Regardless of whether SMEs operate in the retail, commercial or wholesale sectors, any business activities have a carbon footprint. Historically, a primary incentive for reducing a business's carbon footprint has been the savings from reducing energy costs, with a need for more internal efficiency driving decision-making. However, in recent years, with greater awareness of environmental causes entering the mainstream, consumers are beginning to ask that the products they buy, and the companies they buy from, make sustainability a more visible priority.
SMEs often have limited resources and must ensure that any investment made increases the organization's ability to function more efficiently. This is paramount to deciding where time or money should be invested in any SME. While the business case for sustainability projects is well illustrated, deciding whether to invest in projects that improve sustainability versus using spare resources to support growth, expand staff or purchase infrastructure can be a difficult decision.
When selecting any project or priority, small businesses face constraints on the amount of staff time to dedicate to change. Whether it is creating positions solely to focus on specific projects, or finding time in busy schedules, the lack of commitment to implementing sustainability projects often stems from an inability to find the time needed to do research, assess project feasibility, develop internal know-how and implement the projects themselves.
When selecting sustainability projects for your organization, it is important to note that like any investment, projects are expected to reap positive returns in the long run. Sustainability projects often see returns that improve efficiency and reduce resource use, resulting in increases in overall profitability.
A substantial barrier for SMEs (Small and Medium Enterprises) when evaluating sustainability projects or attempting to create sustainability-related targets is a lack of available time, money or expertise within the organization to confidently make investments.
Governments, institutions and large multinational organizations have taken much of the action in combating climate change. However, one key sector remains largely unengaged: small to medium enterprises (SMEs), who represent over 90% of businesses in the world, 50% of global GDP, and account for 60-70% of industrial pollution worldwide.
Target-setting is the gold standard for ensuring long term sustainability. However, there is an apparent gap in the real estate industry. The 2016 Real Estate, Developer and Debt Assessments, conducted by data provider Global Real Estate Sustainability Benchmark (GRESB), found that only 45% of organizations assessed have set a carbon emissions target.
A recent report from global management consulting firm McKinsey & Company expects the consumer-packaged-goods market to grow by 5.3% annually for the next 10 to 15 years. Though the strong growth projection is great news for companies, investors and stakeholders, the report singles out a lack of sustainability as a factor that could slow a company's growth and diminish profits.