As many as 85% of S&P 500 companies publish sustainability reports, and 130 institutional investors representing a whopping $17 trillion in assets form part of the NGO CERES to push even more companies to adopt best sustainable practices. So it's clear we've reached mainstream levels in our shared goal of greening business across the world. Or have we?
The reality is that the bulk of this activity is happening at and among large corporations. In the small and midsize business (SMB) world, by contrast, which represents the bulk of economic activity and job creation in nearly every country and city on the planet, adoption of those very same best practices remains significantly and disturbingly under-mainstreamed.
As it stands today, it will be impossible to avoid catastrophic climate change and the collapse of the global economy in the coming decades, which will include businesses of all types and sizes, if we leave the effort just to the big guys. As a growing chorus of experts and studies are pointing to, unless SMBs enter the game with fantastic urgency and scale, the job simply will not get done.
The good news is that the exact same benefits and ROI large companies have discovered in sustainability apply just as well to SMBs. Multinational corporations, and a number of well-known first-adopter SMBs, have spent the last 25 years paying the learning-curve dues, as it were, allowing the bulk of SMBs to now go straight to execution knowing the results will be phenomenal.
But here's the thing. We at Homera have studied the sustainability advisory available to SMBs in the market today, and have found it sorely incomplete, clearly below the level implemented by large companies. It consists mostly of steps to save money reducing carbon from operations, and while that is indeed a huge part, it excludes other huge parts.
The paradox should concern us all: precisely at the time when the world desperately needs SMBs to get with the program quickly and massively, and when large corporations have given us all the trial and error we need, SMBs are generally lacking the right path to get there from here.
Enter a holistic approach
Any sustainability action plan worth the money must feature these five building blocks:
They must not only be included; they must be integrated. Seamlessly. That takes a team assigned to the task, and a process, and it takes a vision of the entire value chain of the company, or a consideration of everything that goes into its products and services and is in turn affected by them.
This is the gaping void in SMB sustainability management today, the one keeping small and midsize businesses from riding and profiting from the wave, and it is one we at Homera have decided to help fill with a new advisory service we're calling Holistic Value Chain (HVC). It is perhaps best understood by looking at each of the five building blocks and their seamless fit.
Traditional SMB strategies aim to remove carbon and other environmental impacts from a company's operations: energy, water, waste, logistics, manufacturing, distribution, that sort of thing. But the process is usually linear: change to LED lighting, install solar, improve logistics, reduce and recycle. HVC instead deploys circular-economy practices now proven to deliver superior results, because they squeeze far more carbon and other impacts from the value chain. As with most things sustainable, circularity has thus far been the purview of large corporations. We believe it is time to democratize the practice.
Beyond addressing impacts, sustainability has become an ocean of opportunities for companies that innovate and market new solutions across all 17 Sustainable Development Goals (SDGs) as promoted by the United Nations. On this front, we help companies go beyond a savings generator in their operations and turn sustainability into a revenue generator.
None of this is possible, certainly not optimal, unless it integrates every relevant stakeholder of a company. Employees are typically the principal ones included, and that's fantastic. But results optimize when you also bring in your suppliers and partners to the conversation, as well as community groups and leaders impacted by your company, and importantly your banks and sources of capital. If you're a public company, integrate your investors. If you're an investor, know that those benefiting from your capital are also your stakeholders.
Yet another crucial component usually left out of sustainable-management programs is climate adaptation and resilience. But given the now certain probability that every SMB will be hit hard by climate change somewhere along its value chain, the only smart way to run a business today is to prepare thoroughly and integrate this into the plan, as well.
Finally, to borrow from the famous John Donne poem, no business is an island. Every SMB exists within a broad social, economic and environmental context that impacts and is in turn impacted by the business. No business thrives if society doesn't, and no economy grows indefinitely when it violates nature's finite boundaries. As an SMB owner and management team, you profit when you integrate this broader context into the process.
In sum, Holistic Value Chain offers a total-company approach to sustainability management that optimizes outcomes and minimizes time and investment. It is enabled by today's digital tools, which allow not just for more efficient processes, but also greater engagement with those who stand ready to join your efforts and power the work at hand.
The word holistic has a long, cherished history and role in spirituality. Today, let's write a new chapter by giving it a central, future-defining role in sustainability.