In this guest blog, Simon Owen discusses the need for SMEs to embrace sustainability and low-carbon thinking in response to news that few are.
This recent article in The Independent is cause for concern.
While the headline is obvious, the text makes more remarkable reading. 99% of businesses in the UK are Small Medium Enterprises (SMEâ€™s) and the majority of those have a single Director and less than 50 employees (Department for Business Innovation and Skills survey, 2014).
In short, these business owners recognise the need for action, but havenâ€™t taken any. Why?
Ignorance is not a nice word, but the low carbon economy and resulting changes are coming. The shift from fossil fuels to cleaner energy, the focus on minimal greenhouse gas output coupled with need for resource efficiency, means that change is essential. You either volunteer to change or change will happen to you.
Companies changing now can gain a competitive and profitability advantage over their competitors, but many are obviously carrying on ‘business as usual’ while blaming falling turnover and profits on sharper competitors or key members of staff leaving, instead of being that sharper competitor.
For some the low carbon economy is too far in the future or is the government’s jobs to manage, while others believe it to be part of Corporate Social Responsibility, something many SMEs neither have a full understanding of or time to adopt without realising that it isnâ€™t that hard.
There are quick wins to acting now; energy and resource efficiency is low hanging fruit as it is easier to save money than generate revenue. For example, for every Â£1 Morrisons saves in energy costs, Â£27 less that needs to earned through the till to create the same level of profit (Chris Coath, CIBSE/WSCP Presentation, 2015). Not only that, input efficiency typically means less waste, or literally less money in the bin. The best bit is waste often incurs a disposal cost, something which is reduced having a further positive effect on profit.
The gains are in the long game; CSR will help you bid for work as details of your CSR policy and actions are often requested. Running a business with CSR at the core of operations creates a unique opportunity for branding both externally and internally. Consider Arup; recognised as being one of the best at what they do, they have a unique culture and a remarkably low staff turnover rate their competitors struggle to match. At the heart of that businesses is what as known as the â€œKey Speechâ€ given by Sir Ove Arup in 1970. In that he talked of sustainability in business long before the buzz word was coined. As another example, architecture is renowned as being a relatively low paying career choice considering the length of time required to complete the studies, yet people are queueing up to be Architects and Technologists; why? They talk of calling, art and passion.
With current generations being more socially and ethically aware and Generation Z expected to make CSR a business norm due to being more highly informed, the long term game is all about carbon. Being focused on sustainability, and able to demonstrate a history of doing so, will help you engage and attract these people as you provide a desirable choice; why will some people only buy organic and Fairtrade produce despite the price differential and in some cases, limited choice/availability?
In a climate where keeping customers, and staff for that matter, is hard, SMEs need to build relationships on a different level and in a different way to how they do at present. Greg Savage, a recruitment industry veteran of 38 years standing, describes competitors that donâ€™t change as â€œthe walking deadâ€.
Change may be hard and it may be scary but is the alternative less so? I think not.
See also:Â Change is good. Here’s why
Simon is a Director of Calibre Search, a Fellow of the Institute of Recruitment Professionals and Vice-Chairman of CIBSE Yorkshire. During his time working in recruitment he has developed a passion for engineering, sustainability and resource efficiency being convinced that there has to be a better way to do things than we are at present.
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