So, here’s the thing, I’ve always been an advocate of going green. At home, I recycle like crazy, follow my kids around the house turning lights off, shop local, drive an electric car and more. Even my university degree had a core of sustainability running through it! But how does that translate into running my own business? How important is that same agenda?
The honest answer is that in the early days of any start-up business launch, the reality is that the ESG (Environment, Social & Governance) agenda is likely to be less formal. That doesn’t mean it isn’t important, nor that it won’t be a core part of many businesses DNA. Rather, that in those early days the focus is on scaling, revenue and surviving! Over time, like lots of things in an SME business (that are policy based), the structure and priorities can start to shift over time, allowing you to focus on the things that matter.
Based on my experience over the last 10 years (running two fast growing SME businesses) is that ESG is gaining significant traction – particularly so in recent years – and that this isn’t only amongst large corporations but in the SME sector too. That means, and it pains me to say it, that even if you don’t think ESG is important to your business, it’s something that you can leverage to support your growth, enhance your competitiveness, and create long-term value. It also doesn’t need to cost the earth (no pun intended) and as I’ve personally seen, doesn’t have to be on a grand scale either – start small and go from there.
Here are some ways ESG and sustainability can benefit your business:
- Access to capital: Increasingly, investors and other financial institutions are considering ESG as one of their factors when searching for and making investment decisions. Those SME’s that are prioritising sustainability are more likely to attract funding, even from more traditional lenders. The commitment to ESG can help tap into a growing pool of funding specifically to support expansion and innovation in that area. Having completed 3 investment rounds, I can attest that ESG sits on our monthly Board agenda and is something that is regularly tracked and discussed!
- Enhancing reputation and customer loyalty: I know I do this! I actively seek out businesses that align with my values. Get caught out green-washing and that business goes on my banned list. And it’s no different for SME’s. Showcasing your commitment to the environment, being socially responsible and ethical, will foster customer (and brand) loyalty and differentiate you from your competitors. Here it can start small too – for example we support volunteering days, use a cloud-hosting partner that is 100% carbon neutral and work in a paperless office.
- Operational efficiency and cost savings: A classic, but true. By thinking about your energy consumption, minimising waste, recycling and reviewing your supply chain, you can not only reduce your environmental impact, but leverage operational cost efficiencies too – using less energy, producing less waste, using less resources!
- Access to talent and employee engagement: Every business wants to attract and retain the best talent, that goes without saying. Just like consumers, many employees now want to see businesses align with their values and to take ESG seriously. Failing to do so, will see them walk out the door (no matter how much you pay them). Plus, get it right and embracing sustainability can lead to higher employee satisfaction, productivity and that all important retention.
- Access to new markets and partnerships: By promoting those ESG credentials, SME’s can also open doors to new markets and partnerships. We’ve seen our focus on sustainability result in the development of a Collection of ESG eLearning courses – something I’ve wanted to do since we started the business – which we can now use internally, but also form the latest launch in our learning library product. We’ve also just secured an Innovate UK loan to further develop our sustainability offering in the education sector, supporting both awareness and the development of carbon action plans. Win, win!
- Regulatory compliance and risk management: Finally, the proactive step of adopting and integrating ESG practices can improve your compliance and reduce the risk of any potential penalties and/or reputational damage. Depending on the sector you work in, this could be higher up the list of benefits than a software and eLearning business!
Hopefully you can now see that even across these suggestions, the benefits are there and can act as a powerful force for growth for small, medium and scaling businesses. Whether it’s unlocking capital or talent, enhancing your brand or reputation, or improving your operational efficiency or risk profile, sustainability and the ESG agenda isn’t just good for the planet, it’s good for your business too – oh and turn that light off on the way out will you, it’s like Blackpool Illuminations around here!
Want to learn more about ESG?
If you're ready to do your bit and make the world a better place, check out our brand-new Environmental, Social & Governance (ESG) eLearning Collection!
Courses cover key topics, including energy efficiency, waste management, green technology and of course, corporate social responsibility. These, and other important topics can be easily accessed to help do your bit for your business and the world around.
Check out the collection today or download our FREE ESG Toolkit containing a range of resources to help you start creating a more considerate, sustainable and responsible workplace!
Tom Moore
Chief Operating Officer