do, but more rewards as well.”
- Paul Clifford
“I would go even further and say that if you haven't got it in your core strategy as an intrinsic part, you may not actually be in business a few years down the line, because of the regulation that's coming, but also because of preference from consumers, employees, etc. It's becoming obligatory. The advantage SMEs have is that you can move quicker than the larger businesses, set a really good example, and reap the benefits.”
- Andrea Hartly
“The best strength of an SME is the ability to react.”
- Paul Clifford
What help is available for SMEs?
There are resources and organisations available to help SME businesses implement or maintain sustainable practices. A lot of the support for SMEs in particular comes from the government grants and local councils, with projects to reduce carbon emissions and save energy. Talking to your local advisors and accountants is really important, because they know the channels you can go through.
Do good, don’t just look good
You have to be honest about what you're doing, and your plan. Be honest about your progress and don’t try to hide it if your business is not as far along as you’d hoped. It’s good to have reached a goal, but it’s also admirable to still be working on it, as long as you are doing what you can.
“You can't claim to be net zero while continuing to build or invest in new fossil fuel supplies or any kind of environmentally destructive actions. There's a real difference between looking good, being good, and doing good.”
- Andrea Hartley
Reputation is everything, and customer feedback has improved greatly. Your customers’ perception of your ESG policy does have an impact. Sustainability is something people care about, and a good leader listens to criticism. Be open to it, and learn from it.
Turn theory into practice
Sustainable transformation is a real growth opportunity for SME businesses. Reducing environmental impact doesn't just decrease costs. It can also increase the engagement of employees, build brand reputation with customers, and increase access to new markets and investors, because after all, sustainability isn't just about reporting or compliance. It's a way of doing business, a mindset that feeds into everything, and it's fast becoming a marker of good management, driving operational efficiency, team morale, resilience, and innovation.
SMEs might not have the economies of scale of larger businesses, but they can be much more agile and responsive to changing market demands and regulations. And if we are ever going to be able to tackle climate change, then we need SMEs on board. They can make a real difference.