How SMBs can make our world more sustainable – on World Earth Day, and beyond
Guest article by Elisa Moscolin, Executive Vice President of Sustainability at Sage
2024 marks our 54th World Earth Day – and while we can say a lot about the progress we’ve made as a society, or not, what I’m left thinking about is the principle that Earth.org, the creators of World Earth Day, run on – collective action. It’s what I, as a business/sustainability leader, aim for when we’re solving problems as big as the existential threat our planet faces. But despite all our calls to collective action, I often see one group not being prioritised in conversations around how we get to a more sustainable world: small- and medium-sized businesses (SMBs).
SMBs are 99% of the world’s businesses, so to leave them out of the conversation is a blow to the cause. Most importantly, we know they want to participate: our research tells us that that 83% of SMBs want to prioritise sustainability – they understand how it can make their businesses more resilient, especially in today’s climate of economic uncertainty – but they feel stymied by lack of know-how, funding, and tech tools to help them measure their impact, leading to analysis paralysis and an inability to start taking action.
And that makes sense – we already know that running an SMB is hard work, but then to also expect SMB managers to become sustainability reporting leaders, climate scientists, and green financing experts is unreasonable.
So, what can time-, knowledge-poor and cash-strapped SMBs do to kick-start their sustainability journey?
Understand your climate footprint – and then set goals to help reduce it
An SMB’s climate footprint is a big part of its sustainability efforts, so the first step an SMB owner can take is to understand the business’ hotspots – what part of the business are creating the most emissions? Once they have that information, SMB owners and managers can then prioritise actions that will have the highest impact on impact reduction, which will look different for every business.
Trying to establish and execute against net zero targets can feel overwhelming, but setting incremental targets that focus on the most material activities is a great way to ensure progress is being made. Resources like the SMB Climate Hub, a non-profit global initiative, provides guidance on how small businesses can set net-zero targets, measure their emissions and develop climate strategies. Tools like Sage Earth can also help on measurement.
Because carbon emissions are set to come under greater regulatory pressure, measuring them now is also important to make your business fit for the future. By understanding its emission footprint, a business will identify and better understand its exposure to climate change risks and how they can be mitigated.
Take small first steps, like considering efficiency
Energy efficiency is often the first and easiest action SMBs can take towards progress on net zero targets. This might mean something as simple as ensuring all lighting uses the most efficient bulbs available, or as significant as installing rooftop solar panels and heat pumps in place of gas boilers. While going to net zero can often seem like an overwhelming task, small but meaningful steps like this can ensure SMBs can set themselves up for success.
Based on your business, it might also be helpful to ask your customers what they think you should focus on, or that will strengthen their relationship with you, and start there. That might be a simple change to packaging, or a shift towards sourcing more sustainable goods.
Start reporting on your impact
Measuring is the first step to accountability and action, but reporting is an important next step. Currently, only 8% of SMBs report on their impact, which is a shame because reporting could open up new financial avenues, growth, and employment opportunities for these businesses.
Reporting can seem overwhelming and complex, so SMBs should understand the most material topics for their industry sector and their stakeholders, and start reporting on those metrics first. SMBs should also look to see what reporting is mandatory in their region and industry and prioritise that over others.
Which also brings me to my next point...
Talk to your accountant
For many SMBs, their accountant is already a trusted advisor whose ability to capture and analyse a wide range of data keeps the business ticking. What SMBs may often forget is that their accountant may also be able to help them gather and report on non-financial data like their net zero targets. Accountants are now training in supporting the integration of sustainability strategy and targets into business plans, so if your accountant is qualified in this area, they can help ensure integrity of reporting, which is important both internally and externally.
Forget the jargon; think about resilience
The net zero agenda is a jungle of hard to pronounce acronyms – from ESG to GHGs. Forget about the acronyms and labels, and instead, focus on resilience. Think about the risks and opportunities that your business is exposed to. If you are in the transport industry, you are probably already thinking about the impacts of the ban on diesel vehicles. If you are in the food and beverage, disruption in supply chains and changes in consumers preferences will hardly be something you have never thought about. It is likely that when you look at it through this lens, you will discover you were already thinking about your net zero agenda. Don’t let the jargon put you off.
Ask around and build community
Getting to net zero is a big task for even sustainability professionals, so it’s easy to see how it can quickly become overwhelming for SMB leaders. My advice to them is to remember that not only are there many resources out there to help them, but that there is a wide community of other leaders who are trying to solve the same problems as them – seek them out, learn, and exchange ideas. It is why we started the Business Advice Hub , where our customers can talk to each other, and also why we offer Masterclass sessions for customers looking to learn more about certain topics like sustainability resilience.
Becoming more sustainable can often seem like a daunting task – even for a business with resources and know-how – and it can be more so for an SMB. But, by taking small, first steps, measuring progress, and knowing they are not alone, SMBs can realise the powerful potential of not only future-proofing their business but also being agents of change towards a more sustainable world.
Member discussion