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SME'S AND SUSTAINABILITY IN EUROPE.

The EU perspective with regards to sustainability incorporates: economic, social, and environmental pillars that are intertwined with competiveness, set in the framework of the Lisbon Strategy for Growth and Jobs which was set up in 2005. Through the notion of CSR, enterprises can now significantly contribute to the EU’s treaty objectives that underpin sustainable development as a highly competitive social market economy. CSR is therefore a vital tool for businesses to create a set of values which can build a more cohesive society which can lead to a more sustainable economic mechanism.

In October 2011, the EU published a new Strategy for CSR including a new definition: “the responsibility of enterprises for their impacts on society.” (European Commission, (2011)) To meet their CSR practises, enterprises should identify and prevent their possible impacts.  The complexity of putting this process together depends on factors such as the size of the company and the nature of the business. For SME’s, the process of how they integrate their CSR practises is likely to remain informal and intuitive.

It has been argued that the term ‘sustainability’ would be a better term for SME’s to use rather than the common term of ‘CSR’.

So what should sustainability mean to SME owners? The term “sustainability” to the majority of small business owners would be linked with the likes of climate change and reducing the level of co2 emissions they use.  The concept of sustainability goes beyond businesses ‘going green’, and is more about responsible business that contributes socially and economically to both the local and wider communities.

While there are legislative guidelines for environmental protection, individual small businesses often fall behind with these guidelines. Common barriers that are associated with mainly European SME’s include a lack of knowledge regarding environmental problems and also knowing the potential benefits of environmental management. In addition, they lack the expertise and the sufficient tools as well as having limited market incentives for environmental awareness.

In 2007, an Environmental Compliance Assistance Programme was set up, the aim was to alert twenty three million European SME’s on the negative impacts that they were causing to the environment; but to also educate them on how to change their practises by being more sustainable.

This scheme gave SME’s an insight into:
 

  • Improving communication as well as targeting information, to outline and address specific information gaps.
  • To create local environmental expertise for SME’s and to overcome their lack of knowledge.
  • To promote and support initiatives from public authorities that support sustainable production.
  • Gaining more accessible tailor-made environmental schemes that concentrate on environmental concerns into core business activities for SME’s in a cost-effective and coherent manner.
  • Implementing better regulations/policies and to minimise the administrative burden that many SME’s perceive CSR to be linked with.


On the continent, the awareness for sustainability and awareness and environmental compliance for SME businesses has increased since programmes such as the Environmental Compliance Assistance Programme was launched.

Throughout the past few decades, the European Economic situation has constantly changed, especially with today’s ongoing economic crisis causing many uncertainties. These changes have therefore influenced different factors (such as policy making, governments, organisations, etc.) It can be said that this has attributed to the social responsibility and dedication that links to a company’s mission and business behaviours, the ramifications of this will have a result on the socio-economic factors in which they operate.

Looking at ‘CSR’ as a whole, the concept can be perceived as a new managerial based model that is centred around voluntary integrating economic, social, and environmental pillars into the value chain as well as aligning interests from shareholders and stakeholders.

At a more organisational level, the European Union has been dealing with CSR and sustainable issues since the start of the new millennium. Ever since the Green Paper (promoting a European framework for CSR) each EU member’s interest in the concept has exceptionally grown. There is now a steady amount of research that has been conducted on social responsibility and SME’s from the EU.

In conclusion, the most ongoing challenge that remains is the adoption of corporate social responsibility among these small businesses, particularly SME’s. Research has shown that this lack of awareness, especially in terms of relevance and benefits that CSR can offer for these businesses, remains a huge obstacle. However, despite of some recent successes of SME’s implementing CSR strategies, many issues remain that need to be addressed in order to raise a further insight of sustainability and social responsibility in Europe. One solution can be by giving public recognition to what many enterprises contribute in the field of corporate social responsibility, the EU can help to improve peer learning as well as encourage  more SME’s to develop their own strategic approaches to the concept. Furthermore, building on the lessons of initiatives in various EU member states, the commission will actively support capacity-building for SME organisations to improve better CSR advice for small and medium sized enterprises. Further EU engagement with SME’s will be essential for the success of the European 2020 strategy (a strategy based on the EU to become a smarter, sustainable, and more inclusive economy) which will focus on issues such as diversity management, education, training, gender equality, and employee health and well being.

Dave Dhanoo
Dave is currently working with ORB as a Work Experience Intern, whilst studying for an MSc in Marketing Management. He has an interest in CSR and intends to complete his dissertation on this subject. 
 

 


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