Our great friends and partners, Heart of the City gave me and The Planet Mark the opportunity to share our first-hand experience of SMEs taking climate action with their board, trustees and members; including Andrew Bailey, Governor of the Bank of England and Lord Mayor Alderman William Russell.
You would be forgiven for thinking that, after all the challenges of 2020, that UK SMEs (small and medium-sized enterprises) might have their focus on survival and managing the effects of Covid-19 and Brexit, rather than on how to embrace sustainability and reduce their carbon emissions. I am sure for many that is true, however, in our experience, there are many SMEs deliberately seeking out how to improve their social and environmental impacts.
It is this message that I wanted to share at Heart of the City’s AGM as the audience is large, influential and, as they are generally larger organisations, they may not have this first-hand experience themselves. Whilst it is qualitative feedback, The Planet Mark can be a valuable barometer on sustainability for SMEs as so many of our 800+ certifications are companies of less than 250 employees.
This is also why we align with Heart of the City who help SMEs, largely in the City of London, to embrace the principles of responsible business. They provide an excellent two-year foundation programme to help SMEs be a force for good: embracing diversity, supporting their communities and minimising environmental impacts. Having completed the foundation programme, a number of those companies then join The Planet Mark to continue their journey. You can find out more here.
The partnership works well and we engage SMEs every day, helping them radically reduce their carbon emissions, their energy consumption, waste and resources, whilst also measuring their social value and shining a light on their significant contributions to society. Together, we help SMEs recognise that they are a force for good.
We are also raising the awareness of the business benefits of sustainability that are so significant for SMEs, even more so considering the challenges of 2020. As I explained in my presentation, SMEs can win business and retain great customer relationships by improving their sustainability. It demonstrates that they are delivering back to society and the planet, a trusted partner in a supply chain or a brand whose purpose and values align with their customers.
And SMEs have a significant role in this critical decade. We are in a 10-year period, from 2020 to 2030, that the UN has identified as the Decade of Action to tackle climate change, biodiversity loss and poverty. SMEs are the heart of our economy. Collective action drives change and accelerates innovation for our zero-carbon future.
Holders of The Planet Mark on average reduced the total carbon emissions of their business operations by over 12% last year. That is a phenomenal record, and it is pre-Covid-19. Furthermore, we have a 99%+ success rate in companies achieving The Planet Mark. As an annual certification that requires ongoing carbon reduction, it is a testimony to our community that you can achieve ongoing, relentless carbon reduction – which is what society and the planet needs – from all of us.
Our experience in 2020 is that SMEs who are generally, but not exclusively, outside of the sectors most adversely impacted by Covid-19 still recognise that carbon reduction and sustainability are critical factors to the success of their business. Here are four observations as to why that is:
1. SMEs see business value in sustainability
Sustainability and carbon reduction are high on board agendas, despite Covid-19 and Brexit. Perhaps, as many boards are now meeting more regularly due to Covid-19, there is greater scrutiny and emphasis on their sustainability as part of their agenda. Either way, it appears that most SMEs now recognise the benefits and are either taking their first steps or accelerating their programmes, very few are taking backward steps.
2. Customer/supply chain collaboration
Corporates and larger companies want to align on purpose, values, climate action and more. This is certainly impacting SMEs and is a significant driver through prequalification questionnaires, tenders and mechanisms such as supply chain charters. To maintain customer relationships and de-risk supply chains, SMEs are being required to take action and authenticate their work through credible certifications.
3. A culture of change
Citizens and employees want to play an active role in helping to reduce carbon. As we look around we see that a movement has now taken hold that is accelerating us towards a net zero carbon and sustainable future. Legislation, regulation and commitments are being made at international, national and local level. And these are being met from all levels of society. We have moved from awareness to action and in doing so people are demanding change, including in their place of work. Many are not willing to support, work for, or contribute to companies who do not meet their purpose and values.
4. Boards want to do better
There is CEO and board recognition that we must take action and demonstrably do good. Whilst all the above are very significant factors in decision making, there is something that is also extremely heartening and genuine, being the responsibility shown by CEOs and their boards. This is a moment where they can do the right thing, and they are grasping that opportunity despite, or perhaps because of, the uncertainty around them.
There is still much we must do to better engage business. We are actively engaging with organisations like Heart of the City and trade associations to support them and their members. Every day more organisations join The Planet Mark and programmes like ours. And we must be more ambitious in the work that we do as a collective, in particular targeting zero-carbon and our contributions to society and nature.
But we are clear in our work and in our partnership with Heart of the City that SMEs are taking climate action and they are a powerful force for good.