• Sustainability
    • General Sustainability

5 steps to take now to become a sustainable company

  • Article

5 steps to take now to become a sustainable company

An increasing number of small- and medium-sized businesses (SMEs) are putting sustainability at the forefront of their operations.

That’s partly because consumers want to work with companies that care about environmental, social and governance (ESG) issues; but many executives and entrepreneurs have discovered that sustainability and profitability are connected. The Centre for Sustainability and Excellence found that the top 25 companies when measured on ESG performance were also among the most profitable in their sectors.

“We are seeing a steady increase of interest nationally in sustainability from our customers,” says Angie Lamarsh, Head of Sustainable Finance, Commercial Banking, HSBC Bank Canada. “Businesses are thoughtful about how their operations contribute to the problems or solutions and are keen to understand how to future-proof their strategy and ensure they are good corporate citizens.”

As important as sustainability may be, you can’t wake up one day and become an ESG-focused operation. What can you do? Here are five sound steps SMEs can think about as they start their journey. Ultimately, each SMEs’ approach will be unique and needs to be decided by their leadership.

Find your motivation

It’s vital to know why sustainability is important to your company, Lamarsh says. Are you thinking about whether your product or service is resilient in a changing market? Are you considering the recruitment and retention of employees? Figure out your primary motivation and how you want your strategy to function within the confines of your company. “The best businesses think about how a sustainability strategy integrates with their overall strategy and includes a top-level view from management,” she explains.

Get everyone on board

One of the biggest pieces of feedback Lamarsh hears from SMEs is that they don’t have the resources required to hire an individual or team to spearhead a sustainability strategy. They also need to ensure a strategy is overseen by someone who understands the ins and outs of their business. In some cases SMEs don’t need to hire for a specific ESG role – they can take advantage of what they have on hand. “Bring together a cross-functional group of team members – people from finance, operations, human resources etc. – who have a mandate to collaborate,” she says. “This group should have broad understanding of the business operations and have the leadership support to be able to influence change across the organization.”

Narrow your focus

The sheer number of ESG metrics available to a company is so daunting that it’s important to focus on those most material to the business. Fortunately, there are plenty of free resources available to help expedite this process, particularly the Materiality Finder that is maintained by the Sustainability Accounting Standards Board (SASB). By simply inputting a sector and sub-sector, the finder offers a snapshot of some of the most important issues to consider. A small mining company, for instance, may have to worry about emissions and air quality, while a marketing firm will need to focus more on employee health and staff diversity. “Identify those key topics and stay focused to avoid getting overwhelmed,” suggests Lamarsh.

Add it all up

Once the team has developed a sustainability strategy, and knows what it wants to measure, it’s time to start collecting data. Lamarsh cautions against making any false or misleading statements about the environmental impact of your efforts, a process more commonly known as greenwashing. Also try to avoid letting perfect become the enemy of good. While there are bound to be growing pains as the collection process plays out, if companies encounter any gaps in their data, they should be transparent about it. “It’s important to be disciplined during the data collection phase so that any analysis and decisions you’re making aren’t solely based on assumptions, impressions or anecdotes,” she notes.

Spread the word

The depth and focus of any sustainability report developed by a business will depend on the SME’s management strategy and goals. It could be as simple as a one-page internal report that updates staff – or the management team – on what has been accomplished and what the next steps will be. “As the team builds confidence with their progress, it becomes a bit of a cycle where you continue to review the scope of your work and evolve the strategy,” Lamarsh says. “We often hear from companies that this cycle results in improvements to their business performance – whether it’s finding operational cost savings, diversifying supply chains or tapping into a new customer market.”

As SMEs start seeing the operational and financial benefits of sustainability, the momentum becomes self-sustaining. Employees who may not have felt like they were part of a sustainable solution in the past suddenly gain a sense relevancy and community within the organization. “It’s exciting to see,” Lamarsh says.

For any SMEs mulling the move, the important thing is not to get intimidated by the journey before it starts. “There’s so much going on but you don’t need to solve all your problems at once, and you don’t need to go it alone,” she notes. “As we transition ourselves, HSBC is here to help our customers with their transition journeys. We’re highly committed to ensuring businesses in Canada have the support and resources they need to get there.”

Today, we and many of our customers contribute to greenhouse gas emissions. We have a strategy to reduce our own emissions and to help our customers reduce theirs. Find out more about our climate strategy in Canada and globally.

Supporting your sustainability transition

We’re helping you to breakdown your sustainability ambitions into actions that can have a big impact on your business.

Need help?

Get in touch to learn more about our banking solutions and how we can help you drive your business forward.