The sustainability business case for SMEs
Claire Benson, Founder and Co-Director of SDG Changemakers, offers a compelling business case which PR professionals can use to support SMEs to adopt sustainable business models.
According to the 2021 Circular Gap Report, humanity has already breached two severe milestones:
The world is consuming 100 billion tonnes of materials a year,
It is 1C warmer.
While more than one-third of the world's largest publicly traded companies now have net zero targets, up from one-fifth in December 2020, 65% of these targets do not yet meet minimum procedural standards of robustness. Yet, the Business & Sustainable Development Commission believes that achieving Climate Action and the Global Goals will create at least US$12 trillion in opportunities.
Adopting sustainable business models
Relying on current unsustainable business practices carries inherent risk. The planet has finite resources, which endless growth and consumption are rapidly depleting. There is a difference between a business that prioritises sustainability and one that is sustainable from the core.
The business case
In the post-Covid working environment, with increased sense of place and the economic climate, there are several compelling reasons why it is the right time for SMEs to explore and take steps towards their sustainable future.
Innovation: New business opportunities can be realised through redesigning products and services to meet global challenges, environmental standards or social needs offers.
Attracting talent: In particular, Gen Z workers are attracted to organisations with values that reflect their own and take a defined and strong position on social and environmental issues.
Improving financial performance: Energy and water efficiency initiatives, recycling and waste reduction all offer opportunities to improve resource allocation, streamline operations and improve profitability. These initiatives also provide business opportunities to supply services.
Transformations in value chains: Corporations and larger companies are increasingly under pressure to make their value chains more sustainable. Consequently, it makes sense for SMEs to move simultaneously with them, learning and iterating together.
Value Creation: In an increasingly environmentally and socially conscious world, sustainable business practices can enhance brand value and ensure organisations are more resilient to shock. Michel Porter and Mark Kramer pioneered the idea of ’creating shared value’, arguing that businesses can generate economic value by identifying and addressing social problems that intersect with their company.
Investment: Lenders and investors are looking for and expecting commitment to sustainable business practices.
As a movement and a journey, sustainability is not simply measuring reporting, disclosing or complying with regulations — it is a way of doing business. Sustainability is a mindset embedded from the top and bottom of an organisation: it should be part of the business's culture and, done correctly, drive critical decisions such as policymaking, investment and procurement, and create environmental and societal benefits for stakeholders.