Why sustainability is important in business: Smaller companies may find it difficult to become more sustainable or to contribute to a sustainable future. At the same time, we quite often fall into the trap of thinking of our impact on an individual level: what is the impact of a small business compared to large multinationals? Sustainability, however, is very relevant and important for small businesses. Here is why:
SMEs are the backbone of the economy
First of all, SMEs make up 99.9% of the business population (5.6 million businesses). They account for 61% of employment and 52% of turnover (start of 2021). This means that SMEs are very important for economic growth. Making sustainability possible on a scale that makes a difference is therefore practically impossible without the cooperation of small businesses. Even though your impact may seem small on an individual or business level, your small business is part of a whole contributing significantly to climate change and sustainability.
Sustainability is cost-effective
Research by ING has shown that cost reduction is the most important motivation for SMEs to become sustainable. For the past 2 years, we have suddenly become very aware of how volatile our world is. As we navigate through multiple crises —financial, and otherwise— it is reasonable that cost reduction has become a priority. Making business more sustainable provides a financial benefit. Think, for example, of the lighting in office buildings that is always on; at the RAI Amsterdam, an events, conference and exhibition complex, this turned out to account for 25% of the energy consumption. By replacing these light sources with LED lighting, the complex saved over 90% of its original energy consumption. But cost reduction is not the only advantage of becoming sustainable. The gas crisis is looming on the horizon and is yet another reason for entrepreneurs to get serious about sustainability.
The growing importance of ESG
Currently, bigger companies must complete a section 172 statement for their annual reports. Even though this does not affect SMEs yet, it does reflect the increasing importance of ESG and the focus on the regulation of environmental and social impact on the business level. ESG will inevitably become a driving factor in policy-making, reaching the SME level sooner rather than later. Let’s not forget that just recently the court ruled the UK plan to hit the net zero target for emissions too vague.
Subsidies for a sustainable SME
Currently, in the UK there is significant funding available to help UK businesses become greener as part of the government’s commitment to reach net zero emissions by 2050. This is likely to change (for the better) as pressure for more detailed planning rises. Almost £5 billion of funding is available to help UK businesses become greener as part of the government’s commitment to reach net zero emissions by 2050.
Nevertheless, in the last year, SMEs have invested an average of £61,250 in sustainability operations, and are planning to spend a further £78,392 in the coming year. This 27% increase is even more impactful considering the cost of living and energy crisis. This does not only show the rising importance of sustainability, but also the need to stay ahead of the curve as sustainability creates a new space for competition.
But worry not — Eevery offers a complete, practical solution to help you become more sustainable without unnecessary complexity. Measure, improve and report your sustainability performance and start right away.
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