Mastering sustainability (1): How SMEs can tackle their biggest challenges
Sustainability is becoming increasingly important for businesses, but where should small and medium-sized enterprises (SMEs) start? Limited resources and complex structures often make the first step the hardest. Discover the motivations driving companies to embrace sustainability and the critical role of leadership in this transformative process. By Simon Führt, Umco.
The introduction of corporate sustainability management, which encompasses environmental responsibility, social justice, and economic performance (collectively known as Environmental, Social and Governance or ESG), presents significant challenges for small and medium-sized enterprises (SMEs). Limited resources and unique company structures often make the initial step the most daunting. The central question “Where do I start?” not only highlights uncertainty but also reflects the fact that the term sustainability is generally used in a very broad sense. Nonetheless, the willingness to engage with sustainability is the crucial first step toward developing a sustainable business model.
Why sustainability matters: Intrinsic vs. extrinsic motivations
A company’s drive to engage with sustainability can stem from both intrinsic and extrinsic motivations, fundamentally shaping how sustainability management is structured. Intrinsically motivated companies may see sustainability as integral to their identity and long-term strategy. In contrast, extrinsic motivations are driven by external pressures, such as customer demands or legal requirements.
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The debate around corporate sustainability usually revolves around the question: Why should a company concern itself with sustainability? Frequent reasons include customer inquiries about sustainability practices, supply chain requirements, and the desire to be seen as a sustainable company. Beyond internal and market-driven motivations, regulatory developments play a vital role. New legislation, such as the Corporate Sustainability Reporting Directive (CSRD), mandates companies to report on their sustainability efforts.
The role of leadership in corporate sustainability
The managing board must provide clear direction, defining what sustainability means within the company and in the context of its business activities. Measures should be incorporated into corporate decisions and embedded in the core business for the long term. Establishing a dedicated department to coordinate sustainability efforts ensures that these efforts receive the resources and focus they deserve.
In the next part “Mastering sustainability (2): Turning ESG goals into real-world success”, Simon Führt will focus on how companies can turn ESG goals into actionable steps. The necessary phases for developing a sustainable strategy will be explored, along with how to successfully integrate ESG criteria into business processes.
