Sustainability in business – goals affected by rising costs
5-minute read
Sustainability is a growing concern for many – and small business owners are no exception. With research from Simply Business showing that sustainability is a priority for almost four in five small business owners, there’s no better time to focus on sustainability in business.
But despite this, only 13 per cent are achieving their green goals. Keep reading to find out more about sustainability in small business sectors and how you can implement more eco-friendly goals.
What is sustainability in business?
In general, sustainability means to maintain something at a certain level – but nowadays, it’s most often used to refer to the environment. In your personal life, this can include anything from being conscious about your energy usage to getting your morning coffee in a reusable cup.
But there are also plenty of ways sustainability is used in business – all with the goal of making sure your business practices don’t negatively affect the environment. This can be everything from the type of vehicle you use at work to your approach to recycling.
Sustainability goals – costs of sustainability
While sustainability is becoming more and more prominent in our lives (both personally and professionally), businesses are struggling. Despite the UK government committing to achieving net zero by 2050, many of the UK’s 5.5 million small businesses cannot front the financial cost of sustainability.
Our SME Insights Report, where we surveyed over 1,000 UK small business owners, found over half (57 per cent) of small businesses believe that the financial costs affect their sustainability efforts. Meaning that these environmental goals are often forgotten in favour of keeping costs affordable for customers.
Despite this, many small businesses still believe in the importance of sustainability. Sarah Jordan, owner and founder of sustainable clothing brand Y.O.U underwear, says: “To be honest, it's tough being a small, sustainable business.
“As a starting point, costs are so much higher across everything you do. Whether it's sourcing sustainably and ensuring full transparency through your supply chain, paying living wages, or supporting charities as part of your business model (or all of those), each has a very real impact on margins and therefore profitability.
“It often doesn't feel like a level playing field and with customers feeling the pressure at the moment too, as well as frequently having expectations around price, it's certainly a tough space to be in. It is, however, also a very motivating one when we get great feedback from customers and see the difference we're making.”
Keep reading to see how you can implement more sustainability goals in your business whilst managing these rising costs.
Why is sustainability important in business?
The benefits of sustainability in business are the same as in our personal lives. Environmental issues such as global warming, food waste, and plastic pollution are causing irreparable damage to our planet. Making the switch to more sustainable business practices can help combat some of these issues.
However, it’s not just the environmental impacts that make switching to more sustainable methods important for businesses. Nowadays, more customers are viewing sustainable and eco-friendly practices as a key selling point when choosing a business.
A study by Deloitte shows that 40 per cent of customers have ‘chosen brands that have environmentally sustainable practices/values’.
However, it’s important to be transparent, as ‘greenwashing’ is a common term used when businesses pretend to be more environmentally friendly than they are in order to attract customers. If you hope to use your business sustainability goals as part of your brand, you’ll need to truly believe in what you do.
How to improve sustainability in business
How you can improve sustainability in your business will depend on your industry and type of work. But to help you get started, here are some common ways you can help make your business more eco-friendly.
Embrace electric and hybrid vehicles
Not only do hybrid and electric vehicles have environmental benefits, but they also can have lower running costs than petrol and diesel vehicles. According to EDF Energy, one electric car can save approximately 1.5 million grams of CO2, while charging an electric vehicle is often cheaper than a full tank of fuel – benefiting both your wallet and the environment.
There are even government incentives for businesses to switch to less polluting vehicles, such as the ULEZ scrappage scheme. Electric vehicle owners are also exempt from:
- vehicle excise duty (until 2025)
- van benefit charge
- fuel benefit charge
- fuel duty
You can learn more about the advantages of electric cars and vans in our guide.
Reduce waste
Almost all businesses will produce some form of waste and there are plenty of ways you can cut down. One way to help cut down on unnecessary waste is to set up a proper recycling system – though it’s important to check the specific recycling guidelines in your area.
The government is already making plans for a Deposit Return Scheme for bottles and cans, so this is a good chance to get ahead.
You can also look at ways to reduce waste entirely, such as switching to digital files rather than paper. Find out more ways you can reduce waste in your small business here.
Switch to sustainable packaging
The UK government is trying to discourage the use of single use plastics (with the plastic packaging tax supporting these efforts). By switching to more sustainable packaging, not only does sustainability reduce business costs – but also your carbon footprint.
The use of sustainable packaging can also be a major selling point for your business – as some customers may choose to buy from you for that reason. If you’re interested in making the switch, check out the best sustainable packaging materials for small businesses here.
Sustainability action plan
If sustainability is important to your business and you’re looking to make a change, a sustainability action plan could help you to achieve your goals. There’s not one set way to create a sustainability action plan but we’ve listed a few things to think about to help you get started.
1. Review your current sustainability measures
Take a look at your current sustainability practices and assess them. This could be anything from how much energy you use in your offices to how strict your team is with recycling.
There are carbon footprint calculators available online to help you identify the areas where you might need to make changes.
2. Make attainable goals
The next part of any sustainability action plan is to set yourself some attainable goals. Using the information you’ve gathered, create a list of the areas you want to make changes in.
Much like any business plan, it might help to write these goals in the SMART format:
- Specific
- Measurable
- Achievable
- Relevant
- Timely
An example goal using this method could be something like “I want my drivers to be spending 30 per cent less on non-renewable fuel for deliveries within three years.”
3. Plan your actions
Now that you’ve identified your main areas of improvement, you need to figure out how you’ll get there.
Using the above example of spending less on less fuel, you would then know that your business sustainability goal for the next three years is to switch to using hybrid vehicles. And when it’s next time to upgrade your vehicles, you’ll be more prepared to make the switch to hybrid (and may have accounted for this in your budget).
What is ESG (environmental, social, and governance)?
Aside from environmental benefits and potentially improving customer opinion of your brand, another benefit of working towards your sustainability goals is developing your ESG – also known as environmental, social, and governance.
These are factors which measure a business’s effect on the environment and on society – but ESG is also a consideration when looking for investors. Investors will look at your ESG standards, as your approach to these factors often relate to your business costs.
An environmentally conscious company may inadvertently have lower energy costs than one which uses energy more liberally.
A company with a good social environment may have a lower staff turnover.
And a business which adheres to governance may be less likely to face fines or other unexpected costs.
All of these things make a company attractive in the eyes of an investor. You can learn more about finding investors for your small business here.
What are your business sustainability goals? Let us know in the comments below.
More guides on running a sustainable business
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Written by
Rosanna Parrish
Rosanna Parrish is a Copywriter at Simply Business, specialising in legal and HR content. Trained at London College of Communication, she has been creating content professionally for eight years at publications across the UK and Spain. Starting her career in health insurance, she also worked in education marketing before returning to the insurance world. Rosanna also writes about wellbeing in the workplace. She lives by the sea and does her best writing in coffee shops.
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
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