Is ESG relevant for SMEs?
ESG (Environmental, Social and Governance) and Scopes 1, 2 and 3 are not terms in common usage for many SMEs. However, they should be.
Carbon saving matters!
A business can save money, highlight the integrity and sustainability of their brand, and gain critical advantage in winning contracts by reporting on their carbon saving and ESG progress.
So should small businesses be working on their ESG? Absolutely!
A carbon saving workshop for small businesses
Blue Patch’s Coffee, Cake and Carbon Saving, three-hour, interactive workshop, was held at the historic Art Workers’ Guild, London (March 14th 2024).
Business owners gathered with the Blue Patch team, trustees and volunteers for some lively learning and networking. How refreshing to hear conversation and laughter!
We wanted our workshop to be social and motivational with a ‘can do’ spirit.
Running a small business can be relentless; it involves multi-tasking from financial management to marketing, logistics to sourcing a reliable supply chain. Given this intensity, measuring and saving carbon can appear daunting, even excessive.
So with ESG not (yet) mandatory for (unlisted) SMEs, why bother?
It was lovely to meet other small business owners and find out how they were making their businesses more sustainable. We received really valuable advice from Blue Patch on sustainability.
Linda, Blue Patch business member
Blue Patch’s workshop was very insightful. It was great to hear about ESG and the impact it will have on businesses. It was also great to interact and learn from other attendees. The session was eye-opening and I would highly recommend it to others.
Kemi – entrepreneur
Understanding supply chains
Our keynote “The Surprising Connection Between Business, Cake and Carbon Emissions – or why Ingredients Matter” compared cake ingredients to a business’s supply chain.
The talk explained ESG and Scopes (categories for carbon auditing) and how they provide a great framework for small businesses to build an effective environmental strategy.
Take flour.
Flour first requires soil, seed, sun and water to grow and become a field of wheat; a chain of processes then turns the wheat to flour; it is then packaged and sent to market; a shop then sells it and the customer buys it and bakes a cake to be enjoyed at teatime. The story stretches before and after flour – that’s a supply chain!
We broke down ESG into manageable chunks and revealed how it trickles down to impact an SME.
Here we told the story of two furniture makers being considered for a dream contract to supply a hotel. The story illustrated how the maker who invested their time wisely in ESG became the winner simply because the hotel is obliged to report on ESG and, at the tendering stage, asked both makers for their ESG reports.
“You can’t improve what you don’t measure“
The spotlight on becoming a supply chain detective also involves measuring carbon emissions. To organise our usage data we apply Scope 1, 2 and 3 to our supply chains. The term Scope is used to categorise sources of carbon, and not a term many know. So we gave a brief explanation.
Decarbonisation is a golden opportunity for all businesses, from a kitchen table company to a multi-national corporation and no business should be denied the chance to join in.
This is the exactly the group that any small business who truly wants to improve and be accountable for the impact they have on our planet should be involved with. I found the morning informative, supportive and encouraging all at once!
Clare, Blue Patch business member
Group learning
We also wanted to give everyone a chance to discuss together ESG, carbon categories and climate-related anxieties.
Following the keynote and a Q&A, we hosted breakout groups:
- ‘Can Environmental, Social, and Governance be applied to a small business?‘ facilitated by Marcos Moret, Blue Patch trustee
- ‘Sharing Sustainability Anxieties’ facilitated By Margy Newens, team Blue Patch
- ‘Carbon Countdown – how to organise and measure our carbon footprint’ facilitated by Jane Langley, Blue Patch trustee
All kinds of questions came up from the groups. How about this one: you replace purchased electricity (scope 2) with solar panels on your factory roof, generating energy onsite. Does this become scope 1 or remain scope 2? Great question….
The ‘anxiety’ group heard about the challenges of Brexit and other geopolitical factors such as war, sustainable packaging, how to verify provenance and locating sustainable materials. The mountain of greenwash out there and being caught out due to making genuine mistakes was also of great concern.
The discussions concluded with the saying “don’t make the perfect the enemy of the good”, be transparent and try your best.
Two hours of intensive work passed in a flash and after Margy had rounded off the event, we thanked our patrons Naturesave and Thrive Renewables, leaving just enough time to polish off the remaining cake.
Given the lovely comments sprinkled through this blog, we are hoping to do more events. We hope we have helped everyone to step on the net zero pathway. It’s not exactly a piece of cake, or as Kermit says ‘it’s not easy being green‘ but when you work side-by-side it’s more fun!
This workshop was a great way to meet Blue Patch team members and discuss and share viewpoints on the current and future state of sustainability.
Hitesh, Blue Patch volunteer
The workshop was truly inspiring. Not only did I have the opportunity to connect with like-minded individuals passionate about sustainability, but I also gained valuable insights and knowledge which we will be considering for our business.
Tara, Blue Patch business member
The net zero challenge
The challenge for the nation’s small businesses to meet net zero 2050 is considerable. There are over 5 million SMEs in the UK and their carbon footprint, taken as a sector, is substantial.
According to the Carbon Trust, the average SME generates around 15 tonnes of CO2 annually, making up 44% of the UK’s total non-household emissions. However, a poll in 2021 by the O2 and the British Chamber of Commerce reported that only 1 in 10 SMEs was measuring carbon emissions – it’s tricky to get an accurate picture!
Blue Patch, as a charitable organisation, wants to help the UK meet this challenge.
Sustainable business community
There are plenty of online resources for SMEs looking to calculate their carbon footprints, but little in the way of community support. Because Blue Patch has created a community, we bring business owners together to share the net zero journey.
SMEs can do our ‘bite-sized’ programme LET’S DO NET ZERO and our workshops. We also welcome experts, from national organisations like the Carbon Trust to sustainability consultants, to join the Blue Patch directory.
The transcript of the keynote talk is available on the Blue Patch Members’ Hub.
The workshop was supported by Blue Patch patrons Naturesave and Thrive Renewables.
Photography by Alice and Anna from In The Right Light photography.
References:
UN Climate Change Net Zero coalition https://www.un.org/en/climatechange/net-zero-coalition
Business population estimates UK Gov. https://www.gov.uk/government/statistics/business-population-estimates-2023/business-population-estimates-for-the-uk-and-regions-2023-statistical-release
Would you like to join our sustainable business community?
Blue Patch members have access to our free programme LET’S DO NET ZERO, a launchpad for getting carbon auditing underway. We use the brilliant Compare Your Footprint carbon calculator which helps businesses of all sizes to categorise and measure carbon emissions.
