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Ten tips for SMEs to get the most out of their sustainability strategies

Footprints on Sand

Even small steps can make a big difference in the long run, so SMEs shouldn’t get too caught up trying to do everything at once. Photograph: Tim Wimborne/Reuters


Powered by article titled “Ten tips for SMEs to get the most out of their sustainability strategies” was written by Carly Chynoweth, for on Friday 10th January 2014 07.00 UTC

When Sandra Rapacioli and her colleagues at the Chartered Institute of Management Accountants took a look at how businesses were implementing their sustainability strategies one thing really stood out: just how few SMEs actually had formal sustainability strategies – and how narrowly they thought about the issue.

“SMEs are still looking at sustainability in terms of cost efficiency rather than as something that can add value to their company, give them a competitive advantage and improve their financial performance,” she said.

In an effort to help SMEs get to grips with the topic, CIMA has just produced 50 pages of guidelines explaining what they should be doing and how they should be doing it. As it turns out, the short answer is “pretty much the same way as big business”. Or, as Rapacioli put it: “There’s no fundamental difference, although SMEs may come under extra pressure from outside because of their place in the supply chain, while big businesses may have more detailed reporting requirements.”

The longer and more detailed answer, which includes case studies from the UK, Canada and the USA, is available online but, there are ten key points.

1. Take a broad view

Environmental issues are important but they are only part of the picture. Considering the threats and opportunities connected to sustainability means thinking about your company’s relationships with, and impact on, employees, customers, suppliers and the broader community as well. “The social side is just as important even though it is less tangible,” said Rapacioli.

2. Define sustainability

“Sustainability can mean different things to different people … so it is important to be clear about what it means to your company.” Part of this is making sure that all your CSR activities are connected to your business strategy. “There is no point in a freight company donating money to a children’s charity, for example. It has to somehow link to your operations … I know it sounds a bit greedy but ultimately there has to be a commercial reason for embedding sustainability or it will never really be at the heart of your business … and no one will really understand why you do it.”

3. Get everyone on board

Customers, suppliers, investors and employees all need to understand what you are doing, and why. Explaining how sustainable business will help secure the company’s long-term future can help to overcome resistance.

4. Ask for help

There are any number of initiatives that exist to help SMEs – and businesses more generally – to become more sustainable, so there’s no need to try to go it alone. “In fact there’s so much out there it can become a bit overwhelming,” she said. Many companies will find that their trade or industry body is a good starting point; another option is for your accountant to approach his or her professional institute.

5. Establish responsibility

Sustainability initiatives need the backing of senior management – “If you don’t have the CEO on board it just won’t happen” – but they also rely on middle managers playing their part. Ensure that people understand both their own responsibilities and how sustainability will affect their part of the business. This might mean incorporating sustainability targets into managers’ key performance indicators, for example.

6. Take it step by step

Even small changes can make a big difference in the long run, so don’t get too caught up trying to do everything at once.

7. Walk the talk

Yes, it’s a terrible cliché, but the alternative is running into problems with greenwashing, said Rapacioli. “You can’t just talk about this – you have to actually do things.”

8. Tie sustainability to profit …

Sustainable businesses tend to be more efficient businesses; making the link clear can help people grasp tangible benefits such as lower fuel bills and reduced wastage.

9. …but don’t make profit the only measure

It is important but it’s not the only the only measure of success, and in many cases it simply isn’t a useful way of testing long-term sustainability. Businesses need to find ways to measure progress in less tangible areas, such as the strength of community trust in their organisation or the greenness of their supply chain, to make sure that they keep progress on track. Set attainable, relevant targets and review them regularly.

10. Invest in the future

“Part of sustainability is about reducing costs but it’s also about finding ways to create long-term value, for example by developing new green products or services,” said Rapacioli. For example, Zions Bancorporation in the US moved in to green banking and started investing in small school energy projects, she said. “That has given them a new client base as well as future income,” she said. © Guardian News & Media Limited 2010

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