When it comes to sustainability, small businesses often underestimate their potential to have a lasting positive impact on the world. They’re also often unsure of the financial cost of taking action to become more sustainable. This guest blog from carbon footprinting experts Cogo sets out to dispel the two most common myths in this space.
Myth: Small business; small impact
The climate crisis can seem like an issue too big to tackle individually; it’s easy to feel powerless against such an enormous global challenge. But, really it presents an important opportunity to build new habits and implement new ways of operating to have a more positive impact on the climate.
A few years ago, The Carbon Majors report found that a very small number of companies are responsible for a very large percentage of global emissions. Instead of galvanising action, the claim had the opposite effect with many of us asking: “Does what I do as an individual even make a difference?” – and small businesses might find themselves asking the same question.
Xero recently surveyed small business owners, accountants and bookkeepers across Australia, New Zealand, the US and UK about their feelings towards operating sustainably. It was found that although sustainability is firmly on the radar – with 66% of businesses reporting that they think it’s important to understand sustainability – some of this same group are held back by how effective it would be to take action around what they perceive to be a relatively minor carbon footprint.
Interestingly, many businesses weren’t aware that they even produce a carbon footprint, especially sole traders or those who work from home. Many people aren’t aware of the activities in their business that contribute to their carbon footprint, or that through small changes they can easily reduce it.
Fact: A ‘mighty mindset’ matters
Small businesses account for the vast majority of businesses globally, representing 99.8% of all companies in Australia (OECDiLibrary); 97% in NZ (MBIE); 99.2% in the UK (Gov.uk), and 99.7% in America (sba.gov).
Given the sheer number, the truth is that if all these small businesses made small changes, it could have a huge impact on our collective progress towards becoming a healthier planet.
It’s an ideal time for small businesses to cultivate a ‘mighty mindset’; one that believes that when it comes to change, none of us is as powerful as all of us and the collective impact of making small changes can be massive.
- Replace just one return flight a year by meeting virtually to save 219kg CO2e (equivalent to flying from Sydney to Melbourne) (source: Cogo Calculation).
- Make your next catering order for a team birthday or celebration a ‘no red meat’ meal to save 40% of the average CO2e for every dollar spent, compared to options that include meat (source: Cogo Calculation).
- Replace the next few milk orders for your workspace with a plant-based alternative to save 20kg CO2e on a 10 litre purchase (source: Josephpoore.com).
If 3 million small businesses did just these three things, we would save nearly 800 million kilograms of CO2 emissions per year, that’s equivalent to planting over 13 million trees.
Myth: Sustainability costs too much money
Although the value of a healthier planet is immeasurable, particularly for future generations, many small businesses are acutely aware of the need for a financial lens on investment; not only into a better future but also into a more profitable one.
In line with this, although 68% of the small businesses Xero surveyed consider it important to improve on sustainability within their business; there was hesitation around the cost of taking action. Many small business owners expressed that they know it’s the right thing to do, but were concerned about how it would affect their bottom line.
What’s more, 90% of small businesses surveyed do not track their carbon footprint, but 65% are interested in tracking it as long as it’s helpful and accurate. Tracking your carbon footprint can actually help you implement sustainable strategies that improve profitability, making it worth the investment.
Accountants and bookkeepers can tap into this opportunity to support small businesses too. While three quarters of accountants and bookkeepers surveyed don’t yet provide sustainability advisory services, 70% would like to expand their service offering.
Fact: Sustainability can help you attract money
Small businesses who choose to work with an accountant do so to help them make more informed decisions for the financial health of their business. Accountants and bookkeepers are interested in the numbers and they are results-focused, dealing in data, facts and insights. Thankfully, there’s substantial, quantifiable evidence around the business advantages of becoming more sustainable.
Small businesses that are sustainable can:
- Save money – Resources cost money, so reducing your energy and water consumption means spending less on bills.
- Attract more customers – 71% of consumers would pay more for brands that are sustainable; and 57% of consumers would change their shopping habits to reduce their environmental footprint (source: IBM), which presents a huge opportunity to attract more customers by becoming a more eco-friendly business.
- Attract more talent – 65% of employees say they’re more likely to work for sustainable businesses (source: Reuters).
- Differentiate – Showing that you care about your impact on the planet is a credible way to differentiate your business in the market and could give you a competitive edge.
- Become the preferred choice for investors – When choosing a brand, employees, investors and customers (including procurement teams) care a lot about the societal impact of businesses (source: Edelman Global Brand Report, 2019). It’s becoming easier for more sustainable businesses to access capital and investment.
- Future-proof – Climate disruption has cut global GDP by 1.6%, (source: DARA Group) and sustainability is a major concern for governments who will increasingly expect businesses to reduce their footprint.
We love this definition of the purpose of business coined by The British Academy – “...to produce profitable solutions to the problems of people and planet, and not to profit from producing problems for people or planet.”
We encourage small businesses to consider the power of their collective impact when it comes to sustainability. It’s good for the planet and for your business’ bottom line.
Stay tuned on Xero’s small business sustainability hub for more resources and tools to come as we explore how to make sustainability easier for small businesses.