Why you should care about sustainability as a small business
It is evident the world is changing, we have all heard about climate change and the need to save our planet. We’ve seen the movements for recycling and reducing single-use plastics, reducing water usage, planting trees, campaigns to reduce Co2 emissions, and so on. We’ve applauded social enterprises like Ashoka and green activists like Vanessa Nakate and Greta Thunberg…sustainability is becoming difficult to ignore. But, what does sustainability really mean for you, as a small business owner in the developing world? And, why should it be a core consideration for your business?
As a corporate responsibility (CR) consultant, most of my conversations about sustainability and corporate responsibility with small businesses start with how can you help me survive? Their priority as a small business is to make enough money to survive. Add the strains of conducting business in a developing country, with lots of bureaucratic red tape and volatile markets, it becomes a game of survival of the fittest. The US Bureau of Labour Statistics claims that 20% of small businesses fail in their first year, and roughly 50% after their fifth year, in comparison to a staggering 80% of small businesses in Nigeria who fail within their first five years. To survive as a small business in the Nigerian market, your business needs the adaptability of a chameleon. It faces the enormous task of adapting changing global standards to a harsh and highly competitive market while trying to stay afloat.
So, what does sustainability mean for you? To effectively explain this, let me define what sustainability means. Sustainability is a word that is used to mean different things globally, and it has taken on an environment focused definition. However, sustainability, as defined by the U.N, means;
“meeting the needs of the present without compromising the ability of future generations to meet their own needs.”
For your small business, this means making money in a way that positively impacts your community with as little negative impacts as possible. It means putting impact as high on your priority list as profit. This requires a thorough assessment of more than the finished product, but your business value chains also. Taking a closer look at the impacts of your primary and support activities and adopting sustainable options where necessary as often as possible.
For example, as a small restaurant owner, your value chain assessment would look something like this. (see below) As the picture shows, your assessments would need to assess where the food comes from? How are the farms run? Do they adhere to child labour laws? Are they following regulations of agricultural pesticides and sustainable pest management? What are your waste management practices? Do you have strong occupational health & safety (OHS) practices for your staff? How well do you manage your water usage? These are some of the important questions that help determine the impact your business has on its immediate environment, community and beyond.
However, beyond having a positive impact, sustainability considerations come with economic benefits for your business. One of which is cost reduction. A major cost of most Nigerian businesses is energy. With the lack of constant power, businesses have to calculate the high cost of self-generating electricity. Switching to renewable energy alternatives such as solar power, or small hydropower (SHP) may result in significant savings. Also, finding creative alternatives to packaging proves to be more cost-efficient. For example, using banana leaves or recycled paper to package take out foods instead of copious amounts of plastic would save your business on packaging but also reduce the use and collection of single-use plastic. Furthermore, proactively assessing for and addressing these social and environmental issues saves your business future compliance and regulatory costs.
Another benefit is risk reduction. The financial impact on brand value from poor business practices, such as local pollution, child labour, harmful use of pesticides, etc could potentially be a significant cost for your small business. If you found out that your favourite local restaurant sources ingredients from a farmer who uses harmful pesticides linked to diseases and has children tending the farms all day, you would be less likely to patronize them again, and they would have lost your trust as a customer. This is where due diligence comes in as a local restauranteur, to ensure that all vendors within your value chain are as conscious and sustainable as possible.
So, why should you care about sustainability? Because you cannot afford not to! It may promote the longevity of your business, and it makes you a positive role model for emerging small business to emulate, thereby strengthening positive principles and ensuring sustainable development. Finally, because it affects the quality of life we get to live as a community!