Advice for SMEs: Engaging stakeholders to enhance sustainability and manage risks
Recognising that you have limited resources to wade through the increasing volume of guidance around sustainability and decipher the key points relevant to you, we asked members of the ICAS Sustainability Committee to provide one piece of advice they would give to an SME on the topic of sustainability:
Carol Adams:
Talk to your key stakeholders and ask what they think are your key impacts on them, other people, communities, the economy and the environment. This might include your staff, customers, clients, local people and communities. Then prioritise these impacts and consider how you might measure them so that you can track and manage them. The GRI Standards are a useful resource. Then you might consider whether any of these impacts pose a risk to your business or business model.
Dave Marshall:
To start I would direct a small business to easy practical guides. I have a lovely little CIMA/Forum for the Future book that has stood me in good stead. It sets out in plain language how to account for environmental impacts using energy, transport data etc. I am hoping that the upcoming ‘Starter Guide to Nature for Accountants’ due for release by the Global Accounting Alliance (GAA) in March 2025 will also be a useful resource.
David Wilson:
I would advise leaders in small and medium enterprises (SMEs) to firstly consider the aspects of sustainability that have greatest relevance to your business. If you need some inspiration, the UN Sustainable Development Goals is a great framework for thinking about different aspects of sustainability.
As a further step, I suggest evaluating the skills of your business’ workforce and identifying the areas where improving employees’ skills would strengthen your business’ sustainability. There are a wide variety of resources available to improve employees’ skills including apprenticeships, online courses delivered by colleges and universities, and programmes ICAS provides.
Kathryn McLeod:
Understand what is material for your context and then look for others who are doing this well and learn from them. Start with measurement and identify quick wins. Build an internal team who are empowered to act.
I would also recommend this organisation as a great resource: Carbon Reduction Plans for Small Business - Small99
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They run workshops for small businesses.
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They have a toolkit you can buy to get started on thinking about what a decarbonisation plan might look like for your business.
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They organise regular meet ups – People Planet Pint or People Planet Pastry – a great way to meet other people in your local community who might be facing similar challenges.
Rachel Jackson:
Integrating sustainability into your business might seem like a daunting task, especially given the complex terminology, acronyms, and technical details involved. However, it’s essential to make a start for three reasons. First, an increasing number of larger businesses and government organisations are disclosing the sustainability impacts and performance of their value chains. As a result, you will need to align your operations with these expectations to maintain supplier status.
Second, society is more aware than ever of existential challenges, such as climate change, nature loss and social inequality. Customers, now more conscientious of the environmental and social footprint of the businesses they engage with, are increasingly drawn to businesses with strong sustainability credentials. And finally, many sources of finance are now prioritising sustainability as a key criterion for funding. If you meet higher sustainability standards, you’ll gain access to financing options that might otherwise be unavailable.
Sarah Lauwo:
I will advise you on three entry points:
(1) Professional development - here you first need to evaluate your organisational understanding of sustainability and the need for training especially at the management level, to help you understand what sustainability is in general and how to integrate it into your strategy, policies, and decision making.
(2) You need to identify specific issues relevant to the organisation, e.g., carbon resilience, waste management, water management, and EDI, and seek support on how to collect data for reporting purposes. For example, you might need to develop a dashboard for collecting specific sustainability information.
(3) You also need to develop strategies on how to navigate the complexities of sustainability reporting, maybe by collaborating with e.g. academics or professionals in the field, learning from peers, engaging the key stakeholders etc.
Fiona Donnelly:
If there’s confusion as to what sustainability issues to address, start by drafting a long list of ideas from existing sources. To build the list of people and planet topics that an entity can impact, turn to sources like the standards issued by the Global Reporting Initiative.
For ideas on what sustainability matters impact an entity, overlay sources like the relevant industry standard issued by the Sustainability Accounting Standards Board (an overview is available here). Then speak to your stakeholders – staff, board members, suppliers and investors are among the people who will help to identify the most important sustainability matters from the long list. You could get an extra degree of comfort if you check that short list against what peers are addressing by looking at their sustainability report, policies, media releases and more.
Sarah Wilkin:
Today’s business leaders have a seemingly endless to-do list, and tackling sustainability on top can feel overwhelming. I often hear people say they don’t understand sustainability, it’s too complicated, or they don’t have the time to look into it. My advice is that sustainability is simply doing the right thing – in terms of your business, your people, the environment and wider society. When you are making business decisions, ask which is the best outcome for that wider group of stakeholders, rather than focusing on a single sub-set.
Beyond that, organisations like Accounting for Sustainability have published guidance for SMEs: Embracing Sustainability: Actions for SMEs. This guidance covers why sustainability is important and what opportunities it may present for you.
Don't miss the Sustainability Summit 2025 where we will explore the practical application of the anticipated UK SRS, as well as the implications of these new standards for decarbonisation and transition planning.
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