Sustainability and the Value Chain
Sustainability and SMEs
In the UK, SMEs contribute 43-53% of the UK's business-related GHG emissions, which translates to about 29-36% of the nation's total emissions
Scope 3 emissions, which include all indirect emissions occurring in a company's value chain, often account for more than 70% of a business's carbon footprint.
Supply chain emissions have been reported to be as much as 26 times higher as than operational emissions for corporations
Pressure From The Top
Today, large corporations are mandated to produce a sustainability report. H&M, the fast-fashion giant, H&M, the fast-fashion giant, has finally published their sustainability report after multiple delays.. We won’t dissect their report in detail, but I just wanted to share a couple of pertinent pieces from it here.
“Decarbonising our value chain remains a core focus. In order to speed up our sustainability actions we continue to work closely with suppliers to support them to decarbonise, transitioning to renewable energy sources and improving energy efficiency.”
This highlights the thing I’ve been saying for ages. Pressure on SMEs to decarbonise, increase waste diversion rates, improve employee wellbeing, and drive sustainability won’t come from governments. It will come from the value chain.
As a large business, all of H&Ms Scope 3 emissions has to be reported on. That includes the emissions from their value chain.
So, if you’re an SME that supplies to a large company (and it doesn’t have to be the H&Ms or Amazons of the world), you will start to see pressure from your value chain to show what you’re doing to drive sustainability in your business.
“In 2024, our scope 3 greenhouse gas emissions decreased by 24 percent compared to our 2019 baseline. This sets us up well to reach our long-term goal of reducing greenhouse gas emissions by 56 percent by 2030.”
I’ll say it again just to make sure the point lands. Pressure will come from the value chain for SMEs to drive sustainability. If you’re an SME without a sustainability report; without a decarbonisation goal; without a policy on how to reduce your carbon footprint, you will be at risk of losing contracts.
Conversely, if you’re a head of the game – the future will look quite different!
Employees Can Be Your Greatest Asset
Beyond supply chain pressures, internal engagement is another critical driver of sustainability success.
Your employees know their role in your business better than anyone else. Through targeted engagement, education and upskilling, you can start to really drive sustainable changes across your company – for the long-term.
From your HR manager who took a short course on Forced Labour, to your Procurement manager who was upskilled on sustainable procurement, to your facilities manager who learned about the circular economy – not only are you upskilling your workforce for the benefit of your business and your clients, but you’re empowering your employees to make these decisions, improving their sense of belonging, impact, and a feeling of being valued for what they can do.
Did you know that your employees commute to and from work, and the emissions they produce while working from home are calculated as part of your Scope 3 emissions?
As an employer, you cannot tell your team how to travel to and from work. You cannot tell your remote workers how they should power their homes. But through broader engagement, recognition, and opportunities, you can empower them to make more sustainable decisions for themselves.
If you’re an SME and you’re starting to feel the pressure from your value chain to drive sustainability but have absolutely no idea where to start – then get in touch.
We’re here to support you and your team – regardless of how big or small it is – to drive sustainability and empower you for long-term success.
Don’t wait until your clients start asking for sustainability reports—get ahead now. Book a free 30-min call or explore our Sustainability Review to future-proof your business