When compared to their larger counterparts, smaller enterprises (in their individual capacity) may have a lesser environmental impact. However, collectively the large number of small businesses means that their environmental impact is substantial.
Small business are typically unaware of their environmental impacts and do not know enough about environmental legislation to ensure that they are compliant. This lack of awareness is the most significant factor preventing the uptake of environmental management by small business. Other barriers include a lack of time as well as financial and human resources.
This has implications for the broader environmental responsibility of larger corporations that outsource the supply of products and services to numerous small businesses. Contemporary corporate social responsibility frameworks necessitate that corporations account for the environmental and social performance of their suppliers and partners. Additionally, regulatory mechanisms such as extended producer responsibility encourage environmental responsibility throughout the product lifecycle. This trend of outsourcing, coupled with the corporate social responsibility agenda have caused corporations to function on a supply chain level and organisations are being held responsible for the environmental and social performance of their suppliers. This means that the environmental performance requirements of large corporations must move both up and down-stream in the supply chain. Indeed, the demand from larger corporations for environmentally responsible practices in their suppliers has been shown to be one of the primary drivers for the uptake of environmental responsibility in small business.
Common practice in this regard, is limited to screening and monitoring small business suppliers and contractors for compliance with minimum environmental requirements. Larger corporations are key because they play a much bigger role in the environmental responsibility of their supply chain. In doing so they will make a significantly positive contribution to environmentally sustainable development by negating the environmental damage caused collectively by their numerous small business suppliers. In addition to environmental compliance requirements, larger corporations can engage with their supply chain with capacity building strategies, contributing to suppliers’ awareness building and training on the corporation’s policy regarding environmental issues. They can also promote efficiency and synergy among small business in their supply chain, thereby enhancing environmental performance and minimising waste and emissions.
When adopting this approach, larger corporations must consider the distinctiveness of the small business sector. Small businesses are subject to, and function differently to larger corporations and will differ in the resources available, strategies, drivers, managerial roles and values, level of involvement and stakeholder prioritisation. This will impact on the way that small business perceive and practice environmental management. Corporate environmentally responsible frameworks that have developed for large corporations cannot simply be transferred to small business, and a tailored, consultative approach is necessary.
By Carla Higgs