MSMEs are the Key to the Success of the Sustainable Development Goals

Article

2 Jun

Small Business… Big Impact… Why MSMEs are the Key to the Success of the Sustainable Development Goals by 2030.

When compared to large corporations, Micro, Small, and Medium-Sized Enterprises (MSMEs) may appear insignificant, but they have a significant impact on employment, economic growth, and sustainability. MSMEs outnumber large corporations in general, and they play a significant role in the global economy and job creation, particularly in developing countries.

According to World Bank data, MSMEs account for about a third of all businesses and 50% of the global Gross Domestic Product. Approximately there are 400 million MSMEs and they are the backbone of economies around the world. But how many of them have come on board and have referenced the SDGs (Sustainable Development Goals) in their corporate reporting, plans or strategies?

To put this into perspective, only 4 in 10 of the world's largest firms referenced the SDGs in their corporate reporting, according to a study by KPMG, but many smaller companies remain unsure of how they fit in.

An analysis by the Business and Sustainable Development Commission, indicates that achieving the SDGs could open up at least $12 trillion in new market opportunities and create 380 million new employment by 2030. The benefits would flow to both small and large firms, but this cannot be realized unless we all collaborate together. Small businesses can be part of the solution and help forge a future of equality and economic opportunity by connecting their fundamental purpose with the shared SDG agenda.

So, for a small business with limited resources or the ability to impact only a fraction of the program, is it worthwhile to adopt these and use them to communicate with customers, the general public, and peer groups?

The simple answer is yes, as some of the goals and what to do about implementing them can be cost effective and would demonstrate the following:

• Shows you're part of a broader global sustainable development initiative that's clearly recognizable and understandable around the world.

• Makes your approach more comprehensive - encourages you to consider what sustainability is and what the most important and relevant concerns are.

• Shows your consumers, clients, and the rest of the world that you care about the environment.

• It may also be compatible with MSMEs' sustainability strategy if they sell products and services to larger companies.

• The SDG methodology is versatile and flexible.

But there is the question why Sustainability is not engrained in MSMEs culture?

The reasons vary by country and sector:

• Lack of awareness among employees about the importance of Sustainability

• Lack of awareness of business owners of the benefits of Sustainability practices

• Not available access to affordable financial resources

• Inadequate and insufficient skills and management developed practices

• Lack of information how to implement Sustainability

• The interference of intended sustainability initiatives with other business initiatives

Without a doubt, MSMEs have the potential to become the backbone of both the domestic and global sustainability agendas. MSMEs must comprehend the new prospects and their significance in order to successfully integrate Sustainability concepts and practices into their corporate culture. In many cases, the Sustainable Development Goals' message and narrative may have not reached MSMEs directly, and in some cases MSMEs are often unaware of bold sustainability initiatives they have previously made, i.e., being made aware of the impact they have made in the Bigger Picture.

So how can we develop and implement our Sustainable Development strategies?

Well surprisingly, there are some amazing resources, and guidance provided by the ISO (International Standards Organization).

ISO has published more than 22 000 International Standards and related documents that represent globally recognized guidelines and frameworks based on international collaboration. Built around consensus, they provide a solid base on which innovation can thrive and are essential tools to help governments, industry and consumers contribute to the achievement of every one of the SDGs.

In addition, there are key guidelines to help MSMEs engage with key SDGs. For instance, when thinking about creating an EMS. Implementing an environmental management system (EMS) based on ISO 14001 might seem like a big task, but that doesn’t mean it is just for the bigger players in the market. Breaking it down into phases is the key. A newly revised guidance document just published helps businesses of all shapes and sizes put an EMS in place in the way that suits them – and reap the benefits every step of the way.

One of the overarching standards directed at helping businesses and organizations contribute to sustainable development is ISO 26000, Guidance on social responsibility. Developed with the consensus of more than 450 experts from 99 countries and 42 international liaison organizations, it is the repository of good practice and expertise from industry, government, labour organizations, non-governmental organizations and consumers.

ISO 26000 provides guidance on how businesses and organizations can operate in an ethical and transparent way that contributes to sustainable development while taking into account the expectations of stakeholders, applicable laws and international norms of behaviour.

How much an organization contributes to sustainable development and its impacts on society and the environment is known as “social responsibility” and is becoming a critical measure of performance.

MSMEs' main concerns are mainly cost and return on investment (return on investment). Another major issue is a scarcity of resources and time. As a result, it's critical to recognize that where carbon emissions are reduced, costs are reduced, and your existing employees will play a key part in integrating sustainability ideas into your organization. People value the determination in helping make the world, the environment, and society a better place.

Engaging with the Global Goals provides a clear way to differentiate your business, to stand out. Changing how you do business with sustainability can also provide a longer-term vision – you don’t have to think up one yourself.

How can we make the Sustainable Development Goals accessible to MSMEs?

Critically we have already explored the importance of communication and how it has a profound effect on corporate / company culture. Involving your employees in these discussions, to create engagement from the beginning is vital. One significant benefit is the size of your organization. The infrastructure of many MSMEs actually makes it easier to implement new principles, new ways of doing things, and to measure your impact, so much so, that you will actually see results quicker than in larger corporate organizations and blue-chip companies.

It might be overwhelming considering the scale and scope of the Sustainable Development Goals. After all there are 17 Goals, and perhaps as an MSME you might not have the business model that can support and engage all of them.

Even more daunting is the prospect, that when you are introduced to them in greater detail, the realization that there is a total of 169 Targets, might make the prospect of restructuring or strategizing an unenviable task.

Thankfully help is at hand. At Hudson we can engage with your organization and assess your business model, your infrastructure, and your existing impact with the Sustainable Development Goals. Following this we can provide, recommendation, guidance and implementation strategies which are the most cost effective, depending on the size and scale of your business or organization. Companies can follow our six actions to optimize their contribution to the SDGs. Depending on their position, they can ensure that sustainability is a result of their core business strategy, and companies can use the six steps to define or re-align their course.