The environment - how much of an issue is it to SMEs?
Notwithstanding the inherent bias in asking about ‘the environment’ (who is going to say the environment is NOT important? … ) the reality is that it has become a far more important consideration to SMEs over the years. Back in the day it was only ‘greenies’ who were willing to change their behaviour to minimise their footprint, but those days are long gone – it is clearly a mainstream issue, and it impacts on how business owners run their SMEs and the types of organisations that they want to deal with …
“Every young person I speak to is climate-obsessed. It is THE number one issue, by a country mile. The number of banks I walk past with their lights on overnight – and I know they need to do that for security, it’s totally understandable – but I just want to be a part of more innovative companies … Interestingly in our marketing we align ourselves very clearly with financial institutions doing things differently and our audience responds really well to it. So we do a lot of work with Future Super, we do a lot of work with Bank Australia, and they have the messaging to back it up, and they get it.” (Media, 7 FTEs)
“Our team is becoming just so much more socially conscious and aware and just wanting to be good corporate citizens. The latest push-back I’ve got is that we have bottled water we offer to people coming in. We’re running that out because our team is saying to us that maybe that’s a small change we can make in our business to be more carbon-footprint-friendly … And hey maybe we should donate 2 hours of our time – one employee each week on a rotating 32-week roster – to Foodbank to help go and pack meals. They’re a lot more socially conscious than they were 5 years ago. And if you’re not a business that is listening to that stuff, you become outdated quickly.” (Real Estate Agent, 40 FTEs)
“We’re just about to kick off an ESG committee internally. I think it’s important for staff and if it’s not happening already, new employees will probably ask ‘what’s your ESG policy look like?’ They want to know that they’re working for a firm that is doing what they can for the environment, it’s really important.” (Publishing, 100 FTEs)
“The environment is essential. At a personal level we live on mother earth and she’s in a lot of pain, whether it be plastic bottles or cutting down forests or whatever, in the pursuit of profit. Well, those days are gone, that’s our forefathers … So we’re changing our carbon footprint like with the vehicles we drive or the lighting we use, or even just the fact that our office footprint is 50% smaller than it was a year ago. We’ve gone paperless. We use the United Nations Sustainability Goals, there’s a list of 17 of them and we try to abide by those.” (Business Services, 300 FTEs)
Business owners aren’t simply focused on the environment because ‘it matters to customers’ … indeed, while it MAY/DOES matter to customers, the reality is that the sustainability focus is being driven by the SME, not simply in response to customer expectation or demand …
“It’s something I presume is important to customers but it’s certainly very important to me.” (Vintage Photography, 1 FTE)
“Of course it’s important to customers but it’s something we’re driving here, particularly through our younger staff because environmental concerns are very real for that generation.” (Restaurants, 48 FTEs)
“It’s a personal thing. I think it’s negligent of businesses that only do it because of pressure from customers. It’s got to be in a business’ DNA.” (Gin distillery, 50 FTEs)
“It’s something I believe in, I always have. Even just down to making sure that any paper or wood product we use is FSC approved. I don’t know if it’s important to my clients, but it SHOULD be.” (Health Facilitator, Sole Trader)
The packaging that they use is frequently cited as an illustration of initiatives SMEs have introduced to minimise their damage to the environment …
“I try to play a part where I can. I choose sustainable and biodegradable packaging and if I have a choice of two suppliers offering the same product, I will always go for the one that is more environmentally friendly. We all have to do our bit for the planet.” (Online tea merchant, sole trader)
“We aim to be completely sustainable in everything we do by 2025. We’ve eliminated all plastic in our packaging and only use recyclable paper, even though it’s twice as expensive. It’s all very costly but we feel very strongly about it.” (Skincare importer/wholesaler, 21 FTEs)
“Those factors do play a part in my business. The cocoa I use is sustainably produced and can be traced to its origins. That’s really important to me. Packaging is also a big part of my decision making. Instead of polystyrene, I use a different type of recyclable and biodegradable product … but it’s super expensive!” (Chocolate artisan, sole trader)
“As a business we’re putting solar in the roof, it just seems that it’s the right thing to do. We’re looking at carbon offset opportunities and we’re talking to a specialist company about that … we’re also making sure that our mailing house uses de-compostable wrap for the magazines, that type of thing.” (Publishing, 100 FTEs)
“It comes into play a lot with our physical production and design and I’m becoming more mindful of that. We sort out our soft and hard plastics for recycling and I try to avoid floral foam where possible. I actually get some clients who specifically ask if I use floral foam, so I’ll always find alternative solutions for those requests.” (Florist/event stylist, 1 FTE, 4 casuals)
As is evident in many of the comments above, SMEs look to deal with organisations that don’t simply pay lip service but who walk the talk in their ESG/environmental performance. That said, some suggest that establishing the environmental credentials of the organisations that they deal with isn’t particularly easy. One organisation that is called out by SMEs for its environmental focus is Bank Australia …
“I really like ANZ as a bank, they’ve not put a foot wrong for years with me – but Bank Australia is better with the green policies … (Q : Where do you get your information on this type of thing?) There’s a website marketforces.org.au and they assess the green status of companies.” (Vintage Photography, 1 FTE)
“I have pondered whether I should change away from NAB to Bank Australia but I’m lazy and I haven’t been bothered. We use AWS and they are quite focused on renewable energy. Some things aren’t so easy to change though – like if your whole system is with Google but then you find out they’re not great for the environment – well it’s more difficult to change than you’d think.” (Energy start-up, 2 FTEs)
“Once we’ve paid off the home loan we’ll look to go with Bank Australia who have got pretty well-established environmental credentials.” (Health Facilitator, Sole Trader)
“I don’t know what CBA’s position is. Do they invest in dirty technology and dirty fossil fuels? I don’t know. I wouldn’t mind knowing. I know Bank Australia, for instance, has a very credible position amongst the impact/ESG scene. I don’t know what the CBA’s position is. I think it would be really useful for them to make it known to their customers what their position is on all that. For obvious reasons it’s becoming more and more important.” (Publishing, 100 FTEs)
Conclusion
The environment is front-and-centre in the thinking and behaviour of many SMEs. Business owners personally feel very strongly about it, and even if they don’t, their employees do. It impacts on their decision making and selection of which suppliers to deal with – and it would play an even more significant role in decision making if the environmental credentials of their suppliers was more evident. Whilst it may be ‘good for business’ to be seen doing their right thing by the environment, this does not seem to be the reason SMEs embrace it. Given the importance of ESG concerns to younger employees/business owners, this will only dial up in importance in the years ahead.
