DIRECTION | <strong>IoD</strong> NEWS www.iod.com/scotland Making a positive impact on the planet Participants look at a screen showing a world map with climate anomalies during the World Climate Change Conference at Le Bourge, France. When it comes to ESG, small businesses can make a big difference, says David Cox, Business Development at Rewired Earth Until recently, much of the pressure to become sustainable has fallen upon larger organisations. However, small businesses make up the greater part of the economy, and so it’s critical that they too are addressing global sustainability goals. Leaders already have enough on their plate with challenges like inflation, recession, and technological disruption to name just a few. We seldom have the resources in both talent and technology for a major investment aimed at addressing the environmental and social change needed to thrive in this modern market place. However, having a good sustainability strategy can improve reputation, create greater value, increase transparency, and navigate regulation. It can also be a growth engine and build resilience. In a survey by Rewired Earth, 78% of consumers agreed with the statement ‘If I could, I would only buy sustainable products’. This shows us that there is a huge appetite for sustainable products and practices, and not just from consumers. Data also shows that sustainability is a pivotal driver of employee engagement, and attracting and retaining talent. A sustainability strategy can also lead to improved operational efficiency. Larger businesses are being rightly held accountable for their supply chain transparency, but having a commitment to ESG is vital for any organisation operating as part of a supply chain. Renewable energy can reduce costs, while digitalisation can have a positive impact on the environment. Recycled materials can reduce wastage, and could lead to a new line of products. But implementing a sustainability strategy can seem like a cumbersome task – it doesn’t have to be. It should be simple and easy to execute. There are five steps to consider: n A purpose-driven business mission – focusing on people and planet. n A culture of sustainability led from the top. n A materiality assessment focusing on the greatest impact. n Operational transformation. n Reporting to stakeholders. First steps Begin by understanding what is important to your customers and their customers from a sustainability perspective. This will help focus on where “In a survey by Rewired Earth, 78% of consumers agreed with the statement ‘If I could, I would only buy sustainable products’. This shows us that there is a huge appetite for sustainable products and practices...” you can add the most value. Focus on one or two of the UN’s Sustainble Development Goals, rather than all 17 at once. Remember that doing something is better than nothing, and when it comes to reporting, hone in on one or two key data points, not several. Impact is about quality, not quantity. For example, if vehicles are important in your operations, implement a clean vehicle fleet management programme. Maybe your board can be more diverse. If your employees are below minimum wage, increase their compensation. Increase training. Offer employees ESG investments in their pension plans. Create a network of like-minded businesses which support each other. Build partnerships to grow your business. Sustainability itself can become an engine of growth through a like-minded ecosystem. Ask for help, if you need it. Financial institutions can provide special financing services. Industry associations can offer advice and expertise. Policy makers can provide targeted incentives to encourage higher performance. Small businesses are an economy’s major source of innovation and growth, but it’s the larger enterprises that get most of the attention. Investing in small businesses through both private and public sources remains one of the most underrated investments. Without small businesses a more sustainable and inclusive world simply remains beyond our reach. If you are a small business, the time to start developing your sustainability story is now. 14 JANUARY <strong>2024</strong>
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