Green Action Plan for SMEs

Small and medium-sized enterprises (SMEs) have been, so far, ignored in consideration of sustainability and corporate responsibility despite their importance to the world economy. This is the main reason why ACCA has welcomed the publication by the European Commission of “Green Action Plan for SMEs”. The publication explains the possible benefits for SMEs of adopting sustainable business practices.

ACCA’s senior economic analyst Emmanouil Schizas said the approach to sustainability in business practice for SMEs has to be developed after a thorough analysis of characteristics of this industry. The analysis should not only be limited to the differences between large scale entities and SMEs, rather should also consider the differences between micro, small and medium-sized enterprises within the industry.

He further said that the role of owner-manager in adoption of sustainable business practices by SMEs is very important. As most of these companies are managed and owned by a single person and unlike large entities he/she is not bound to report over its activities to any board or multiple stakeholders. This gives him the freedom to apply such practices and at the other hand an opportunity to ignore them.

ACCA believes that accountants have an important role to play in bringing these SMEs to optimal use of resources. This will for sure bring benefit to owner-manager but will not be big enough to convince these SMEs to invest or innovate for long-term competitive strength. Besides the ability of sustainable practices to overcome barriers to entry into large supply chains will only matter to forward-thinking owner-managers. This means that only the most all-rounded finance professionals can develop complete business plan in a way that SMEs can relate to.

There are SMEs who are willing to make their businesses more sustainable and reduce environmental impacts but at the same time there are SMEs for whom the concept of ‘sustainable practice’ is nothing more than an additional cost.

ACCA praises the proposals given in the publication on improving resource efficiency, facilitation to get finance for such improvements, adopting greener value chains, green entrepreneurship promotions, facilitating market access for green SMEs. However the real challenge is their implementation.