As the much anticipated 2023-24 National Budget was released, many had been waiting to see if and how the government would allocate funding to Environment, Governance & Social (ESG) solutions.
However, it is important to note that sustainable development is also the responsibility of small and medium enterprises (SMEs) because without the commitment of individuals and communities, real improvement or progress cannot be realised.
The Minister of Finance, Hon. Peggy Serame’s speech revealed a great opportunity for SMEs to fulfill the ESG agenda, particularly through development of the local supply chain. Sustainable development is a carefully planned strategy to embrace growth while using resources more efficiently. There are three main objectives of sustainable development that include economic growth, environmental protection and social inclusion; all principles that are just as equally important to the SME market as they are to multinational organisations or government bodies. In presenting the speech, the Minister spoke about the government’s commitment to growing the value chain by committing over P540 million to the key strategic sectors of tourism, minerals, energy, manufacturing, and agriculture.
These are the emerging opportunities that SMEs can tap into, as large corporations and public organisations will become more intentional in implementing inclusive and environmentally protective procurement policies. It is vital for SMEs to get ahead of this trend and establish strong sustainability credentials, not just to avoid the risk of losing business, but also to have access to the growing number of opportunities that a demonstrable sustainability commitment will bring.
As consumers become more sustainably conscious, it is not enough for an SME to operate in ways that will deter customers. Customers are no longer content with simply shopping for the cheapest product or service, they are becoming highly discerning in terms of where they are prepared to spend their money. And they are choosing businesses that demonstrate a sincere commitment to using their resources to build a better world.
What’s more, the immediacy of social media, and the growing impact its growing cohort of influencers has on markets, means a business that doesn’t live up to the sustainability commitment expectations of today’s consumers can quickly find itself out in the cold. Of course, the opposite is also true, which is why becoming sustainability minded, irrespective of what line of business you are in, just makes sound business sense.
Part of the misconception around implementing ESG solutions amongst SMEs is the perceived high cost. Unfortunately, the real cost of failing to integrate sustainability into their businesses is much higher than the relatively minor investment required to do so. What is really needed is a mindset shift. When you consider that your business can only be sustainable if your markets are as well, it becomes clear that sustainability is not a cost, it’s an investment. Without a resilient, inclusive, and self-sufficient society, businesses would quickly run out of customers. So, helping to build that resilient society should be at the heart of every business plan.
It’s not a cost centre, it’s a source of value – and every business needs to be tapping into it.
The sheer enormity of building a more sustainably conscious world involves everyone, with key focus on the SME market who are the foundation of a robust and innovative economy. SMEs need to act on the imperative to embrace the role they can, and must, play in sustainably transforming our planet and its people. It’s one of the most important investments a business can make today, and the returns are potentially endless.
