Consumers’ priorities have shifted recently in response to the coronavirus health crisis to become more eco-conscious. The sustainability craze is therefore likely to continue soaring in popularity, meaning sustainable initiatives can no longer take a back seat in organisations’ business models. Yet, SMEs continue to fall short when it comes to setting sustainability targets.
It’s not surprising. We live in unprecedented times, both in terms of the pandemic and the physical impacts of an impending climate crisis. Unfortunately, feeling hopeless or overwhelmed can prevent us from taking meaningful action. But we can’t continue to leave change up to larger corporations anymore.
SMEs are a powerhouse for the UK’s economy. Smaller businesses make up 99.9% of the business population, employing over 16.8 million people and generating £2 trillion in turnover in 2020 alone. Imagine what could be achieved if every SME made a greater commitment to achieving the UN’s Sustainable Development Goals.
In this guide, we’ll show you how adopting small but effective changes can make your SME more sustainable and take us one step closer to achieving the Sustainable Development Goals.
Sustainability means meeting our needs without compromising the ability of future generations to meet their own needs. There are three primary pillars to sustainability: environment, economy, social:
- Environmental sustainability: Maintaining ecological integrity and keeping the earth’s environmental systems balanced by using natural resources at a rate that enables them to replenish themselves.
- Economic sustainability: Empowering communities around the world to remain independent and have access to the resources (financial and other) to meet their needs. Economic activities are available to everyone, i.e. everyone has secure sources of income.
- Social sustainability: Prioritising universal human rights and access to basic necessities. Communities benefit from just leaders who strive to ensure everyone’s rights and freedoms are respected.
Sustainability means something different to everyone, but the aim is always the same: to leave a positive impact on the world.
What Are Sustainable Development Goals?
Sustainable Development Goals (SDGs) are at the core of the UN’s 2030 Agenda for Sustainable Development. The UN adopted these 17 goals in 2015 as a universal call to action to end poverty and protect the planet.
The goals are as follows:
1. No Poverty
2. Zero Hunger
3. Good Health and Well-being
4. Quality Education
5. Gender Equality
6. Clean Water and Sanitation
7. Affordable and Clean Energy
8. Decent Work and Economic Growth
9. Industry, Innovation and Infrastructure
10. Reducing Inequalities
11. Sustainable Cities and Communities
12. Responsible Consumption and Production
13. Climate Action
14. Life Below Water
15. Life on Land
16. Peace, Justice, and Strong Institutions
17. Partnerships for the Goals
The ultimate aim of the SDGs is to ensure that everyone enjoys peace and prosperity by 2030. A huge feat, but possible nonetheless through consistent global partnership.
Everyone has a role to play in achieving the SDGs and meeting the targets set by the UN — individuals, multinationals, and SMEs. However, SMEs may face more challenges when it comes to adapting to sustainable development.
(SDGs are a universal call to action to end poverty and protect the planet.)
Challenges in Achieving Sustainable Development Goals for SMEs
In recent years, some of the largest companies in the world have announced plans to achieve greater sustainability and environmental well-being to help ease consumers’ growing concerns over climate change and future generations’ quality of life.
For example, the Scottish brewing giant Brewdog recently announced its buy one get one tree initiative, committing to planting one tree for every multipack sold in 2021. Meanwhile, Amazon announced a $2 billion Climate Pledge Fund aimed at investing in companies that build products to decarbonise the earth.
Although, smaller businesses are not in a financial position to implement such immense sustainability initiatives, particularly in the wake of the coronavirus pandemic. However, according to a survey conducted by YouGov, 40% of SMEs don’t even have a sustainability plan in place, and 30% have no plans to become sustainable.
We’ve outlined the main challenges in achieving Sustainable Development Goals that may prevent SMEs from embedding sustainability in their brand identity and business culture.
Limited Access to Finance
To make meaningful changes and adopt sustainable practices, SMEs need access to money. However, amid a global economic crisis and with competition rife, businesses crave stability and financial certainty, which might prevent them from investing in sustainability initiatives.
