by Greg Lathan, MSPH
President

and Michael L. Walker, PE, LEED-AP, CEM
Vice President, Principal Engineer

In EI’s blog series on sustainability in business, the latest article, “Small and Medium-Sized Enterprise (SME) Involvement is the Key to Sustainability Success,” discussed the significant contribution of SMEs to carbon emissions via their supply chain for large corporations. When compared to the larger FORTUNE 1000 clients they support, one would logically assume that reducing carbon emissions for SMEs would be much simpler and more straightforward given their limited geographic footprint, shorter supply chains, reduced work-related travel and smaller office/workspaces to heat/cool and light.

However, while the scope of the contribution of individual SMEs may be “simpler,” there are many other factors involved that are hurdles to continual improvement in sustainability throughout the supply chain.

Traditional sustainability advice for SMEs has focused on the low hanging fruit: converting vehicles from gas/diesel to electric, upgrading energy using equipment, decreasing travel, managing HVAC energy consumption by adjusting thermostats, recycling waste, turning off unnecessary lighting and replacing incandescent/fluorescent lighting with more energy efficient LEDs and most importantly, educating/training employees to view sustainability from both a personal and business perspective. Typically, these voluntary moves by SMEs are a result of supply chain and market pressures, that is, the SME knows that sustainability is an important business strategy.  Without a longer term objective, SMEs often set off doing something to be able to provide examples of internal initiatives in carbon emissions reduction, energy conservation, or waste reduction and recycling.

Even obvious initiatives to reduce carbon emissions present SMEs with challenges. SMEs typically lease their facilities (therefore they may not be responsible for paying their energy bills), making efficiency upgrades for HVAC and lighting difficult to accomplish. SMEs also contract out more manufacturing and shipping of products. SMEs lack the buying power that can help drive down the cost of such things as renewable energy or alternative packaging materials (https://www.greenbiz.com/article/net-zeros-big-challenge-small-business). Finally, SMEs are far less likely to have dedicated staff to spend on environmental issues beyond compliance-matters related to focusing on tracking and reducing carbon emissions.

For a small or midsize company, the journey to net zero can be nearly as difficult as it is for the world’s largest companies.

Many of our clients are small and medium enterprises and they are responding to customer requirements and marketplace pressure to improve, or at least, get credit for improving their sustainable footprint.  However, their approach to this pressure and sometimes sudden requests, is an approach to “just get through” this customer need and get on with their jobs. 

As stated earlier, internal resources are very limited and stretched thinner than usual at that moment and therefore are not fully engaged in the longer term objective.  Outside resources and expertise can help get through this short-term reporting obligation, but the real objective is that sustainability, continual improvement, and net-zero emissions become part of the business culture throughout the supply chain.

Rather than being reactive, there are a couple of very important steps with which SMEs should start.  First, when beginning a sustainability program, a baseline study of current conditions (emissions, waste, energy, water, etc.) should be conducted.  This will do two things: highlight those areas where real improvements can be pursued and facilitate the quantification of the impacts realized from those improvements.  However, most SMEs sustainability efforts have not been preceded by establishing a baseline for carbon emissions/energy consumption or a process establishing a climate strategy, defining targets or setting requirements for their suppliers. Establishing a baseline is imperative if SMEs want to develop a long term strategy for reducing CO2 emissions.

As larger corporations face increased pressure from their respective Board of Directors, shareholders and clients to embrace measures which reduce carbon emissions, they must lean on those within their supply chain to do the same. Given this pressure, it is imperative that “big business” mentor their smaller suppliers in establishing baseline measurements for energy consumption and carbon emissions, establish goals for reduction in the same and track their success.  

Next: New tools which can help SMEs accurately determine baseline carbon emissions and energy use and establish goals for long term carbon reduction.

How Can We Help?
The EI Group, Inc. (EI) provides a comprehensive array of services for the development and execution of sustainability initiatives relevant to your business. We actively seek ways to improve sustainability performance while supporting business goals. Contact us today at (800) 717-3472 or [email protected] to learn more!