03 Sep 2021
Sustainable business practices for SMEs

Sustainable business practices for SMEs

Sustainability is a hot topic at the moment. From buying local to reducing our carbon footprint, many of us are becoming increasingly conscious about the impact we’re having on our environment.

On an individual level, many of us are making small choices every day. From reusable coffee cups to choosing clothing brands that are ethically produced, every action we take makes a difference.

On a business level, a sustainable approach is quickly becoming an expectation.

Investors are increasingly looking at businesses that do things in the ‘right way’ and want their investment portfolios to align with their own moral compass. Employees are more conscious of working for a business that has a strong ‘why’ at its core and are looking to business leaders to help fix societal problems, while consumers look more favourably on brands that have a strong sustainability story.

“Customers are asking for it, stakeholders are asking for it, and investors are asking for it,” says Nicola Schroder, Head of Environment at QBE.

“As well as having a positive impact on the planet, however, there are a lot of savings benefits for SMEs to realise – and, in addition, some great opportunities to use sustainability practices as a lever to form strong relationships with the local community and the customer base.”

What are sustainable business practices?

Sustainable business practices can be defined across three pillars; environmental, social and economic/governance.

Environmental includes reducing energy waste, materials and water, and using ethically-sourced and sustainable packaging. This could include conducting an energy and water audit to identify waste, switching to more sustainable options in packaging and paper, and digitising processes to reduce paper waste.

Social revolves around treating employees correctly and ensuring the businesses you partner with do likewise. It also concerns diversity, as well as workplace health and safety. On a day-to-day level, this could include putting practices in place to support employees’ health and well-being, recruiting for diversity where possible, and ensuring other businesses you work with have the right things in place regarding how they treat employees – particularly around Modern Slavery and Human Trafficking.

From an economic/governance perspective, the focus for SMEs is on supporting local communities – through employment, working with local businesses, volunteering, support and philanthropy. This could include taking advantage of opportunities for local procurement, building relationships with and supporting the local community, and creating schemes through which employees can volunteer in the community.

The benefits of adopting sustainable business practices

There are many tangible benefits for businesses that adopt sustainable business practices.

By focusing on energy and water savings, businesses can see an immediate impact on power bills, while solar power, LED lighting and making more environmentally-friendly choices – for example, choosing hybrid vehicles – when it comes to transport, can all impact the bottom line.

Standing businessman and businesswoman talking in green office“It’s important for businesses to see the value of adopting more sustainable practices – making more sustainable choices such as this can have a direct impact on finances,” says Schroder.

Customers and employees are making decisions based on the sustainability of a business and telling a good sustainability story can also help attract talent, too.

“More and more, people want to work for a company they can feel proud of, and they feel is doing the right thing,” says Schroder.

“In graduate recruitment, for example, that question about sustainability practices always comes up now, and the reality is that businesses are increasingly needing to prove their sustainability credentials to attract top talent.”

In addition to potential savings, increased sales and attracting – and keeping – the top talent, a focus on sustainability can help a business prepare for the future, embed resilience and foster a culture of innovation that can be the foundation for future growth.

A sustainable outlook is focused on the medium to long term and encouraging this way of thinking within a business helps everyone involved anticipate opportunities and threats – after all, these are driven by environmental and societal factors.

How to start embedding sustainability practices

Of course, for many, this may all seem perfectly reasonable and desirable in a theoretical sense – however, the realities of making it happen on a day-to-day basis can make it a daunting prospect.

To begin a sustainability journey, Schroder’s advice is to start small and start with those things that will make a financial impact.

“Take one or two things that are achievable, and that will make a difference to the day-to-day,” she says. “For example, an energy audit could save the business a lot of money on quarterly bills.”

To keep the momentum going once the quick wins have been realised, it’s important to have people on board to advocate for sustainability initiatives and keep the conversation alive. This isn’t a one-off.

“If possible, embed sustainability into the business’s mission statement,” says Schroder. “A company’s ‘why’ is so important, and sustainability feeds into that.”

From there, assess the opportunities for making an impact in the business and set some targets – this will help keep the business accountable and also help you better understand the business’s footprint.

Learn more

If you’d like to learn more about how you can embed sustainability practices into your business – and help your customers do the same – you can watch our webinar ‘Sustainable business practices for SMEs’, and visit some of the following websites.

Information, grants, services and support are available through both State and Federal Governments.

Explore more of QBE’s valuable resources for brokers in our Q Academy, which is full of webinars and presentations.

The advice in this article is general in nature and has been prepared without taking into account your objectives, financial situation or needs. You must decide whether or not it is appropriate, in light of your own circumstances, to act on this advice.