SMEs seek environmental impact data

By ITU News

Small and medium-sized enterprises (SMEs) seeking to lower their environmental impact while maximizing efficiency will often face complex decisions about how to invest limited resources.

A recent workshop organized by the International Telecommunication Union (ITU) Focus Group on Environmental Efficiency for AI and other Emerging Technologies zeroed in on the need to support SMEs in overcoming sustainability challenges, with a focus on how eco-friendly criteria for technologies can help.

Marc Mosthav, head of Net Zero Transformation Digital Platforms at Atos, recounts how a North American retail company consulted with his firm about installing rooftop solar panels at retail outlets – a commonly accepted way for companies to reduce their carbon footprint.

Despite high upfront costs, however, rooftop panels may sometimes achieve only marginal emission reductions, especially in markets where the main power grid is already “green”. SMEs striving for climate and environmental sustainability therefore need concrete data to know which solution, or mix of solutions, works best in each case.

Data-driven decision-making has become increasingly crucial for SMEs and start-ups to operate more sustainably. But compared to large corporations, smaller companies tend to have limited resources and fewer means to shift towards eco-friendly operations. But data is a resource at the disposal of most – if not all companies in a digital economy.

“In the corporate world it’s easier to nominate somebody who can look after sustainability. You don’t always have that freedom in the small or medium enterprise environment,” said Mosthav.

The day-long workshop saw participants discuss how to engage SMEs in a sustainable digital transformation.

Action plans and barriers

The relative weight of SMEs in the European economy is significant, with approximately 23 million small and medium-sized companies on the continent, according to the European Commission. Their combined activity generates more than half of the region’s GDP. At the same time, their emissions account for 63 per cent of Europe’s carbon footprint.

Recent years have seen European SMEs ramp up efforts to mitigate their environmental impact. Nearly one in four already have a specific action plan to reduce their carbon footprint, while nearly one in three offer green products in their portfolio, according to a recent Eurobarometer survey.

Still, SMEs face various impediments when trying to align with eco-friendly standards.

A survey conducted just before COVID-19 revealed that 42 per cent of European SMEs reported feeling a lack of support and resources to help them become more sustainable. Limited access to the right skills and expertise and insufficient consumer demand for green products and services are other hurdles the surveyed companies highlighted.

While their expressed interest in becoming more sustainable is a good starting point, SMEs’ real needs must be considered when designing practical solutions or policy interventions.

The key is to help SMEs “transform this interest into business action that can lead to value for their company,” according to Daniela Tulone, founder and director of ecoSurge, an organization that aims to leverage both digital and business innovation towards the UN Sustainable Development Goals (SDGs).

Reconciling environmental goals with the financial needs of SMEs, given their limited resources, is a formidable challenge. But in the search for solutions, we must not avoid these dilemmas or questions without easy answers, Tulone reflected.

Public and private resources

SMEs need to have well-structured sustainability plans that help them, for example, access green-focused financial resources from both the public and private sectors, recommends a white paper by SDA Bocconi – School of Management Sustainability Lab on how to foster sustainability in small and medium-sized enterprises.

The white paper also highlights the wide variety of public, public-private and private initiatives that can strengthen skills transfer in the areas of innovation, technology, and digitalization for SMEs. One example is the Enterprise Europe Network, a platform that offers advice, support, and partnership opportunities in the sustainability field to Europe-based companies.

Green Public Credit Guarantee Schemes (PCGS), ESG-linked loans or other green financial instruments can be key levers to boost the sustainability plans of small and medium-sized enterprises.

A global discussion

All participants in the debate agreed on the need to open a global discussion among the different actors involved in sustainable digital transformation. In addition to SMEs themselves, governments, consumers, corporations, researchers, and other stakeholders must be involved.

While reducing carbon emissions typically dominates the solutions discourse, other issues are at play. Waste generation, specifically e-waste and its proper management, is another area where SMEs need support. For example, governments can help transform the consumption habits of citizens, corporations or other consumers through policy and regulation.

There is much to gain through the active collaboration of all parties, pointed out Tulone. “Sustainability can actually improve our quality of life, and everybody wants this.”

Young entrepreneurs play an increasingly vital role in sustainable innovation, simply by showing that the two are not mutually exclusive.

“In the SME and start-up sectors, there is a real awareness of this issue,” said Salvatore Giacomuzzi, professor of psychology and expert in business process transformation. “People founding a company put it on their agenda from the beginning. They don’t ignore sustainability.”

The interest of younger professionals in working for sustainable companies is another lever of change that can help accelerate a green digital transition.

Today’s young jobseekers “are only looking to work for employers where they feel that sustainability is one of the core values,” Mosthav asserted, adding that companies need to put such values at the forefront. “If you don’t do that, you may not be able to get specialists in the future.”

ITU introduced reduced membership fees for SMEs in January 2020. Learn more about ITU’s innovative SME network or contact sme@itu.int to become an SME member.

The ITU Focus Group on Environmental Efficiency for AI and other Emerging Technologies reports to ITU’s standardization expert group for environment, electromagnetic fields, and circular economy, ITU-T Study Group 5.

Image credit: freepik