It is perhaps not surprising that businesses have built their engines of resource efficiency around energy, waste and carbon. These are the ‘blue ribbon’ issues that continually keep sustainability managers awake at night.
But while blue chips are the power-pioneers of green business models, it’s the smaller companies that could provide the biggest environmental shifts going forward. SMEs and micro-businesses account for 99% of all enterprises in the UK – not only that, but nearly 50% of private sector turnover.
According to research undertaken by edie and Sustainable Business magazine, while three-quarters (74%) of the largest companies surveyed have taken action to reduce carbon emissions, less than half of smaller firms have done so. Little wonder when only a third have carbon targets in place.
So what is holding SMEs back? Well it’s not plain ignorance – the study revealed that 69% see resource efficiency as being a ‘very important’ driver for their organisation. It’s up there on the radar, just not being acted upon.
Defra has already calculated that UK businesses could save £23bn a year by using resources such as energy and raw materials more efficiently – often through simple, inexpensive changes. It would seem the cost issue is a red herring.
One of the main stumbling blocks is likely to be cultural. For a start, smaller firms don’t have the structures in place to fast-track new corporate philosophies, let alone channels to disseminate the rationale behind such ideology down to their staff.
But also, there is confusion – they get the theory, but wonder about the ROI in practice. Many are still unclear about the risks and opportunities sustainability creates at ground-level. For instance, how many SME directors associate ‘business as usual’ with higher operational costs, extra taxes, legislative breaches, and uncompetitiveness? Because those are the risks.
On the flipside, most who have embedded greener thinking into their business models agree that it has put them at a commercial advantage. It’s a handy reputation earner that opens up doors for new contracts and clients as well as retaining existing ones. It also tends to boost employee engagement.
Sustainability and profitability are natural bedfellows. Once SMEs are convinced enough on this, they will be inclined to act. Until then, it will remain somewhat of an aspirational goal.