With sustainability gaining traction in recent years, and as more companies incorporate sustainability practices into their businesses, it has become imperative for budding small and medium enterprises (SMEs) to join the sustainability revolution.
The first step for SMEs to integrate sustainability into their operations is to create a sustainable business model. Before making the switch, business owners should understand what sustainability means, what a sustainable business model looks like and what makes it work.
What is sustainability?
In 1987, the United Nations Brundtland Commission defined sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” In 2015, all United Nations Member States adopted the 2030 Agenda for Sustainable Development that laid out 17 Sustainable Development Goals (SDGs) designed to be a “blueprint to achieve a better and more sustainable future for all.”
Guided by the goals, companies of all sizes align their efforts with the most relevant SDGs and determine the areas where they can have a positive impact. It is believed that businesses that show a commitment to sustainability have more chances of attracting investors who pursue socially conscious business opportunities and consumers who demand transparency in sustainability efforts. In other words, it is now the chance for SMEs to take part in the conversation about sustainability in an increasingly eco-conscious world. For SMEs to set out on this path, they must begin by creating a sustainable business model.
What is a sustainable business model and what makes it work?
Put simply, a sustainable business model is one that outlines the means through which a business can achieve its goals and generate value for its stakeholders while assessing and addressing its environmental impacts. In order for a sustainable business model to seep into the fabric of any organization and to ensure long-term success, companies should identify the risks in their supply chain and then work on eliminating or minimizing these risks, such as reducing material waste and cutting out single-use plastic from products or services. A holistic sustainable business model should incorporate a range of different aspects, including social and governance impacts in the supply chain.
Mapping out the areas that could benefit from sustainability is key in developing a balanced business model that helps attract investment, recruit talent and motivate staff.
Can a company’s advanced sustainability practices affect top talents’ choice to join the company?
In 2020, a Censuswide survey reported that almost two-thirds (65%) of the survey’s respondents from UK offices said that they were more likely to work for a company with strong environmental policies. Top talents are more likely to choose to join a company that prioritizes ethics over profit, upholds sustainability as one of its core values and actively contributes to social and environmental issues. This is considered a competitive advantage for SMEs since it helps in hiring high-caliber employees.
What are some ways a company can reduce its environmental impact?
A company that wishes to have a positive impact on the environment and its immediate surroundings should start by looking inward and determining areas of improvement in its day-to-day operations. For example, companies can reduce greenhouse gas emissions generated by employees travelling for work-related business and commuting to and from their jobs by holding virtual meetings, taking public transportation, carpooling or working from home. While it is not always possible to carry out your business from home, opting for more eco-friendly options can take a chunk out of your carbon footprint.
You can also make your business and workplace greener by effectively managing office equipment and reducing energy, water and paper consumption. Here are a few ways to create a sustainable workplace:
Should small businesses care about Corporate Social Responsibility (CSR)?
According to the United Nations Industrial Development Organization, CSR is “a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.”
CSR is typically expected from large international corporations, but many SMEs across most industries can practice social responsibility on a small scale and reap benefits such as employee satisfaction, strong business reputation and customer loyalty.
For SMEs to practice impactful CSR, they should aim for a long-term strategy and consider the following tips:
There are countless ways businesses can give back to their community and implement green practices when they are just getting started. The key is figuring out the right approach for your company that can help keep your business profitable and achieve sustainable growth.