Our Perspective


Small Business, Big Impact: How small businesses can maximize their bottomline for people and planet

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Small businesses often work on tight margins and many are waking up to the fact that being eco-efficient can reduce costs. UNDP Afghanistan Photo

There is good news and bad news. The bad news is that most big businesses are failing to work on sustainable development goals, according to new surveys. The good news is that, finally, small businesses are on board. Yet many small businesses know very little about SDGs even though it is now two years since the 2030 Agenda for Sustainable Development was adopted—the most ambitious development agenda in history that lays out 17 goals to end poverty, fight inequality and injustice, and tackle climate change by 2030

According to speakers at a Regional Dialogue on Strategic Partnerships to Meet SDG Commitments in August 2017, the contributions of private finance – domestic commercial investment in particular – to sustainable development outcomes is critical. The extent and manner in which small businesses create jobs, develop skills, treat the environment, drive innovation and stimulate growth is an important determinant of the development paths that countries ultimately follow.

Unless small businesses work together, countries will not achieve the sustainable development goals. These small, micro and medium-size companies generally employ fewer than 250 people but are the backbone of ASEAN economies and a key source of the innovation and growth needed to achieve SDGs. In plain numbers, they represent over 90 percent of all firms within the Asia and Pacific region and account for, on average, 60-70 percent of total employment and up to 40% of GDP. It would be hard to achieve the goals without small businesses being on board.

Their involvement can be transformational, providing an unprecedented opportunity to shift the world onto a path of inclusive, sustainable and resilient development. The question is: how can small businesses contribute to these ambitious development goals and remain financially sustainable? I propose three lines of action for small businesses.

There is growing evidence that suggests that inclusive business models benefit small businesses. Inclusive businesses target the low-income market with the purpose of making reasonable profits and creating tangible development impact. They are not only generating new business opportunities but opening new markets because they are ‘bridging partners’, those who match products in demand among people living in poverty.

For example, DataWind is an India based mobile internet devices provider that provides low-income groups in India with affordable tablets, apps & Internet. The company has created a new market segment by keeping the manufacturing cost of their tablets at less than US$50. As a result, the low-cost tablet segment has doubled from 20 per cent to 40 percent overall market share over the past four years. By the end of this year, DataWind is expected to be selling more than 80 percent of tablets in India to customers who live on less than US$8 per day.

Second, start a business for the SDGs. Increasing numbers of start-ups want to have a positive environmental and social impact at the core of their business ideas and operations. These sustainability-oriented start-ups, deliver SDGs solutions, and are great examples to emulate. For instance, Niskala, a regional SDG start-up from Indonesia, is a waste management service company that reduces the massive piles of waste generated by the country’s religious festivals.

Third, reduce operational costs by cutting back on paper and electricity. Small businesses often work on tight margins and many are waking up to the fact that being eco-efficient can reduce costs. The number one step is to go paperless. For example, St John’s Buildings is one of the first lawyer’s group  in the UK to develop and introduce a paperless system that may save the firm up to £350,000 a year while dramatically reducing its carbon footprint.

For the details, here is an SME toolkit to reduce office environmental impact

Of course, there are more than three approaches small businesses can take but the first step is that they realise that SDGs apply to small businesses. In the end, sustainable development depends on sustainable business and vice versa.

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