In an era where environmental concerns and social responsibility are at the forefront of global discussions, the business landscape is undergoing a significant transformation. Purpose is being pushed to the heart of business development as financial markets increasingly look to Impact Investment – this trend is certain to push along supply and value chains as ESG disclosure requirements increase.
There are 5.6 million registered businesses in the UK (as at the start of 2023), only 8,000 businesses had more than 250 employees. Over 99% businesses in the UK are SMES providing products and services, some direct to customers others to Corporate Clients.
If you are on the fence about why to look at Sustainability in your business now, read on to learn of the tangible benefits that can result from adopting more environmentally sound and socially responsible practices.
Cost Savings through Efficiency:
Sustainable practices often go hand-in-hand with increased efficiency. Reducing waste, optimising energy consumption, and streamlining business processes contribute both to a smaller environmental footprint and can also lead to substantial cost savings for SMEs.
By embracing sustainability and empowering your workforce to identify waste they see day to day in the organization, you can identify areas for improvement in resource usage, subsequently trimming unnecessary expenses (and decide whether or not to reward employees who identify these savings!).
Where you can’t make further reductions, looking at ways to generate your own electricity or moving your supply to a green tariff demonstrates to employees a willingness to adapt the Company to protect the environment and a focus on the long term.
Attracting and Retaining Talent:
Gen Z is increasingly prioritizing ethical and sustainable practices when choosing an employer. SMEs may not always be able to pay as highly as large Corporates, however, by championing sustainability you can differentiate your brand, appeal to environmentally conscious employees as well as create a positive company culture – focused on positive impact. This can enhance employee morale, engagement, and retention, ultimately saving costs associated with recruitment and training.
Meeting Customer or Client Expectations:
Whether you serve customers or clients; both groups are more environmentally conscious than ever before. Customers often look to locally source and are prepared to pay a premium for quality items. SMEs supporting Corporate clients can differentiate their business by proactively sharing their Sustainability strategies or even aligning to their Clients’ strategies, thus demonstrating a long term commitment and shared values which may help drive longer term contracts, locking in cashflow security.
Regulatory Compliance and Risk Mitigation:
Governments and regulatory bodies worldwide are increasingly implementing stricter environmental and social standards. In the UK, Sustainability Disclosure Standards (based on International Sustainability Disclosure Standards) are expected to come into practice in 2024 for listed companies and some private companies. In due course further reporting in line with the UK Green Taxonomy may be introduced.
By proactively adopting sustainable practices, SMEs can stay ahead of compliance requirements, avoiding potential legal issues and associated penalties as well as helping their Clients’ meet their disclosure requirements.
Access to New Markets and Opportunities:
Many consumers are actively seeking out sustainable products and services. By incorporating sustainability into their business model, SMEs can tap into new markets and partnerships built on shared, long-term principles to do good.
Building Resilience Against Climate Change:
Climate change poses risks to businesses of all sizes. SMEs that integrate sustainability into their operations are better positioned to adapt to and mitigate the impacts of climate change. For example, if you have a global supply chain, understanding and planning for extreme weather events could enable you to shift production between locations or potentially explore nearshore solutions. Even for services companies with employees working from home, understanding their home environments and risks such as snow and flooding can enable you to develop better Business Continuity Planning measures.
If you feel inspired to act or would like to discuss the implications of any of the above for your business, please contact us at hello@sustainablebusinessventures.co.uk