Resilience and Training for SMEs
Sustainable approach for MSMEs Sustainable approach for MSMEs
What do you imagine by being sustainable? How would you describe the meaning of sustainability to your friend? What is the sustainable approach your company applies? Answer the questions and watch this video to check your knowledge about the sustainable development Sustainable concerns in global development got attention in the mid-last century. Read about several milestones related to the issue of sustainable development regarding the creation of an international framework for further direction: 1972 – United Nations Conference on the Environment was the first world conference on the environment in Stockholm also known as the Stockholm Conference. It represents the international beginning of a dialogue between developed and developing countries about the link between environmental issues (mainly pollution of water and air), economic growth, and the well-being of people. Moreover, the United Nations Environmental Programme (UNEP) was created. 1992 - The United Nations Conference on Environment and Development (UNCED) was held in Rio de Janeiro also as an occasion of the 20th anniversary of the Stockholm Conference (1972) focused on the human socio-economic impact on the environment. UNCED or the „Earth Summit“ recognized that: the concept of sustainable development was an achievable goal for all people; to meet the human needs for sustaining life on Earth is vital to balancing economic, social, and environmental concerns - for such integration, a new perception of consumption and production, the way we work, live, and make decisions is significant. 2015 – Summit on Sustainable Development was held at the UN Headquarters in New York where the Agenda 2030 including 17 sustainable development goals was formally approved. Two months later, Paris Agreement was signed and ratified by 187 parties at COP21 in Paris. 2022 – Stockholm+50 international meeting took place after fifty years since the 1972 Stockholm Conference and was determined to accelerate the goals of Agenda 2030. Read the key recommendations for accelerating action towards a healthy planet for the prosperity of all. Sustainability in the context of MSMEs
Sustainability in business refers to
Why act sustainably?
The Earth doesn’t produce unlimited natural resources. On the contrary, we live in a truncated world of resources called planetary boundaries that must be respected to avoid environmental, social, and economic consequences. Watch the video about planetary boundaries and their current state here. Operational implications for MSMEs
Be aware of your company’s impact on the environment and society that foregoes sustainable solutions thus its strategy and goals. Don’t forget that setting goals for your company must be Specific, Measurable, Achievable, Relevant, and Time-bound – SMART
Considerations of sustainable operational implications you can apply within your company include:
Check the Sustainable trends for MSMEs for 2023 by Dr. Ayman El Tarabishy
Foundations for social entrepreneurship Foundations for social entrepreneurship
Social entrepreneurship is a way to sustainably solve societal challenges! According to the European Commission: There are 2.8 million social enterprises, representing 10% of all businesses in the EU. Almost 13.6 million people – about 6.2% of the EU’s employees – work for social enterprises. On top of the paid workforce, the social economy mobilizes volunteers, equivalent to 5.5 million full-time workers. Based on the numbers, we can see that social entrepreneurship has a big potential to grow. The actual disadvantage is very low public exposure and recognition. Let´s learn more about what social entrepreneurship is and what added value could your business gain with this approach! Source: Business Jargons, read more about social entrepreneurship here. How is social entrepreneurship different?
In general, entrepreneurship is based on profit maximization and this profit can be divided among the owners. Social enterprise can operate in any field and generates profit as any other business - the difference is how the profit is used! The profit is reinvested and fulfills a clear social mission that positively impacts a community! Social enterprises reinvest a certain share of their profit based on the relevant national law – e.g. Social enterprises in Slovakia put more than 50% of the profit back into the organization to expand and improve their services and activities that they carry out in order to fulfill their socially beneficial goals.
Social enterprises vs. profit-maximizing business and non-profit organisations: Source: Building Social Business Models: Lessons from the Grameen Experience Muhammad Yunus, Bertrand Moingeon and Laurence Lehmann-Ortega
Often, in the eyes of the public, social entrepreneurship is mainly associated with the integration of disadvantaged people.
