In today’s rapidly evolving world, sustainability is no longer just a buzzword, it’s a business imperative. From shifting consumer expectations to regulatory pressures and the undeniable realities of climate change, small and medium sized enterprises (SMEs) are being called to act responsibly not just for the planet, but for their long-term viability.
What is sustainability in business?
Sustainability in business refers to integrating social, environmental, and economic considerations into core business practices to ensure long-term value creation for both the company and society. It's about balancing economic needs with environmental protection and social responsibility.
Why sustainability matters for SMEs?
1. Consumer demandToday's consumers are more informed and more values-driven. They are increasingly choosing to support brands that reflect their concerns for the environment and social justice. SMEs that prioritise sustainability build stronger customer loyalty and brand trust.
Additionally, for B2B companies that may be part of large company supply chains, providing sustainability information can be a matter of having or not having business opportunities.
2. Investor expectations
Sustainability is also becoming central to investor decision-making. ESG-focused funds have surged in recent years, and investors are keenly aware that large and small companies with sustainable practices are better positioned to manage long-term risks and opportunities.
3. Regulatory compliance
Governments around the world are tightening environmental regulations. Companies that get ahead of the curve not only avoid fines and sanctions but can also benefit from tax incentives and other policy advantages.
4. Operational efficiency
Sustainable practices often lead to improved efficiency. Reducing waste, conserving energy, and optimising supply chains not only benefit the environment, they also reduce costs. For example, switching to renewable energy sources or digitising paper-heavy processes can result in significant savings over time.
5. Risk management
Climate change, resource scarcity, and social unrest pose real risks to business operations. Incorporating sustainability into strategic planning helps SMEs anticipate and mitigate these challenges, building greater resilience.
6. Talent attraction and retention
Employees want to work for companies that reflect their values. A strong sustainability record can help attract and retain top talent, foster employee engagement, and enhance company culture.
Real-world examples of SMEs that have successfully integrated sustainable practices into their operations:
1. Pela Case (Canada): Eco-Friendly Phone AccessoriesIndustry
Consumer Electronics Accessories
Sustainability Focus
Pela creates compostable phone cases and accessories made from plant-based materials.
Impact
They've prevented the use of hundreds of thousands of plastic cases, reducing plastic waste. Their entire supply chain emphasises low-impact materials and carbon-neutral shipping.
Key Practice
Circular economy design: products are designed to return safely to the environment.
Industry
Food Tech
Sustainability Focus
Helps businesses sell surplus food to consumers at discounted rates through an app, reducing food waste.
Impact
Operates in 17+ countries and has saved over 100 million meals from being wasted.
Key Practice
Tackling sustainability via tech innovation and consumer behavior change.
Industry
Apparel
Sustainability Focus
Designs durable outdoor clothing using sustainable and recycled materials, with transparent supply chains.
Impact
Certified B Corporation, uses organic and low-impact materials, and offers repair services to extend product life.
Key Practice
Lifecycle thinking: from sourcing to repair and recycling.
These SMEs show that sustainability isn't limited to large corporations and can be a driver of innovation, brand strength, and customer loyalty.
Looking ahead
Sustainability is no longer optional, it’s essential. As global challenges intensify, small and medium-sized enterprises (SMEs) that integrate sustainable thinking into their core strategies will be better equipped to thrive.
It’s not just about doing what’s right; it’s about building businesses that last.
EU reporting initiative for SMEs
The voluntary sustainability reporting standard for non-listed micro, small and medium enterprises (VSME) is a simplified framework for SMEs to report on ESG issues.
The VSME addresses the market need for a straightforward reporting solution for SMEs to efficiently manage increasing sustainability data requests from business counterparties (i.e. banks, investors or larger companies for which non-listed SMEs are suppliers) and to support their transition to a sustainable economy.
Want to know more about this EU sustainability reporting standard for SMEs?
Free VSME introductory course
Start learning about VSME reporting today with our free 1-hour introductory course
here.
