12 February 2021 - CISL’s Accelerator Programme Director, Eithne George recently lent her expertise to Lloyds Banking Group and wrote a chapter for their new book: Yes Business Can, which aims to help small British businesses maximise their potential. Here are the key recommendations for SMEs looking to take action on sustainability.
Before the outbreak of Covid-19, few risk registers for small businesses would have included a global pandemic. Now, planning for major disruption and identifying ways to be resilient during scenarios that can be hard to visualise will increasingly be something that businesses of all scales must grapple with.
Against the backdrop of a climate emergency, the destruction of nature and biodiversity, and an increasing gulf between rich and poor, the challenge for business is enormous. The timescales are such that we need to act now or risk facing an increasingly disrupted future. Sustainability must be considered as part of the process of reconfiguring how we do business in a post-pandemic world.
What are the key business drivers for SMEs?
1. Green recovery
Recovery investment from governments around the world is likely to be directed to building back better. This creates a significant opening for businesses with sustainability solutions to secure new opportunities by demonstrating how they contribute to the goals identified.
2. Talent attraction and staff commitment
Today’s job seekers prioritise purpose-driven work with companies whose social and environmental impact is evident. SMEs with strong sustainability credentials will be better placed to attract quality employees and build a loyal and dedicated team.
3. Customer loyalty
According to Accenture Chemicals’s ‘2019 Global Consumer Sustainability Survey,’ consumers are purchasing more sustainable products than ever before. Nearly three quarters (72 per cent) of respondents said they are currently buying more environmentally friendly products than they were five years ago, and 81 per cent said they expect to buy more over the next five years. For SMEs, sustainable and ethical business practices are an obvious and necessary requirement to drive greater brand loyalty.
4. Brand differentiation
By using environmental credentials to their advantage, SMEs can develop new growth opportunities, including collaborations with suppliers and new partners. It offers another point of differentiation to set them apart from competitors, significantly improving their brand image and ensuring they stand out in the marketplace.
5. Resilience to new and upcoming regulatory requirements
Given the scale of global environmental challenges, governments worldwide are increasingly introducing new regulations and frameworks that drive sustainability across all sectors. By laying the foundations for more responsible and inclusive practices, SMEs will be better placed to comply with legislation and meet changing market needs.
6. Operational efficiency: reduce waste and save money
Becoming more sustainable can appear expensive, but it will pay off in the long term. By optimising current processes or introducing more effective ones, SMEs can reduce their energy consumption and produce less waste, which will generate huge savings over time and improve operational efficiency.
7. Access to finance
Investors are applying much more scrutiny on the environmental performance of SMEs. Business owners should be able to prove their eco-social credentials using impact reporting to attract investment opportunities and secure funding.
Taking action
It can be hard to know where to start, so here are seven simple and achievable actions SMEs can take to strengthen their sustainability and social responsibility.
1. Understand your in-house expertise
Kick-start the process by finding out what your team already knows about sustainability. A simple survey that covers everyone can be a quick and easy way to identify if there are any natural champions within the company, even if it has never been in someone’s job description.
2. Assess the impact of your business in the round
Spend some time – from two hours to an entire day – with a big sheet of paper sketching out what you think the impact of your business is in terms of people and planet, involving as many colleagues as possible. Assessing the likely impacts in this round and establishing what is known at this point will help your company to think more strategically about how to tackle the issues in a manageable way.
3. Data gathering and assessment
Once this initial overview has been undertaken, there will be an outlined understanding of the impact of your business. The next step is developing a strategy to source the information needed to gain a detailed understanding of the company’s footprint. Identify who in the business is best placed to source the data and how it will be recorded and monitored going forward.
4. Benchmark your performance
At a certain point in the process, when sufficient data has been gathered, it is time to try to understand what the data says about the business through benchmarking. Online tools like carbon assessment calculators can help build a more detailed picture of where the business is performing well and where the weak points are. Going forward, your company can communicate its strengths whilst continuing to work on the weaker areas.
5.Weigh up the bang for buck
Few businesses will be in a position to make all the changes they identify as necessary immediately. It will be a phased process and it is important to consider which options will give the greatest impact for the lowest effort and expenditure. Engaging widely within the company when considering how to prioritise is an important part of the process and will likely lead to a more successful integration of new sustainability practices than if it is purely a board decision.
6. Develop a simple action plan
Once the potential actions have been identified and conversations have been had about the various advantages and disadvantages of prioritising some over others, the basis of a simple action plan has been created. It just needs to be captured. As with any good plan, it should consist of clear, achievable goals. It should also be evident whose responsibility it is to implement the changes and monitor and report on performance, as well as define a schedule for reviewing performance against the objectives and revisiting the plan when the goals have been achieved.
7. Talk, talk, talk
The company’s communications strategy will have identified all the opportunities to successfully showcase what has been achieved. It is important to implement this, not missing any new opportunities that arise. External communications will be as important as the internal dialogue and understanding of sustainability efforts in identifying how to revise the action plan once the first set of goals has been achieved.
Click here to download the full Yes Business Can book by Lloyds Bank, with chapters on resilience, cyber risk management, women in business and integrating sustainability into your business strategy.