BUT social missions can support the community’s well-being in many other fields than job creation and social inclusion of vulnerable groups, for example, cultural needs, healthcare, environmental protection, etc. For a better picture of the answer to the question „What is Social Entrepreneurship?“ watch the video created by Cluster for Eco-Social Innovation and Development CEDRA Split. Check examples of successful social enterprises and social innovation projects in selected countries described in the Handbook on Social Innovation prepared by experts from Slovakia or good practices identified within the project BRESE, Interreg Europe. Social entrepreneurship vs. Corporate social responsibility (CSR)
Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public. A socially responsible company voluntarily carries out activities that contribute, for example, to the protection of the environment or the development of the community, (they release employees to perform volunteer activities, financially support cultural events, etc.) - BUT its primary goal is still the creation of profit! While the primary goal of a social enterprise is the fulfillment of the social mission, the creation of social benefits, and a positive impact on the community. Social mission in MSMEs
Green entrepreneurship Green entrepreneurship
Green entrepreneurship is a subset of sustainable entrepreneurship that addresses mainly environmental concerns but also social change through its products, services, and operations while generating profit. Green entrepreneurs are thus entrepreneurs who work towards the elimination of negative impact on the environment, by:
What is green entrepreneurship and its principles
To make an impact, green entrepreneurs must communicate information about their sustainable activities and inform all stakeholders about it. However, this is preceded by the specific set of goals and the correct selection of tools to measure progress (such as monitoring the environmental impact of production operations and products during the whole lifecycle). Additionally, successful green entrepreneurship is desirable for the customers’ swift of their consumption to be more consciousness one.
How to leverage the potential of green entrepreneurship
“All sectors of the economy will have to change for the world to decarbonize, upending established markets and creating new ones. Achieving a net-zero world by 2050 may well prove to be the largest reallocation of capital in history.”
-McKinsey, 2022
Level of sustainable opportunity based on technological maturity and climate impact: Source: own processing according to https://www.mckinsey.com/industries/industrials-and-electronics/our-insights/identifying-opportunities-and-starting-to-build-a-new-green-business-in-the-industrial-sector Explore 5 steps that can help you mitigate risk and evaluate your sustainable opportunities by McKinsey & Company (from mapping opportunities for industrial companies along 11 customer sectors: agriculture and land and forest management, buildings, carbon management, consumer goods, hydrogen, industrials, oil and gas, power, transportation, waste, and water):
1. Assess the value prospects
2. Identify important technology and infrastructure enablers
3. Base priorities on climate impact and technological maturity
4. Align with future policies and regulations
5. Define a strong business case and plan
Don’t forget… Get certified – Consider having your company or products certified by a certification body. It can be also a valuable marketing tool to help create a sense of trust with customers and other stakeholders. Leverage government incentives - To make it easier to implement sustainable solutions, green entrepreneurs should explore the various government incentives such as grants, tax credits, and loans that are available to support sustainable business practices.
Challenges for industrial companies that might amend their sustainable path:
Tips & Tools to make your business “greener”
Not sure about your impact on the environment? The knowledge of the current state precedes every change. Measure your carbon Footprint and see which activity within your company generates the highest negative impact on the environment by using Free Carbon Calculators: United Nations Carbon Footprint Calculator Summing up Summing up
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sustainability, sustainable development, social entrepreneurship, green entrepreneurship
Objectives/goalsAt the end of this module, you will be able to:
Sustainability in business refers to doing business without negatively impacting the environment, community, or society thus reflecting the mutual effect of its three components (business, environment, and society). An example of the concept in terms of social sustainability is Social enterprises, which can operate in any field and generate profit as any other business. However, their profit is reinvested and fulfills a clear social mission that positively impacts a community. In the field of active environmental protection and minimization of negative impacts on nature, we are referring to Green entrepreneurship, which represents a huge business opportunity for the decarbonized world by 2050.