On the flip side of the coin, businesses that want to switch to greener, more responsible practices might simply not have the spare funds to invest in them, making progress a serious challenge.
Lack of Appropriate Knowledge and Skills
Even if a business is armed with the funds and the people, adapting to SDGs can be a complicated process without the right knowledge and skills.
Across the UK, for example, businesses are being encouraged to cut their carbon emissions in half by 2030 to achieve net-zero emissions by 2050. In other words, SMEs are being handed a picture of the cake without the recipe. Without the required know-how or support, SMEs will struggle to reach their sustainability targets.
The COVID-19 Pandemic
Although it exposed us to the urgent need to build resilience to climate change, the health crisis created severe barriers to SMEs’ sustainable development in the way of temporary closures, redundancies and significant money struggles. While we can now fully appreciate why sustainability is critical for any business model, some SME owners may feel overwhelmed to invest in change in an uncertain and unstable economy.
How Do Sustainability Practices Benefit Businesses?
Of course, SMEs face additional roadblocks that prevent them from embarking on a sustainability journey. But, if they manage to overcome these barriers, SMEs will reap the benefits of sustainability-centric business models, just like larger corporations are doing right now, for better business performance and cost-savings.
Improved Brand Perception
As with most things in business, the bottom line is a top priority — which is why we’re starting here.
Sustainability isn’t only good for the environment, but figures show that customers are increasingly considering the environmental impact of where they shop. In fact, according to a report by Deloitte, nearly one-third of consumers have stopped buying certain brands or products due to sustainability concerns. This figure rises to 45% among Generation Z (people born between 1997 and 2015).
Businesses of all sizes need to plan ahead to make sustainability a priority throughout the value chain, particularly as wealth transfers to younger generations. By being transparent about implementing sustainability initiatives, SMEs will become a positive force and attract more environmentally conscious consumers, who will gain more purchasing power as time goes on.
Compliance With Future Regulations
Recent developments like the damning report from the UN Climate Change Panel made it abundantly clear that the time for meaningful change is now. With mounting pressure growing on governments to take action sooner rather than later, we can expect future regulations down the line to ensure that every business is doing its part to achieve sustainability.
To stay ahead of the curve, SMEs can start making small changes in their businesses now, before regulations are formally enforced and fines are inevitably rolled out.
(SMEs need to adopt sustainability initiatives now - not only are customers choosing not to shop at businesses that aren't sustainable, but we can expect future regulations down the line to ensure that every business is doing its part to achieve sustainability.)
Improved Employee Retention and Recruitment Drives
Attracting the best talent nowadays involves more than just offering a “competitive wage”. High-performing workers, particularly those from the millennial and Gen Z demographics, want to work in companies with a social purpose. By embracing sustainability and making it a core value, you can show future candidates that you’re giving back to the community.
Environmentally sustainable companies that implement initiatives like remote working will also retain employees who prioritise a work-life balance in their careers — which now accounts for two thirds (65%) of the workforce — reducing the stresses of employee churn.
According to the Carbon Trust, small businesses could save 2.5 million tonnes of CO2 emissions by reducing their carbon footprint, translating into £400 million in cost savings.
Effectively managing resources like water, energy and waste can drive an SME’s overheads down. For example, switching to energy-efficient lighting and implementing a company switch-off time can lead to significantly lower energy bills. You don’t always need to spend a lot of money to make money when you have smart sustainability initiatives in place.
How Can SMEs Achieve Sustainable Development Goals?
SDGs aren’t necessarily unreachable or too expensive for SMEs to achieve – there are many cost-effective strategies you can implement today as a business owner. Let’s look at certain SDGs and explore what you can do to easily achieve these goals now.
Goal 2: Zero Hunger
Creating a world where no one goes hungry or suffers from malnourishment is a prime example of how achieving SDGs means building a better future for everyone. However, this goal is often misunderstood as a “developing world’s problem”.
