How Social Impact Leaders Are Fostering Climate Resilience and Driving Environmental Change - Part 2

Part 2: Facilitating Change within a Community Business, Social Enterprise or SME

It’s a stark reality, but globally, our economic activities have pushed us outside the safe zones for six of the nine planetary boundaries that keep Earth habitable. There are widespread ramifications—ecosystem collapse, food insecurity, water shortages, extreme weather, public health risks and loss of livelihoods. It also impacts almost every sector and industry, and climate-related disruption to business operations means addressing sustainability is no longer optional but essential for long-term resilience and growth.

In part one of this blog series, we explored how leaders in impact and social investment are fostering environmentally progressive strategies. With access to capital and the ability to influence various sectors, these leaders can drive large-scale environmental change. Within SMEs and social enterprises, however, leaders thrive when focused on localised, community-driven efforts, leveraging agility and direct engagement to adopt sustainable practices. While impact investors are effective on a systemic level, SMEs can develop tangible, grassroots solutions. In our second instalment of this series, we’ll cover the potential, power and limitations of spearheading green initiatives within small to medium-sized organisations.

Centering sustainability

Rather than treating environmental efforts as peripheral, to maximise impact, they must be deeply embedded into business models. Business leaders can integrate sustainability into their company’s mission, vision, and operational strategies, making sure they are central to how the company operates. This is becoming a priority in the UK, with small businesses encouraged to take action through initiatives such as the SME Climate Hub designed to help the UK reach its net zero target by 2050. It will take action at every level to reach these targets.

To embed responsible practices, it is advisable to evaluate the value chain of your business, from inception to distribution. This may involve leveraging new technologies to streamline processes and reduce carbon footprints, involving community stakeholders in design processes, and exploring examples of sustainable business models such as circular economies or socially driven initiatives. Sustainability alliances (like Sustainable Business Alliance), NGO resources (like The Carbon Literacy Project and WRAP (Waste and Resources Action Programme), online courses, and peer-to-peer learning are some methods for learning to develop robust environmental strategies.

Collaboration and Partnerships

Despite being a cornerstone of the global economy, SMEs often face challenges like limited resources, capacity, and bargaining power. To heighten their impact, it’s crucial that they collaborate with other sectors to access the support, knowledge, and funding necessary to drive meaningful change. Partnering with larger organisations can help SMEs align with sustainability standards through capacity-building initiatives and co-investment in green projects. These partnerships combine financial leverage with on-the-ground action to achieve a more thorough impact. As well as collaborating with large organisations, funders, non-profits, or government bodies, businesses can participate in networks such as the Environmental Funders Network (EFN) or initiatives driven by the likes of Power to Change, which focus on community-based environmental projects. These collaborative ecosystems show how businesses can create ripple effects for sustainability and set examples for larger businesses.

Greening the Supply Chain

No matter the industry, developing and holistically embedding ESG practices across all levels of the supply chain is a productive step towards achieving sustainability goals. From energy and utilities to transport, packaging and technology, sourcing from environmentally responsible suppliers, smaller businesses can vote with their wallets and put their money where their values are. It’s good for business, too, with 83% of UK respondents saying they would be more likely to engage with a business that sources their products locally and 55% willing to pay more for ethically sourced goods, according to a 2021 survey.

When it comes to choosing new suppliers, you can assess any green claims they make by using the Competition and Markets Authority’s green claims checklist to ensure they are valid. Suppliers that adhere to ISO quality guidelines or schemes like B Corp certification are also more likely to abide by ethical practices. By adopting sustainable initiatives, not only can SMEs influence industry standards and practices, but they can also position themselves as sustainable suppliers and partners for larger companies that have their own ESG targets to meet.

The Carbon Trust has a number of helpful resources for reducing carbon footprints in logistics and adopting circular supply chain models. Some other guides can be found via:

Carbon Footprint Reduction

Carbon footprint refers to the amount of carbon dioxide released into the air and can be applied to the impact made by individuals, industries and businesses. Implementing energy-efficient practices can look like using renewable energy sources such as solar panels and adopting energy-efficient technologies, including LED lighting and electric vehicles. Despite financial barriers that might be present, SMEs can quickly pivot to adopt sustainable practices or test innovative solutions due to their smaller scale, which larger corporations may find challenging.

We create carbon emissions through off and online actions, so switching to a more sustainable web hosting option, reducing data storage and improving website energy efficiency is an important action to take. Leaders can also guide their businesses to measure their carbon footprint and implement reduction plans. For unavoidable emissions, they can invest in carbon offsetting programs or commit to becoming carbon neutral. Useful resources to support this process include the Nature Strategy Handbook and the sector-specific nature-positive actions reports, which draw on guidance from organisations such as the Task Force on Climate-related Financial Disclosures (TCFD).

Accessing Green Finance

Social impact leaders in SMEs and community businesses can bolster their efforts by accessing funding, such as green loans, sustainability-linked loans, or green bonds. These schemes offer financial support for environmental innovation, allowing businesses with limited access to capital the opportunity to action their environmental commitments. The UK Business Climate Hub has advice about where to find these opportunities and you can explore what current funding the UK Government has available for businesses. Find more guidance on these resources provided by British Business Bank, SSE Energy Solutions, Small Business UK, and Green Economy UK.

Initially piloted by The Key Fund, The Energy Resilience Fund (ERF) is now managed by the Social Investment Business and provides a blended funding package of loans (60%) and grants (40%) to strengthen the energy resilience of charities and social enterprises in England. For community organisations, the benefits of this scheme are vast, helping businesses reduce carbon emissions and energy cost savings, upgrade their energy efficiency ratings to meet future regulations, increase the use or comfort of buildings, and replace older vehicles and equipment with modern energy-efficient versions.

Fostering a Sustainability Culture

Social impact leaders can encourage environmental change by cultivating a company culture that prioritises sustainability rather than viewing it as an afterthought. This can involve setting up green programmes, championing eco-friendly actions, and providing environmental education. By involving employees in decision-making around sustainability initiatives, leaders empower them to be invested in green initiatives.

Hiring the right talent is an essential part of creating a culture of environmental stewardship. Effective recruitment ensures that businesses have the expertise and passion needed to implement green practices. Bringing in employees who understand ESG principles or have a desire to learn can help sustainability become a core part of the business’s identity and decision-making processes. Also, by making the sustainability practices of your business public, you can attract candidates who are aligned with the company’s values, enhancing employee engagement and retention.

Fostering environmental change within a business requires a deep commitment from social impact leaders to make sustainability an ongoing priority across all touchpoints of their business. By focusing on these actions, social impact leaders can drive meaningful change that benefits both the planet and their business’s long-term success. If you’re interested in exploring roles in social impact or finding the right talent for your organisation, reach out to us at info@careers4change.com.