How much do SMEs impact our environment?

It’s time to widen our focus.

Most environmental legislation is targeted at large organisations, which makes sense right? It’s reasonable to assume that these are the organisations who will be having a biggest impact on our environment. However, it is in fact Small and Medium Sized Enterprises (SMEs) that have the biggest impact. A study by the European Commission showed that “SMEs contribute 64% of environmental impact” (SMEs and the Environment in the European Union, 2010). So how can this be?

According to the report Business Statistics, 2016, there were 5.5 million registered businesses in the UK. But only about 7,000 of these were considered large organisations (250+ employees), compared to 5.49 million SMEs. Subsequently SMEs employ more people than large organisations, 15.7m compared to 10.8m respectively.

This raises three key issues:

  1. SMEs contribute to the vast majority of environmental impact and yet very little has been done to encourage or help them reduce their environmental impacts.
  2. The majority of the UK workforce is employed by SMEs so will have received little environmental education in the workplace.
  3. Most environmental services are focussed on delivering products to the 7,000 large companies. Subsequently, services and prices are tailored accordingly, perpetuating the assumption that environment and sustainability solutions are expensive and unattainable for the majority of organisations.

As environmental and sustainability professionals, what can we do about this?

Here are a few things I think could really help:

Empowering Policies

Encourage policy makers to introduce legislation or voluntary schemes focussed on SMEs. Ultimately sustainability initiatives aim to maximise the efficient use of resources. This means saving money, not spending more of it. It may require upfront investment but if it’s a good sustainability initiative it will result in cost savings, which could then be used to pay back the initial investment. Traditionally energy saving schemes, like the green deal, and other environmental initiatives have been aimed at private individuals and the residential sector. I think similar schemes could be hugely valuable to SMEs, rather than simply taxing their resource use or introducing complex cap and trade schemes. How about a scheme to provide a loan and then their pay back is based on a percentage of their demonstrated savings? This would encourage SMEs to invest in efficiency initiatives and to document their impact.

A well thought out and developed scheme could rapidly increase uptake of environmental solutions in the SME sector, create “Green Jobs”, increase awareness of sustainability issues, and reduce SMEs costs and environmental impact. That’s a win for environmental, social and economic issues, true triple bottom line sustainability.

New Services

At the same time, I believe there are new products and services that sustainability and environmental professionals can provide that will make sustainability easy and affordable for SMEs. An SME isn’t going to need a full on package or months of support but I’m sure there are ways to break down existing services into useful chunks that can really help SMEs with their sustainability journeys. Just remember, there are 5.49 million potential SME customers out there!

Let’s make it easy for SMEs to understand their impacts, the associated costs and the best route to reductions and cost savings. This doesn’t have to be difficult or complicated, in fact I believe there are many changes that can be made in just a few days that would have long lasting impacts for SMEs. A simple review of lighting, printing, procurement and transport arrangements can reveal zero or low cost ways to reduce impacts.

Let’s not forget all these initiatives are always good for business too. A customer never turned down a product or service because it was too sustainable, so it’s just as important that we help our customers communicate what they’re doing and the impact it’s had, rather than implement a solution and walk away.

I’ve developed my Virtual Sustainability Manager offering with precisely these issues in mind. I’d love any feedback you may have as to how this could be changed or improved to suit your business, so get in touch!

A Social Focus

Let’s not forget the social side of sustainability. There are 15.7 million people out there employed by SMEs and they experience just the same issues as employee’s at large organisations: equality and diversity; LGBT; disability; community engagement; flexible working; mental health; health and wellbeing. That’s a huge number of organisations who may not be aware of the support they can provide their employees, or that these are even issues that they should be considering.

There are lots of uncertainties facing businesses right now, President Trump and Brexit spring immediately to mind. But this doesn’t mean we should stop searching for new, better ways to approach these problems. There are lots of exciting new technologies and business models out there and I believe many of these can be adapted to provide exciting new sustainability services. What do you think?

Totem Sustainability can help you with any of the issues discussed in this article, if you’re interested, get in touch!

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