June 25

Why most sustainability advice doesn’t work for SMEs

When I started Small Mighty CSR in 2019, there was very little useful information out there for small businesses to be more sustainable.

Recently, I’ve been heartened to see more organisations wanting to address this problem and provide support and guidance. However, a lot of it misses the mark.

From 5 years of learning what it’s like to be a small business owner myself, and from working with over 100 small businesses through various projects, I’ve learned a lot about the realities of small business, and why the usual sustainability advice just doesn’t work!

So here’s three lessons I’ve learned about small businesses and sustainability.

1.Small businesses aren’t starting from zero!

Here's a surprising truth: most small businesses are already practising sustainability—they just don't call it that yet.

While there are still the occasional small businesses that print every email and don’t use their recycling bin, they are a dying breed.

In my work with SMEs, the thing I've seen again and again is, especially compared to their larger peers, they inherently try to *do the right thing*.

They:

  • Try to be efficient with their energy use, be that swapping light globes or simply turning things off
  • Care about social causes and have some of the highest rates of charitable giving and volunteering
  • Try to pick better packaging or reduce plastic where possible
  • Offer equal opportunities to anyone ready to learn and committed to work
  • Give back to their community and support other local businesses, sports clubs, events, etc.

They just don't document all of this in a policy, and they definitely don't think of it as 'ESG'. Once they learn what 'ESG' means in practice, they often say "Oh! We're further along than we realised!"

They just need to learn to view their efforts from a sustainability lens to see how those efforts fit together and what's missing.

To all those small business owners: thank you. You’re creating a positive impact without expecting a return on investment 😊

2.One size does NOT fit all!

It should be obvious, but you can't just shrink down a full corporate sustainability approach and apply it to small businesses. Yet I've seen that approach time and again in guidance provided by well meaning large organisations trying to help small businesses. They're all about systems, processes, policies, data, targets and reporting.

To be honest, this is a bigger issue in the "sustainability" industry - when we evaluate what is 'good' (in ESG ratings, ISO standards, etc), it's most often about how well it's managed, built into business plans, how comprehensive it is, etc. Rarely the important part - the impact the business is having.

Small businesses are motivated to take action, not measure. They can’t waste days assessing and strategising. But they are very skilled (by necessity) at focusing on *outcomes* and prioritising.

So rather than encouraging the full ‘best practice’ model, we need to focus instead on the outcomes we want SMEs to achieve – a lower carbon footprint, a supported, healthy workforce, more circular products and less waste, etc.

And what actions can they take to have the most impact with the limited time and resources they have.

Measurement can come next, because who doesn’t want to see how well they’ve done?

3.SMEs need laser focus

We all know that saying, “you can't please everyone,” right? Well, it’s especially true for small businesses in sustainability!

The hardest thing about sustainability is the overwhelm of all the different expectations, all the issues and interests we're trying to tackle under the same banner. ESG can be like a maze. So for small business without the large resources to manage it all, you need to be extra strategic.

Don't try to do it all - first identify HOW sustainability is important to your business, and to WHO. Is it corporate procurement buyers? Is it conscious consumers you're looking to attract? Is it Gen Z employees? Once you know this, focus on what matters most to them.

Leave it to the big corporates to attempt to cover every sustainability base. As a small business, your strength lies in your agility and ability to focus your efforts where they’ll have the most impact. This doesn't excuse damaging behaviour elsewhere, but if every small businesses focused on just one area to make a real difference, collectively we'd make a mighty impact!

Providing the right support

Small businesses are critical to addressing our sustainability challenges. They employ 70% of the workforce and contribute to 40% of Australia’s carbon footprint. But we can’t just treat them like mini corporates.

Sustainability for SMEs is less about ‘best practice’ and more about outcomes. It’s about making sustainability work for the business and meeting them where they are with practical actions.

SMEs want to do the right thing. So let’s be better at helping them!

About the author 

Sara

I believe in the power of small business to have mighty impact. After 15 years driving sustainability in corporates and government, I am bringing my expertise to support small businesses - those with the passion, innovation and agility to tackle the world's greatest challenges.


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strategy


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