The event on ‘Supply Chain Resilience and the Environment’ demonstrates the growing recognition from senior figures in Government of the need to address sustainability in all businesses, including SMEs
The session on Tuesday evening was chaired by Barry Gardiner MP, member of the House of Commons Select Committee on Energy and the Climate Change, and featured a panel of industry experts.
Iain Wright MP, Shadow Minister for Business, Innovation and Skills, highlighted the recent increase in natural disasters as particularly concerning and cited the tsunami in Japan and and the floods in Thailand as evidence – examples that I used myself in a recent blog post.
Mr Wright was ultimately alluding to the risk that has developed within certain supply chains by which one particular component – for example semiconductors – is almost exclusively sourced from one factory or region.
Lose the factory and the entire supply chain is jeopardised.
Another concerning situation, he said, is the fact that around only 8% of companies had asked to see their suppliers’ sustainability plans.
After the panel had addressed issues surrounding resource security and environmental footprinting, questions were taken from the audience, which consisted of individuals from an impressive range of leading businesses and organisations, for example Veolia, Skanska, the CBI, British Gas and the RSPB.
One of the central themes concerned the challenge of integrating SMEs into the sustainability agenda.
After all, SMEs, ironically, are the elephant in the room. Individually small, but cumulatively responsible for a huge part of many companies’ environmental impact, not to mention integral to the overall security of many everyday products.
Responding to the questions, Mr Wright stated that procurement in central and local government could drive the issue forward and that the issue of how contracts are awarded merits greater consideration.
He also expressed his disappointment that his suggested amendment to last year’s Regulatory and Enterprise Reform Bill, which would have forced the Green Investment Bank to take greater consideration of innovative SME when awarding contracts, had been rejected.
Duncan Wardrop from Lafarge suggested that Chambers of Commerce provide a good avenue of communication between supply chain owners and their SME suppliers, and stressed the importance of not scaring SMEs with unreasonable sustainability requests.
Ian Bowman, Head of Corporate Responsibility at Siemens, said that that suppliers needed to be brought into workshops at an earlier stage of procurement so that SMEs are treated more as partners.
This is a strategy, incidentally, that Asda is pursuing with its Sustain & Save Exchange – a supplier forum to enable discussion and knowledge sharing of important issues.
Strategy for SMEs
While the comments made about SMEs were welcome, it seemed that no one had a particularly focused or effective strategy to deal with the issue.
As Mr Gardiner himself admitted to me after the session, the questions regarding SME engagement had (for the most part) been “spectacularly dodged”.
There needs to be a concerted effort to help SMEs become more sustainable – not only because they are critical to many of our supply chains, but also because they lack the time to worry about anything other than the ‘business essentials’.
Communicating that sustainability is one of these essentials is the first step.
The second is enabling SMEs to measure their environmental impact and then improve on it without breaking the bank.
For example, commercial landlords should be required to provide tenants with unbundled environmental data by installing smart meters and other monitoring equipment.
Providing SMEs with free and easily accessible tools, such as amee, or achieving the Responsible Business Standard are other important steps.
A clear message, for example from Government, that such action will help to win new contracts would also be welcome.
SMEs are not only essential to the UK’s economic recovery, but will also play a central role in reducing the overall environmental impact from the business community. They cannot be ignored for much longer.
Many thanks to the Associate Parliamentary Sustainable Resource Group for organising the event, as well as their colleagues Carbon Connect and the Westminster Sustainable Business Forum – all part of non-for-profit think tank, Policy Connect.