SMALLER FIRMS TURN TO SUSTAINABILITY FOR GROWTH AND INVESTMENT

30% of smaller firms identify sustainability as a top three long-term objective

59% say sustainable business practices will improve their profitability

27% are prioritising investment to become a more sustainable business

MUMBAI,  21 December,  2017 (GPN) : Almost a third (30%) of smaller companies[1] consider having a sustainable impact on the community and environment as one of their top three long-term objectives, data from HSBC Commercial Banking shows.

Indonesia (43%), UAE/Saudi Arabia (36%) and Australia (34%) are the countries where firms are most likely to focus their long-term strategies on this, as well as companies in the Mining (42%), Utilities (38%) and Manufacturing (37%) sectors.

In the poll of more than 1,400 decision-makers across 14 countries, half (50%) recognise their customers are demanding products that consider environmental and social impacts. This can act as a competitive advantage. In fact, 59% of firms say that sustainable business practices will improve their growth and profitability.

Companies in the Manufacturing sector (72%) and in India (68%), Saudi Arabia (66%) and Canada (66%) are the most likely to recognise this commercial benefit. Almost a third (30%) of companies globally also believe that becoming a more sustainable business will contribute to improving their financial performance over the next three years.

To unlock further growth, more than a quarter (27%) of smaller companies have prioritised investment to become more sustainable, with firms in Saudi Arabia (34%), Hong Kong (33%) and Australia (33%) the most likely to have done so. In terms of sectors, Mining (36%), Professional Services (34%) and Utilities (33%) show the greatest commitment to becoming more sustainable in terms of investment.

Commenting on the findings, Bryan Pascoe, Global Head of Client Coverage, HSBC Commercial Banking, said: “The importance of building sustainable practices into their immediate and long-term strategies has become a no-brainer for business leaders. That’s what customers are demanding, and that’s how businesses will find growth to compete in today’s economy. It is positive to see smaller firms are not only aware of sustainability as a potential game-changer, but many are already capitalising on trends and taking action.

“What we, at HSBC, are doing is helping these firms take this further. That means working with them to look at their entire ecosystem to identify efficiencies in their supply chains, adapt their product offering, and meet the sustainability standards expected by their buyers.”

 

% of smaller firms having sustainability in their top 3 long-term objectives

% of smaller firms saying sustainable business practices will improve their growth and profitability

% of smaller firms prioritising investment to become a more sustainable business

Global

30%

59%

27%

Australia

34%

61%

33%

Canada

29%

66%

25%

China

32%

54%

23%

France

22%

56%

27%

Germany

26%

62%

25%

Hong Kong

30%

56%

33%

India

28%

68%

19%

Indonesia

43%

62%

31%

Mexico

24%

55%

23%

Saudi Arabia

36%

66%

34%

Singapore

26%

54%

25%

UAE

36%

44%

23%

UK

19%

60%

27%

USA

28%

56%

28%

On average, only 18% of smaller firms rated sustainable actions as important to their business today, however nearly half (46%) said they are important to them in the short to medium term (next three years). The action that has gained more importance going forward for these companies is to set up a dedicated team to be accountable for implementing Corporate Social Responsibility (CSR) initiatives.

An important area businesses can address now to become more sustainable is to find operational efficiencies in their supply chains. Almost half (47%) of leaders identify this as a contributor to their company’s financial performance over the next three years.

Practical steps that firms can take to put sustainability at the heart of their business include:

  • Looking for efficiencies in their supply chain that can be both green and cost-effective. For example, solutions which mean that raw materials travel shorter distance can help cut emissions and save transport costs
  • Adapting to customers’ changing preferences by changing their business model. Environmentally-conscious consumers may respond well to products sourced and produced in a sustainable way, which could boost revenues
  • Investing in renewable sources of energy such as wind turbines and solar panels as part of broader efforts to manage their environmental footprint 
  • Introducing and enforcing codes of conduct and policies on issues such as human rights and relationships with local communities
  • Reporting on Environmental, Social and Governance (ESG) performance.Transparency can be an important first step in winning consumers and investors’ trust

For its 2017 survey HSBC polled decision-makers of companies with between 200 and 2,000 employees in Australia, Canada, China, France, Germany, Hong Kong, India, Indonesia, Mexico, Saudi Arabia, Singapore, the UAE, the UK and the US.  

Ends

About the Author

Sachin Murdeshwar
Sachin Murdeshwar is a Sr.Journalist and Columnist in several Mainline Newspapers and Portals.He is an ardent traveller and likes to explore destinations to the core.