Last reviewed 24 March 2022

As the environmental credentials of all businesses are now a key differentiator for consumers, how can small enterprises improve their green credentials? Dave Howell reports.

The importance that consumers now place on the environmental credentials of the businesses they buy from has never been higher. Moreover, the pandemic shifted consumer demands for firms to do more to protect the environment.

Also, those enterprises that could illustrate the tangible changes they had made became destination brands. For small businesses, ESG (Environmental, Social and Governance) is also a critical component of how companies must operate post-pandemic to thrive.

Research from Capgemini concludes: “A significant majority of consumers (79%) are changing their purchase preferences based on sustainability. This contrasts sharply with the 36% of organisations who believe consumers are willing to make this change in their choices or preferences based on social or environmental impact. And 77% say their sustainability approaches increase customer loyalty and 63% have seen a revenue uptick. There is a significant opportunity to gain market share given this growing action or intention of consumers to switch based on sustainability.”

For the small business community delivering great products and services is today not enough. These innovations must be through the lens of environmental sustainability. Companies that can illustrate their commitment to a sustainable future will be their sectors’ leaders.

More than carbon zero

Becoming a “green” business isn’t as difficult or costly as it may seem. We spoke to several business owners and advisors to gain their insights into how small enterprises can become greener businesses in 2022.

David Chadwick, Carradice

“Look at your plastic usage, especially in packaging. A very easy win is to switch from standard polythene bags to biodegradable or compostable versions or ones made from a sustainable source. Bags made from sugar cane look exactly like polythene bags but are from a sustainable source and can be recycled in the normal way. The cost is usually very similar to standard plastic bags or a very small premium. They will have printed information on them so your customers will know you are taking responsible steps to reduce your plastic waste. They are increasingly available, ask your current supplier what they have.”

Marlene Greenhalgh, Ammique

“What are the fast and cost-effective environmental wins all small businesses can implement this year? In a word: Plan. In other words, businesses need to create a viable long-term plan with short term, cost-effective and attainable goals. They should ideally involve staff, suppliers, and customers to do so. This is especially true of small businesses that rely on a smaller pool of resources but benefit from closer interpersonal relationships and more direct communications.

“Irrespective of the culture of any small business, there needs to be an effective dialogue between everyone involved and a commitment to implement whatever actions are required to meet their agreed goals – stage by stage – with a very clear idea of where they are going. The development of these goals will ideally factor in the economic as well as the ethical and ecological costs (and benefits) resulting from more sustainable and circular business practices. Ready. Steady. Go!”

David Morel, CEO, Tiger Recruitment

“Introduce a green travel policy. To complement your employees’ greener commute, introduce a ‘green’ travel policy to cover all business journeys, whether to client meetings or events. Does that meeting need to happen in person, or could it be conducted via video call? And could I take a train to my destination rather than a flight? If flying is the only option, ask staff to use Google Flights to factor carbon emissions into their choice of flight.”

Scott Dodds, CEO, Ultima

“Appoint an ‘ESG head’ to drive your green agenda. This will give your company the drive and focus to hold it to account and ensure that you arrive at a specified target or deliver on objectives. Lead by example as a company and opt to go paperless, use eco-friendly cleaning products and provide employees with reusable items, including water bottles and lunchboxes. Ensure that your office maximises natural light and use energy-efficient lighting. Provision office-supplied equipment to automatically 'power off' after a certain amount of idle time.”

Erik Boyter, CEO, WindowMaster

“Small companies looking to decarbonise can start by reducing their scope 1 and 2 emissions, which tend to be easier to manage than scope 3. This refers to direct emissions, such as those from company vehicles, and indirect emissions, like those purchased electricity and heat.

“Begin by calculating these emissions, which can be facilitated by wide range of online tools specifically designed for this task. Then take steps to reduce them. This might be converting the company fleet to EVs and encouraging the use of public transportation. However, these both have associated scope 3 emissions which will need to be accounted for. Look into using renewable sources from green energy providers where possible to mitigate this impact.”

Paul Jones, MD, Morgan

“ISO14001 is a standard for implementing an effective environmental management system (EMS). Developed for businesses of all sizes, it offers a framework to improve resource and energy efficiency while reducing waste and cost. For some, it becomes an ineffectual box-ticking exercise. However, it has the potential to drive continuous improvement in your processes.

“For example, you might use the ‘Plan, Do, Check, Act’ cycle when help optimises and monitor the impact of any 'green' changes you make. Sustainability and LEAN principal objectives work hand in hand. If an organisation claims to take sustainability seriously, it must also be seen to have LEAN principles at its heart. If it doesn't, I would question their understanding of sustainability, which is, simply put: To provide goods or services demanded by the customer using only necessary resources.

“Importantly, this includes services. It’s a common misconception that LEAN only applies to manufacturing processes. However, it’s just as relevant to customer service departments. You can also improve your green credentials by considering sustainability in every part of the supply chain. Prioritise suppliers which offer recycled and recyclable products and packaging, and which can provide information about their carbon footprint – and the steps they’re taking to reduce it.”

Sonia Borawska, Content Marketing Specialist, Doctify

“About 50% of our technology team is cycling to work or using bicycles to get around instead of driving or using public transportation. Most of the work is done remotely, including virtual meetings and virtual summits. A globally distributed team flying people from place to place for meetings can burn thousands of litres of fuel. Nowadays, even the most efficient aircraft fuel consumption is usually around 30 to 40 litres per passenger per 1,000 kilometres. So, you can easily avoid burning 3-4 (!) barrels of aircraft fuel by choosing to have a virtual meeting instead.

“We are also continuously educating our team on all sustainability factors of computing. For example, one team member used 80% solar power to power personal computers for the entire month. While not always practical (cloudy and rainy days), this was an exciting example of what is possible if we only try.”

Smaller enterprises may believe that ESG is for larger enterprises when the reality is that all businesses — no matter their size — have a role to reduce their impact on the environment.

In their report, Shaping the Sustainable Organisation, Accenture concludes: “Our analysis shows that leadership teams that build sustainability into the DNA of their organisations are better able to deliver financial value and wider stakeholder impact. In fact, those with the most deeply embedded sustainability management practices outperform peers by 21% on both profitability and positive environmental and societal outcomes.”

That level of outperformance can't be ignored. Look closely at every aspect of your business and your more comprehensive supply chain to identify where environmental savings could be made. From business owners to every staff member, becoming a greener business must have everyone's input. Making these essential changes will ensure your business is coveted by growing numbers of paying customers.