Bringing SMEs into the sustainability process
One of the pivotal factors as the world takes up the challenge of the new Global Goals for Sustainable Development, will be the engagement of small and medium-sized enterprises (SMEs).
Estimated to constitute as much as 95% of the world’s businesses and to employ more than half its workers, these firms range in size from two or three employees to 250 or more. They are the equivalent of the dark matter in the universe: they are omnipresent and constitute a huge portion of social and economic activity. Historically, however, SMEs have been largely overlooked in the global agenda.
The traditional notion of business involvement in inter-governmentally defined goals is one of multinationals that contribute in formal public-private partnerships, often involving a multilateral agency.
The realization is growing that if production and consumption practices are to be changed at the root (Global Goal 12), firms of all sizes will need to be part of the push. That includes SMEs ranging from small-scale agricultural enterprises or cooperatives to sophisticated, fast-moving Silicon Valley startups. The same goes for a more advanced role for women; for productive capacity in the developing world; for jobs that are decent and move people out of poverty; and so on.
In fact, the Global Goals refer to SMEs within Goal 8 (sustainable economic growth with decent work for all) and under Goal 9 (inclusive and sustainable industrialization). Discussions in New York on 26 June-8 July during the High-level Political Forum on Sustainable Development – the body designated to provide political leadership for the Global Goals – included frequent references to these economic units.
The question then is how to engage and involve companies that are heterogeneous to the extreme, widely scattered, generally preoccupied with the struggle for profitability and often overwhelmed with paper work.SELF-ASSESSMENT
Companies can start by taking a close look in the mirror and making sure they are doing business responsibly and treating customers, employees, vendors, and neighbours with respect and consideration. They can follow up by taking action and making commitments linked to specific Global Goals. There is a long menu to choose from, including issues like climate, water, health and education.
The United Nations Global Compact, the world’s largest corporate sustainability initiative, provides a comprehensive platform for all companies to align their business operations and value chains with broader societal and sustainability goals. The initiative includes more than 8,000 corporate participants, of which 55% are SMEs. It is collaborating with UN entities such as the International Trade Centre (ITC) and the UN Industrial Organization (UNIDO) to bring SMEs into the sustainability fold.
One example is working with ITC on inclusive supply-chains. Our Women’s Empowerment Principles (WEPs) offer guidance on women in the workplace, marketplace and community. Principle 5 of the WEPs specifically encourages companies to expand their business relationships with women-run enterprises and women entrepreneurs. The ITC-led Women Vendors Exhibition and Forum provide Global Compact participants and WEPs signatories with an opportunity to implement Principle 5 of the WEPs while building relationships with competitive women-owned businesses from around the world.SUSTAINABLE PARTICIPATION
Additionally, ITC sector mapping of voluntary business standards has strengthened the capacity of producers, exporters, policymakers and buyers to participate in more sustainable production and trade. The UN Global Compact has widely featured ITC’s Standards Map as a leading practice.
More specifically, this mapping has been integral to creating practical and scalable solutions for the food sector. The UN Global Compact developed the Food and Agriculture Business Principles to serve as a guide to sustainable food systems. The Standards Map helps to translate these principles into operational processes.
The UN Global Compact set out earlier this year to understand SME sentiment, or even awareness, of the new SDG agenda. Together with UNIDO and Sedex, a global consortium that helps more than 20,000 mostly small and medium-sized firms contend with sustainability reporting requirements, we surveyed SMEs globally.
While familiarity with the past Millennium Development Goals and the new Global Goals was not high, a significant number of firms (roughly one out of five) indicated at least some knowledge. Willingness, along with some caution, was expressed about engaging with sustainability principles. A majority wished for local government support in defining and instituting sustainability standards, along with help from largescale multinationals in their supply chains. The greatest confidence was expressed in close-to-the ground collaboration and assistance provided by entities such as Sedex, the UN Global Compact, UNIDO and ITC.
Bringing SMEs into the implementation process of the Global Goals be important. While challenging, the spirit on all sides appears more willing than might be expected.