Sustainable business practices are being pursued and promoted by the largest, most profitable companies in the world. But many small and medium enterprises (SMEs) still think that sustainability is only relevant to large corporations. They are higher profile and attract more media attention, and thus are particularly concerned about protecting and enhancing their reputations. Big businesses also are often better-resourced and more able to invest in corporate social responsibility (CSR).
But CSR is important – and effective – for businesses of any size. SMEs account for 99 percent of all businesses, making them responsible for most employment creation and private sector gross domestic product (GDP) in our economy. That’s a lot of power that could be put to good use in effecting socially responsible change.
A partner project between the United Nations (UN) and SuperGreen Solutions, the premier local business partner for driving revenue and lowering costs through green initiatives, has acknowledged the value of SME sustainability implementation and seeks to help small businesses get on board.
“We believe the next frontier of sustainability will not be found in looking at large corporations, but individual SMEs and, as such, we should approach the problem through an SME’s eyes,” the project’s objective reads.
Greening the SME market
In past years, a business could expect to spend a considerable amount of time and money trying to become more environmentally responsible, only to receive a minimal return on investment (ROI).
Today, though, business sustainability has grown into something more. It is the management and coordination of financial, environmental and social demands to ensure responsible, ethical and ongoing success, according to SuperGreen Solutions’ website.
Sustainable business practices allow SMEs to reduce cost, improve productivity and eventually become market leaders. SuperGreen Solutions found that businesses who were recipients of their Green Compass Sustainability Award experienced 20 percent higher sales and margins, 55 percent higher employee morale and 50 percent less employee turnover.
But for some SMEs, social responsibility may simply be a new way to describe something they do already by investing in broader social values that go beyond profit. In many cases, effective CSR does not aim to reinvent the wheel but perhaps alter the way it is presented.
The triple bottom line has become a common accounting approach, evaluating business performance with the “three Ps” – profit, people, and planet. But David Goodman, president of SuperGreen Solutions, says his company adds a fourth P: promotion.
“If you don’t talk about it, you don’t benefit from market acknowledgment and you are not playing it forward and being a market leader for positive change,” Goodman said.
To run a sustainable business, you need to do more than just say the business embraces the right values. Many companies have been accused and even convicted of “greenwashing,” or falsely advertising that an organization’s products, aims or policies are environmentally friendly.
A business should be transparent and go beyond self-certification. For an SME to be acknowledged by their local market and global community as sustainable, it should follow a recognized process and become certified by a third-party organization.
“I cannot become a lawyer without going to school and sitting for the bar,” Goodman said.
Businesses can gain consumer trust with the promotion of third-party certifications and sustainability reports. This transparency could come from an environmental responsibility section of a company’s website, an annual CSR report, or certifications from B Corp, LEED, or SuperGreen Solutions’ sustainability award.
The Hershey Company is a big business that seems to have mastered the art of sustainability marketing and reporting.
The company released its sixth Corporate Social Responsibility Report earlier this month. It unveiled Hershey’s new CSR Strategy, “The Shared Goodness Promise,” incorporating four pillars: shared futures, shared business, shared communities and a shared planet.
Jeff King, Hershey’s senior director of sustainability and CSR, said the company is constantly evaluating its reporting strategies to ensure the report is relevant and complete from a business perspective.
“As a company, we publish a 10K, but we do not publish an end of year report anymore,” he said. “So, the CSR report in some respects de facto becomes that company report.”
Hershey’s 2017 CSR Report includes five pages of its CSR related awards and the performance indicators that support the other 60 pages of CSR reporting. Hershey has an additional document dedicated to its Global Reporting Initiative (GRI) submission and the company’s greenhouse gas emissions, which it reduced by 2.7 percent in 2017. That reduction was independently certified by the Climate Registry.
King stressed the importance of these third-party certifications.
“It is a clear signal to the external world that someone is looking over my shoulder verifying that everything that I tell you in transparency is accurate,” he said.
For smaller businesses looking to expand their socially responsible practices, King recommends deciding what you’re going to do, doing it and reporting your progress.
“Don’t be afraid to report on where you fell short, what you’ve learned and how you’re going to change your program to have positive progress again,” he said.
SME sustainability reporting
For small businesses ready to become more transparent, The Global Reporting Initiative (GRI) offers introductory guidelines on SME sustainability reporting. The process consists of five simple steps; planning your reporting process, collecting input from stakeholders, deciding on report content, building your report and checking and communicating your results.
If you’re still overwhelmed by the thought of going green, consider outsourcing your sustainability plans with the help of a company like SuperGreen Solutions. The company can provide third-party certification and a sustainability roadmap specifically catered for your business.
Although small businesses haven’t always been at the forefront of corporate social responsibility, it’s becoming increasingly apparent that SMEs have a big impact. In 2015, SMEs accounted for just 10 percent of sustainability reports in the GRI Sustainability Disclosure Database, with the other 90 percent coming from large and multinational organizations. Yet with SMEs serving as a key engine for job creation and economic growth, sustainability reporting is vital for both small and large organizations alike.
Originally featured on Business News Daily