But hunger is a serious issue even in the UK — one of the most developed countries in the world. According to the Department for Work and Pensions, 14.5 million individuals were living in (relative) low income (22%) in 2019/20, 4.3 million of whom are children.
Moreover, in 2019, the Environmental Audit Committee found that food insecurity is significant and growing in the UK, with levels among the worst in Europe, proving that the path to zero hunger affects every nation.
It’s important to note that these statistics were gathered before the pandemic. There’s no doubt that the coronavirus health and financial crisis has further exacerbated these figures.
How Can SMEs Help?
There’s no easy way to eliminate hunger, but you can make small meaningful changes in your business to help steer the nation towards a more sustainable, fairer future.
- If you work in the hospitality, retail or food & beverage industry, consider what you can do with any surplus food instead of letting it go to waste. For example, you can sign up to Olio. Olio is a free-to-use app where you can share items with the community to ensure they don’t end up in landfill. This small, simple change can help countless people struggling to make ends meet.
- For SMEs in other industries, you can set up food bank drives at work and encourage employees to donate what they can — no matter how insignificant it may seem. You can also offer employees paid days off to volunteer in the community. These initiatives are becoming more popular and are also considered a huge bonus among Millennial and Gen Z workers.
Goal 3: Good Health & Well-being
Healthy living is essential to sustainable development. Today, we’re still battling a global health crisis like no other. COVID-19 is spreading suffering, financial woes and impacting the lives of billions around the globe.
However, before the crisis, strides were made in increasing life expectancy and reducing risks associated with child and maternal mortality. But, we’re a ways away from eradicating diseases and persistent health problems.
For example, stress is a widely accepted side effect of work nowadays. However, mounting stress can lead to an array of mental and physical illnesses such as anxiety, depression, migraines, insomnia and, over time, even heart disease.
How Can SMEs Help?
Every SME can work to improve the health of their employees — which isn’t only a bonus for them, but also means you benefit from a more productive, engaged staff:
- Give your employees the opportunity to take mental health days and promote awareness for mental health at work (through training, open conversations, etc.).
- Partner with local gyms and healthy eateries for staff discounts to promote a healthier and well-balanced lifestyle.
- Promote a healthy work-life balance by implementing flexible working or working from home policies. COVID-19 has proven that not everything requires a face-to-face meeting, with virtual meetings saving time and money on commuting.
(Prioritising your staff’s mental and physical well-being, not only ensures they are more productive and engaged, but improves employee retention.)
Goal 5: Gender Equality
Gender equality is a fundamental human right and key towards building a peaceful and sustainable world for everyone.
Globally, changes have been made to achieve gender equality: more girls are going to school, more women are holding positions of leadership, and laws are being reformed to make advances towards a fairer society.
Fewer girls are forced into early marriage, more women are serving in parliament and positions of leadership, and laws are being reformed to advance gender equality.
However, emerging data shows that the pandemic has sparked an alarming increase in violence against women and girls — particularly domestic violence. While this is a distressing development, there are steps SMEs can take to improve these women’s situations in their local community.
How Can SMEs Help?
- If your business operates in the retail or hospitality sectors, consider donating clothing, products and food to shelters housing women fleeing domestic violence. By keeping women shelters stocked up with supplies, more women can seek help and leave toxic home environments.
- It’s critical to raise awareness about violence against women and girls during the pandemic to eliminate any stigma and encourage those who may be suffering in silence to seek help.
- Support grassroots women’s rights organisations, particularly those that provide essential services to vulnerable populations. Consider a fundraising event or providing informative leaflets in your business for customers to bring the organisation into the spotlight.
- Closer to home, commit to fair recruitment practices and eradicate gender pay gaps to ensure your business is a fair, non-discriminatory place to work.
Goal 12: Responsible Consumption and Production
Consumption and production are what keeps the world’s economy growing. But, we continue to rely on the use of natural resources, which in turn has lasting, damaging effects on the planet.
Responsible consumption and production are about doing more — and better — with less. By increasing resource efficiency and promoting sustainability, we can decouple economic growth from environmental degradation to ensure future development and, ultimately, our survival.
