Environment minister

7 March 2008

Media reporting of global warming and climate change is usually accompanied by pictures of enormous belching factories and giant brightly-lit offices, so we could be forgiven for thinking that small businesses can’t make any meaningful contribution to saving the planet. But with more than 90% of the UK’s businesses classed as small and medium sized enterprises (SMEs), the reality is somewhat different. In fact, recent studies reveal that SMEs are leading the way in many areas of CSR (Corporate and Social Responsibility), and especially in minimising the impact of their businesses on the environment.

According to research by Eclipse Internet, more than 85% of UK SMEs will add green issues to their business strategy within the next five years. While most firms – both large and small – are recycling and reducing office waste, SMEs are doing more. The Federation of Small Businesses, which represents the interests of SMEs, recently published a report entitled ‘Social and Environmental Responsibility and the Small Business Owner’. Among its findings, the report claims that 41% of small businesses buy products or services that are environmentally friendlier, and that 25% of SMEs have already changed their core product or service offering to be more environmentally friendly. This is good news in its own right – but perhaps even better is the motivation for these measures. The personal beliefs of business owners play a large part, but it seems almost 80% of them also believe that it’s good business practice to be green. Certainly, neither peer pressure nor government pressure are cited as reasons to go green – both are shown as small motivating factors.

However, as the report points out, the outlook is not entirely rosy. Three of the biggest factors which prevent SMEs from going green are cost, lack of time and bureaucracy, with cost the biggest issue for almost 50% of business owners. Although there’s plenty of advice out there, often the problem is knowing where to get started – and it’s here that networking with other companies from the same industry sector can help (see 'Greening London').

On the broader front of CSR, the FSB report illustrates again that SMEs are at the vanguard of thinking - 92% of those surveyed think that CSR is responsible or normal business practice. This contrasts sharply with standard practice in large companies. Archive specialist Plasmon reported recently that only 34% of large company IT managers have an objective to reduce power consumption, and only 26% of the same group expected to be set an objective to do so. It may be that someone else in the organisation is responsible for paying their energy bills, but even so, the finding does reveal a surprising lack of joined-up thinking.; smaller businesses as these studies show, who don’t have the luxury of passing the buck, are just getting on with it.

By George Fletcher, Webster Buchanan Research