9 Sustainability Solutions for Small and Medium Businesses

Going green isn't easy. But here are some ideas to help move you forward.

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Sustainability practices aside, small and medium-sized businesses (SMEs) face many challenges to remain viable in the competitive marketplace. The impacts of global climate change and the mounting public concerns for environmental sustainability, however, are further complicating the day-to-day operations of SMEs. Here are 10 key challenges and potential solutions towards sustainability best practices.

1. Sustainability Initiatives Pull SMEs in Different Directions

When SMEs try to incorporate sustainability into their core businesses, they find many sustainable initiatives do not align with their overall business goals. They face dilemmas such as whether to divert resources towards such goals as environmental certification or to allocate those funds towards promotional activities or operations to increase their profitability.

The benefits sustainability initiatives can seem nebulous, or positive only in the longer term. In the short run, businesses may find investment in sustainability initiatives to be less attractive regarding financial benefit. As a result, SMEs need to harmonize their social and environmental objectives with their business bottom line by understanding the advantages and impacts of different sustainability initiatives. In other words, SMEs need to find ways to translate their sustainability project objectives into real financial results.

2. Not Enough Money and Time to Invest in Sustainability

Achieving sustainability costs money and takes time, at least according to conventional thinking. A new economy of green providers, however, is rapidly changing the landscape, increasingly providing business owners with the opportunity to purchase or lease more environmentally friendly products and services instead of previous alternatives.

A perfect example is investing in energy efficient lighting which can decrease energy bills or purchasing power from an alternative energy provider.

The project management time required to manage sustainability initiatives can also pose a hurdle to adoption. When an SME does not have enough time to make the changes to become more sustainable, however, it can first focus on the easiest projects, or the low hanging fruit, such as sourcing more responsibly from a sustainability perspective. In this way, it can build momentum towards positive change. 

3. Unwillingness of Upper Management

Given the resource constraints often facing SMEs, upper management can be more focused on core business goals and quick financial results than sustainability projects. In a recent survey of 700 companies, around 65 percent of the respondents mentioned convincing upper management to stand behind sustainable practices as the biggest challenge. 

If an unwillingness of upper management is the largest challenge for your small or medium-sized business to achieve sustainability, you need to be very clear about the financial benefits that implementation of such projects would mean to your business, and effectively present your case.

Another tact is to look at smaller projects that make sense and successfully execute them to help win the confidence of management for larger initiatives.

4. Lack of Supportive Corporate Culture and Employee Engagement 

A non-supportive company culture can translate into poor employee engagement. Around 47 percent of the respondents of the already mentioned survey said that the task of engaging colleagues and staff was the most significant challenge for them in implementing sustainable practices. Employee engagement is improved in the same manner as changing a corporate culture — through management support, clearly defined objectives and reinforcement of supportive behaviors. Remember that behavior and culture are influenced by people and systems, and that reinforcement of behaviors can be intentional or inadvertent.

If your employees do not seem engaged, you might just be reinforcing the wrong behaviors. For example, efforts by employees to close overhead doors to prevent heat loss should be acknowledged, as should efforts to place materials in the correct recycling bin.

5. Lack of Support From Other Stakeholders in the Supply Chain

Most SMEs do business with many different parties. And there are cases when they find it too difficult to implement sustainable initiatives due to limited options from their vendors or other parties in the supply chain. If that is the case for your business, endeavor to choose a trading partner that shares your company’s values, or which has established a reputation or certification as a green provider. For example, reusable packaging systems that move between supply chain participants is an example of a cost-effective sustainability measure that can work well when supply chain participants cooperate.

6. Competing Against Greenwashing Claims

The SMEs making real sustainable efforts can face the challenge of greenwashing claims by competitors. Greenwashers are bad for real sustainable SMEs in two different ways; first, they may grab market share and secondly, they don't back up their claims by actually offering sustainably responsible goods and services. Attack greenwashing claims by becoming familiar with the legal limitations of sustainability claims, and working through your trade association. 

7. Customer Education About Sustainable Products and Services

Customers can be misled or confused by greenwashing claims. With this in mind, SMEs need to present the benefits of their sustainable products and services in front of their customers in an authentic way. Claiming to offer benefits that are not believable can just worsen the situation. Being honest and transparent, SMEs can overcome this challenge and develop a loyal customer base.

8. Lack of Succession and Continuity of Sustainability Initiatives

Many SMEs initiate sustainable practices into their businesses but fail to carry on the good work. This disruption may happen when the company is distracted by other projects or where the business goes through tough periods. Another important reason for the lack of continuity is the transfer of ownership or a change in leadership. Prevent a sustainability drain by incorporating it as a key ingredient of your offerings and processes, such as offering green products or relying on green methods that cut costs.

9. Inability to Keep Pace With Sustainability Trends

It can be hard for SMEs to keep pace with larger, better-funded companies when it comes to emerging sustainability best practices or regulatory compliance. Increasingly, however, technologies and services are being designed with scalability in mind, to more affordably meet the needs of smaller operators. For example, tracking technologies and transportation route optimization solutions that would previously have been only available to large players to help them minimize truck usage and fuel consumption are now available through cloud-based solutions to help SMEs. In a similar vein, smaller operators may collaborate informally or through industry collaboration to better support their efforts. One example is the Nature's Packaging program, a collaborative effort of several industry associations which helps promote the sustainability benefits of wood packaging and pallets to industrial buyers.

In the final analysis, small and medium-sized business owners should look at sustainability as an unnecessary business expense at their peril. If implemented effectively into an SME, sustainability initiatives can make business operations more efficient and competitive.