Today, all over the world, we’re wasting resources like food and energy without even thinking about it. To highlight the scale of our waste, an estimated one-third of all food produced (i.e. 1.3 billion tonnes) ends up in bins or spoiling due to poor transportation practices.
How Can SMEs Help?
- Start small: change your lightbulbs. By switching to energy-efficient light bulbs, you save energy as well as money on your electricity bill every month.
- Implement an effective waste management plan by conducting an audit to see where money is being spent, what waste it relates to and what you can do to prevent it. For example, you may be able to cut down on paper waste by moving everything to the Cloud.
- Switch to sustainable packaging and products if you can. This can be as simple as limiting the use of single-use plastics (trading plastic straws for paper or metal ones). One small change can have a huge impact — the hardest part is taking the first step.
Goal 13: Climate Action
Carbon dioxide levels and greenhouse gases in the atmosphere rose to new records in 2019, driving climate change and the devastating effects that come with it.
Although the environment experienced a slowdown in the effects of global warming during the pandemic due to travel bans and lockdown, this respite is only temporary. Saving lives and protecting the environment from a climate crisis requires immediate action from everyone now.
Taking action to combat a global climate emergency can seem daunting, but there are small things you can do in your daily operations to reduce CO2 emissions.
How Can SMEs Help?
- Adopt a hybrid way of working, i.e., combine in-person and virtual work, to reduce CO2 emissions caused by unnecessary commuting.
- Not every industry can support remote working. In these situations, consider implementing a cycle to work scheme to incentivise greener methods of travel and reduce pollution.
- Experts suggest that switching to a more plant-based diet is the easiest way to take action against climate change. So, if you’re in the hospitality industry, why not offer more plant-based options on your menu to encourage a more sustainable diet? Alternatively, you can make an effort to buy from local farmers to avoid the environmental damage caused by large commercial farms.
(Taking action to combat a global climate emergency can seem daunting, but there are small things you can do in your daily operations to reduce CO2 emissions.)
Goal 17: Partnerships for the Goals
Achieving the SDGs is only possible with strong global partnerships and ongoing cooperation. Only by working together locally, regionally, nationally and internationally can we hope to create a prosperous, healthy future for everyone.
With COVID-19 sparking unprecedented recessions around the world, strong partnerships are needed now more than ever to ensure a smooth financial recovery and attainment of the SDGs.
How Can SMEs Help?
Consider following and/or partnering with:
- Local charities (particularly those that align with the Sustainable Development Goals)
- Food Made Good community, an initiative of the Sustainable Restaurant Association (SPA). Food Made Good aims to accelerate change in the hospitality industry towards a more environmentally restorative sector.
- Olio, a free sharing app to help you cut down on waste production.
- UN Global Compact Network, helping businesses make a positive impact and providing actionable advice on how businesses can contribute to achieving the SDGs.
- Unilever, which aims to make sustainability commonplace.
- Avieco, offering sustainability solutions to help businesses overcome any challenges and set realistic targets.
Saving the world won’t happen overnight. But you can start making simple changes in your business now to guarantee a brighter future for everyone — and you don’t need to do it alone.
How 365 Business Finance Can Help You
At 365 Business Finance, we offer a merchant cash advance product to small and medium-sized businesses across the United Kingdom as a direct financial provider.
If you’re considering making sustainable changes in your organisation, a merchant cash advance could give you the freedom you need to put your organisation on a sustainable path to success. A merchant cash advance is designed as a quick way for any business that accepts credit or debit cards to raise capital without the need for a bank loan or hefty overdraft.
365 Business Finance offers £5,000 to £200,000 in unsecured cash advances for UK SMEs with no APRs, hidden costs or fixed monthly payments, letting you focus on running your business.
Our merchant cash advance product can help give your business capital so that you’re in a prime position to achieve your sustainability targets and future-proof your business.
Contact us today to see how we could help your business reach its full potential.