Connecting SMEs for a green economy

SME sustainability interest booming in South Africa

Chris Hopkins's picture

Small businesses around the world are increasingly realising the significance of greening and environmental sustainability for creating successful business models, with South African SMEs the latest to catch on.

Early findings from South Africa’s SME Survey 2015, due out later this year, shows sharply increased interest in greening and sustainability amongst small businesses.

Arthur Goldstuck, MD of World Wide Worx and principal researcher for SME Survey, the last time SMEs were asked by the survey whether sustainability was important to their businesses, the responses were extremely non-committal.

"Around nine years ago, the Survey asked SMEs how important environmental sustainability was to them. The responses were so disinterested that we were unable to even provide a measurement in proportional terms. This indicated that, at that time, SMEs felt they had many concerns more important than green issues," says Goldstuck.

"In the past, then, SMEs obviously viewed sustainability as more of a nice-to-have, rather than a necessity. However, since then, things have changed somewhat. This year, when asked whether green issues were important and whether they believed their businesses must operate in a sustainable fashion, an overwhelming majority said yes," he continued.

In 2015, a total of 86% of SMEs either agreed or strongly agreed on the importance of sustainability (12% disagreed).

"This indicates a massive swing towards environmentally friendly approaches and is very encouraging news, coming from this sector. It demonstrates a growing awareness from SMEs of the fact that they do not live in a bubble. These entities are clearly beginning to consider the bigger picture and understand that their organisations need to play a part in driving environmental sustainability," said Goldstuck.

Ethel Nyembe, Head of Small Enterprise at Standard Bank – a sponsor of the SME Survey – says, "It is encouraging to see quite a number of SMEs being open-minded about adopting sustainable practices into their business operations. Now that SMEs understand the importance of sustainability and environmental responsibility, more needs to be done to help them incorporate these sustainable practices into their core business processes, regardless of their sector."

"Furthermore, implementing sustainable business practices will give SMEs competitive advantages when dealing with larger corporates which now prefer suppliers that complement their sustainability objectives," commented Ms Nyembe.

Part of the reason is South Africa’s B-BBEE scorecard legislation having the unexpected knock-on effect of driving businesses to become more aware of their responsibilities to the environment, says Goldstuck.

"The B-BBEE legislation has forced many companies to look at their activities from a much broader perspective, and to think about the role and responsibilities of the business within their community and environment. They are realising that they can no longer just be in it for themselves.”

"Associated with this, there is also a much greater awareness among SMEs of climate change and its environmental impact. SMEs are becoming more conscious of their place in the world and are realising that, even if their own role in the larger sustainability picture is a tiny one, it remains important."

For more information, please visit the South Africa SME Survey website, here.