With environmental considerations taking centre stage, small businesses are increasing their efforts … [+]
Whilst global headlines are dominated by the landmark COP26, small businesses, especially retailers who have long and complex supply chains, are adapting work practices and putting in place measures to meet ‘green’ targets but also to become more aligned with their customers’ wants and demands on sustainability, particularly their younger – millennial – audience.
The move towards sustainability is not without its challenges. A recent survey by Software Advice of over 500 supply chain professionals working at companies with 500 or fewer employees aimed to examine the benefits and challenges they’re facing on their sustainability journey.
The challenges around becoming more sustainable was also the focus of research from The Institute of Marketing in the UK, which recently surveyed over 200 marketing professionals in the UK, revealing that half (49%) are weary of working on sustainability campaigns due to the fear of being accused of ‘greenwashing’.
Environmental Sustainability
In looking at the sustainability measures being taken by small businesses, investment in environmental sustainability was the most popular measure.
86% of respondents in the research by Software Advice had some type of supply chain sustainability effort in place at their business before the pandemic, with environmental sustainability being the most common type. With no sign of these efforts wavering – 99% of businesses surveyed plan to keep or increase their environmental sustainability efforts even after the pandemic ends – businesses must be mindful of the ‘Green-washing’ trap.
This sustainability measure is the go to for businesses – arguably it’s easier than other measures to deploy throughout a business and of course becoming essential for any business’s reputation.
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The Institute of Marketing in the UK also recently published research, which looked at the views of 2,000 UK consumers, they found that 63% believe that many brands only get involved with sustainability for commercial reasons, as opposed to ethical reasons.
As always being clear and authentic about any sustainable practices is vital for small businesses credibility in this area.
Social Sustainability
Social sustainability within supply chains is gaining traction in retail but there’s still a way to go. Modern slavery, child labour, conflict minerals are all aspects of sustainability that businesses need to consider.
Software Advice’s survey found that “before the pandemic, 60% of respondents invested in social sustainability practices, and in the past 18 months, 42% have increased these measures.”
And, as with environmental sustainability efforts, almost 99% plan to maintain or increase their social sustainability practices after the pandemic—only four respondents say they plan to eliminate current efforts.
Economic Sustainability
Economic sustainability lags in popularity, possibly because it’s very much about long-term thinking – ultimately creating long-term economic growth that doesn’t have a negative social, environmental, or cultural impact on the community.
Software Advice’s survey found that “before the pandemic, 49% of respondents invested in economic sustainability efforts, and in the past 18 months, 24% have increased their efforts”.
These again are long-term investments, as only 2% plan to decrease their efforts once the pandemic subsides.
Cost saving and better brand reputation, echoing The Institute of Marketing’s findings about reputation – were the top benefits. However that is slightly contradictory as cost is also the major block for businesses putting in new systems or measures to improve sustainability. Once businesses have paid the initial outlay for the changes the common result is a cost saving over time.
The major gains and advances in software have made it easier for businesses to improve their supply chain’s sustainability credentials. Software Advice’s survey results show that 83% of SMBs use software to support their sustainability efforts.
Despite a rollercoaster 18 months, Small to Midsize Businesses have increased environmental, social and economic sustainability measures during the pandemic. The top three reported benefits of their sustainability efforts were cost savings, a positive change in brand reputation, and increased internal morale.
The real challenge here lies in effectively communicating these efforts to a consumer that is increasingly sceptical about businesses’ efforts, as the Institute of Marketing’s research highlights.
With fears of greenwashing on many marketer’s minds, the only way forward is through being as transparent as possible about their environmental initiatives, to win the customer’s trust.
