Is sustainability worth it for SME’s?
Sustainability talk, and increasingly more sustainability walk, have become mainstream in large enterprises as a viable and highly profitable business strategy. Paying attention to the triple bottom line (people, planet, and profit) is also a great risk management strategy. If you need proof, simply look at the empirical research completed by Bob Willard over the past 12 years. Bob is an expert in the business case for sustainability and his research shows companies that integrate sustainability into their strategy grow their profits by 51% to 81% over a 3 to 5 year period. Those are some nice numbers.
But do those amazing results apply to SME’s? Can we afford to invest our limited time and resources to focus on people, planet, and profit? Should we care about sustainability if we do not face the same pressure and reputational risk that larger companies do? Is sustainability worth it for Small and Medium sized Enterprises?
The short answer is absolutely. Here are three reasons why:
1. Sustainability gives your company purpose, strengthens culture and increases productivity
If you are similar to ET Group, your biggest strength comes from your company culture and the dedication of your employees. But, how can sustainability help solidify your company’s purpose, create a stronger culture and keep your employees engaged?
By definition, a sustainability lens focuses companies to do what is best for the planet, people, and profit. Thus, it gives your company a reason to exist that people can believe in; a valuable purpose that is extremely motivating and engaging for employees. In fact, purpose is proven to be more effective at driving extraordinary performance than any external rewards (commissions, bonuses, etc.). I know this not just because of Daniel Pink’s incredible TED talk, but because I live it everyday at ET Group.
Engaged employees are highly productive because they believe in your company and what it stands for. They want to contribute to the well-being of the company and their colleagues, so they work extra hard to ensure success. Focusing on people, planet, and profit will help you strengthen your company’s purpose or it may even help you find a new one that resonates more with your employees and potential clients. A worthwhile purpose will:
- Attract quality employees
- Build a strong culture
- Deliver amazing results
2. Focusing on people, profit, and planet makes your company more resilient and better able to adapt to change
Businesses can only survive over the long term if they are creating value. Historically, value created by companies was measured exclusively in economic terms, but the definition is rapidly changing. True value is starting to be defined by financial, social, and environmental metrics, so SME’s have to consider their impact in each of these realms if they want to prevail over the long run.
Sustainability forces you to widen your lens to take into account impacts on people and the environment. This broader perspective makes you aware of potential risks and opportunities that may be coming down the pipe. For a great summary of business opportunities and risks tied to sustainability, read the executive summary of Expect the Unexpected: Building Business Value in a Changing World by KPMG.
As we know, natural resources will be increasingly constrained in the years to come. Supplies are limited in this finite planet, but the demands of our increasing population are not. Also, energy prices are rising and are expected to continue doing so, putting pressure on our margins. Finally, sustainability is increasingly becoming an important branding component that resonates with employees and some of our customers who value corporate social responsibility in the companies they do business with.
These trends impact us all, so it is imperative that SME’s start actively focusing on sustainability now if they want to be competitive in the future. An early focus in sustainability will give SME’s rewards like lower energy costs, reduced waste and more efficient transportation.
From experience, recycling e-Waste became a new source of revenue for ET Group and I know we will save a significant amount of money when we refresh our fleet with more fuel-efficient vehicles. I strongly believe that a commitment to sustainability will end up building long-lasting, beneficial relationships with quality customers and suppliers. All of these reasons positively impact the bottom line today and help mitigate future negative impacts.
3. Sustainability pushes SME’s to innovate so they can stay relevant with their customers
As sustainability gains momentum, consumers will demand more sustainable products and practices, so companies who produce and embrace them will benefit significantly. Furthermore, as more and more externalities are incorporated into accounting practices, only truly sustainable products and services will have a pricing advantage over regular products so sustainability-driven innovation is not just a benefit, it is a must.
In simple terms we will need to reinvent many of the products and solutions we offer today so we remain relevant to our customers. At the ET Group we find that incredibly exciting and a real privilege! We need to redesign our own industry to become more sustainable and we continuously need to offer better collaboration technology products and solutions that will ultimately help other industries transform for the better. For more information on this check out my blog post: The link between collaboration technologies and sustainability.
New products and solutions usually result in more sales, higher margins, and exciting work, which makes for a healthy working environment. Therefore, innovating should be seen as a great opportunity for leading SME’s out there.
SME’s should invest in sustainability now, before it hits them like a freight train from their blind side. I strongly believe SME’s are critical to make sustainability mainstream and that we have a huge opportunity to take a leadership role and make it happen. In an upcoming post I will provide my thoughts on how SME’s can strategically embark on the road towards sustainability, so I would love to get some input and real life experiences from our readers out there.
The journey towards sustainability is a challenging one, but we can make it fun and exciting if we work together. It is also our duty and responsibility as a business community to ensure that we can thrive for generations to come.
If you like this post please share it with your network and give us feedback in the comment section below! If you want to learn more about what we are doing at ET Group to start our journey towards sustainability, please let us know and we will be happy to share with you. We are on a journey and we have a long way to go, but we are committed to getting there.