A quarter of small and medium sized enterprises (SMEs) in Britain are heading into 2014 with sustainability among their top three priorities for the coming year. The response reflects an understanding of the important role sustainability can play and renewed confidence.
Over half of SMEs polled for the research by Lloyds Bank Commercial Banking recognised the cost benefits of implementing sustainable business practices, with some stating they have already seen improved profitability as a result.
Other benefits cited by respondents for implementing sustainable business practices included making a positive contribution to the environment (42%), becoming a more attractive employer (27%) and having a positive impact on communities (26%).
Despite considering sustainability to be important, many small businesses were found to be focusing on traditional sustainable business practices, such as environmental activities and energy efficiency. SMEs are less likely to offer a clear business code of conduct, work responsibly within a supply chain, operate an ethical sourcing policy or work with local charities.
Stephen Pegge, external relations director of Lloyds Banking Group, said, “Businesses clearly see the benefits of sustainability, and they are carrying out their environmental responsibilities through recycling and being energy efficient.
“But for SMEs, sustainability also means interacting with charities, social enterprises and the community in which they operate; working responsibility within their supply chain and engaging with the next generation, through, for example, apprenticeship schemes.”
Understanding the benefits of becoming a sustainable business means that over the next five years a third of SMEs expect to increase their investment in the area. Currently, 78% of small businesses say their level of investment in sustainability is less than 5% of the company’s turnover.
Increased investment can also be linked to the perceived risks of overlooking sustainability. Nearly nine out of 10 said ignoring sustainability could harm their business by impacting on profits, brand perception, their competitive edge and other business areas.
Separate research recently found that the timing of adopting sustainability policies was important. The first business to begin using corporate social responsibility practices gets a larger share of the market, leaving less for competitors.