How do I Embed Sustainability into my Small Business?
Cesira Leigh - June 2021
Sustainability is a key driver for growth and success for the majority of small businesses in Australia according to new analysis by Australia Post and the Banksia Foundation.Translating this into tangible activities and prioritising those actions is often complex for time poor and resource stretched small business’s.
What is clear, is that many small businesses are motivated to operate responsibly to assist with; balancing their purpose and profit, responding to stakeholder expectations, and future proofing their operations. Furthermore, there is plenty of research suggesting that sustainability initiatives, such as those to reduce operational carbon footprint, can also help improve a business’s bottom line[1][2].
Sustainability is an approach to business that creates long-term value by taking into consideration how an organisation operates in the economic, social (including ethical) and ecological environment. So where do you start? While there are many activities that can make a difference in terms of sustainability outcomes for small business, there are some key requirements for embedding sustainability into business operations. If you follow this 4 step formula it can serve as a model for establishing and maintaining a sustainability program in small business:
· Align your corporate strategy and sustainability
· Conduct a sustainability assessment to establish a baseline for existing practices and provide a roadmap for future business activities.
· Engage with your stakeholders
· Measure outcomes, report and(consider) getting certification
Aligning Strategy
As a society it is clear that we have to adapt to the major disruptive environmental, social and digital revolution that is underway.For businesses, balancing purpose and profit in this environment requires thought and effort.There are many challenges impacting the potential for growth, things like; scarce natural resources, volatile financial markets, local buying power and availability of qualified talent. For businesses, having a sustainability focus creates opportunities for addressing those challenges head-on.
Sustainability demands a broad view of issues and impacts, as well as a working understanding of what a business does and how it does it. Embedding sustainability into a business’s strategy means joining the two together through a series of concrete steps.The first crucial step in this process is to identify clearly why and how sustainability matters to your business. Having a vision, mission and values provide the building blocks on which to reflect corporate culture and direction.
The challenge for businesses is to consider the links between sustainability impacts and business strategy and operations. In order to understand where sustainability efforts should be concentrated in a business, it is necessary to identify those issues that have the biggest impact (through assessment) and are most relevant to the business and to stakeholders (through engagement).
Assessment
Conducting an assessment is the best way to find opportunities to improve your social and environmental impact.A sound sustainability assessment can assist you to evaluate your existing business practices against established best practices. You will get some insight into where your business is already doing well and where opportunities for improvement exist.
A useful tool here is the materiality assessment, which can inform the priorities for the business. Materiality means identifying and understanding what issues are significant to a business, and its stakeholders, and prioritising them for action. With the use of a materiality assessment tool you can map out your ability to impact or influence issues that matter most to your business.Getting specific about the issues that matter most to your business allows you to converge on some key priorities – making tangible action more likely and realistic.As a result of your assessment, you should also be able to develop a roadmap, a clear and easy-to-follow sustainability action plan for your business.
Engage With Stakeholders
You may employ staff or not, either way, you have stakeholders to engage on your sustainability pathway. Stakeholders may include; Board, advisors, investors, shareholders. supply chain, local community or customers. To engage your stakeholders, consider following the following steps(where applicable) that may assist you in converging on key priorities and activities:
- Get buy-in from management, board or advisors. Without buy-in from this group, your sustainability efforts will be more difficult or may not succeed.
- Identify an (internal) sustainability champion. Assess your resourcing and engage someone with responsibility for making sure that things get done.
- Set up a green team. A green team consists of a group of employees who are engaged in advancing sustainability within the business. The benefit of having a green team is that you’ll make sure that everyone gets a voice in your business’s sustainability efforts.
- Engage with your supply chain. Through your materiality assessment process, recognise who, where and what is impacted by your activities. Speak to your key suppliers, producers, manufacturers etc, to get their input and buy-in to your business’s sustainability activities, goals and ambitions.
- Customers. 9/10 consumers want sustainable products[3] and they are also adopting a raft of different measures post Covid to shop and live more sustainably[4]. With this in mind, it makes sense to engage with your customers wherever possible to ensure you are meeting their expectations in terms of sustainability. As consumers favour companies that are engaging in sustainability actions, this can be a competitive advantage for your business. In that regards, it’s important from a strategic perspective that your branding also reflects your sustainability aspirations.
Measure Outcomes & Reporting
Whatever process you decide on for mapping out your priorities and actions, you will need to bring them together into a coordinated framework that incorporates outcomes measurement. This will involve; determining what you want to measure, identifying positive and negative (project) impacts, performing a materiality assessment if you haven’t already, developing metrics, surveying and undertaking data collection, and finally, reporting.
A sustainability report typically describes the non-financial aspects of a company’s activities including an assessment of its wider economic, environmental and social impacts. It does this through mapping the different ways a business engages or interacts with the economy, community and environment – through business practices, supply chains, and more.Reporting for your businesses can potentially improve risk management, foster responsible business practices and/or open up new market opportunities.
You may also join the movement of small businesses who have already done so and look to get certification and thus meet the standards of an independent, internationally recognised third-party certification for socially and environmentally responsible businesses.
Sustainability is a complex, large and rapidly evolving field. There are however a number of best practices that have emerged that can help you.The following are three examples of classic and well tested picks for reporting your sustainability progress and undertaking certification:
· GRI Sustainability Reporting Standards allow businesses to understand and communicate their impacts on critical issues such as climate change, human rights and labour relations.
· You could choose to utilise the B-Corp comprehensive blueprint for purposeful business. By getting certified as a B Corp, you’ll be able to benchmark your practices and join a growing community of businesses committed to doing good or;
· Consider mapping the UN’s Sustainable Development Goals (SDG’s) which encourages you to put sustainability front and centre of your business strategy and provides an excellent framework for embedding sustainability into operations.
The final reporting tip would be to ensure transparency and authenticity in communicating the activities your business is undertaking, including why and how sustainability is prioritised in your small business.
So that’s the framework to assist you in establishing a sustainability program and applying sustainability activities into your business.The four step process is flexible, it’s adaptable for various size companies and it can be applied regardless of where you are at with embedding sustainability practices in your business.
[1]https://www.smartcompany.com.au/business-advice/five-ways-sustainable-business/
[2]https://www.sms-plc.com/insights/blogs-news/75-of-businesses-enjoy-commercial-benefits-after-investing-in-green-technology/
[3]https://thefifthestate.com.au/home-and-lifestyle/consumers/ninety-per-cent-of-australian-consumers-want-sustainable-products/
[4]https://www2.deloitte.com/ch/en/pages/consumer-business/articles/shifting-sands-sustainable-consumer.html