The Future Of Impact-Driven Change: Small Businesses And Sustainability Goals By supporting and investing in MSMEs, many of whom already prioritize advancing global frameworks like the SDGs, public and private sectors are investing in a more sustainable future for the world.
By Hisham Itani
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Across the world, micro, small, and medium-sized enterprises (MSMEs) provide essential services to both the public and private sectors, and help drive innovation across the globe. The diverse range of small businesses that help support governments and companies are crucial for economic growth, but also for sustainable and inclusive livelihoods. From accounting firms to credit unions, to tech support and beyond, MSMEs and contractors strive to support global efforts and change.
To provide a framework for this change, the UN Sustainable Development Goals (SDGs) were adopted in 2015 to help focus efforts on creating more sustainable countries and communities worldwide. These 17 Goals are often used to guide country or multinational company (MNC) policies and initiatives, and they are also used as a standard for environmental, social, and governance (ESG) reports. And these goals cannot be accomplished without the support of MSMEs.
New MSMEs are emerging every day to help provide necessary services and offerings, and the rise of ESG, which is inherently connected to the SDGs, has created a whole new field for evolving businesses. These enterprises can help achieve the SDGs through flexibility, innovation, and leading with purpose. They are the future of impact-driven change, and other organizations will need to look toward MSMEs for leadership in this new social enterprise landscape.
The current focus and investment into positive global impact is undeniable. Consumer pressure and demand for sustainable products is growing, along with a surge in ESG investments. Banks in the European Union are now mandated to report on green investments and disclose climate risks, and public companies in the US may soon be mandated to provide ESG reports by the Securities and Exchange Commission (SEC). Despite the lack of mandatory ESG reporting in most countries and industries, around 20% of Forbes 2000 companies already have some form of climate disclosures in place.
Related: The Time Is Now: More Business Leaders In The Middle East Need To See ESG As A Catalyst For Growth
From shaping policy to influencing consumer choices, private enterprises have always played a substantial role in shifting decision-making. They are increasingly prevalent to shape our future, and help cultivate a more sustainable world. However, they cannot do so without support from MSMEs. Today, many small companies are established with a built-in foundation in ESG, establishing more progressive policies from the onset, and providing more inclusionary services.
The emergence of ESG is unfolding in a similar pattern as the development of the digital revolution. In the era of Web 1.0, when the internet became publicly available, many believed it to be a trend. Yet, in the last two decades, we have seen large companies become obsolete primarily because of their lack of digital strategy. With the ubiquity of online resources and communication today, it would be nearly impossible to create a company with a goal of growth and sustainability without a social media presence or online marketing tactics.
Similarly, many viewed ESG as a temporary trend ten years ago, but in the past few years, we have seen social and political discourse take the spotlight in mainstream media. This has led to an increasing number of people reflecting their views and priorities through their purchasing. This growing consumer pressure paired with looming regulation will continue to make ESG a priority in both the public and private sectors.
This market interest in ESG has helped guide the direction of new business. Most large companies now have sustainability or ESG strategies, but new businesses are well-positioned to harness social enterprise and conscious capitalism from the beginning. The emerging landscape of social enterprise paired with rapidly changing technologies is creating a business environment that is challenging to navigate, and it will require investment in emerging ESG technologies to succeed.
Being smaller enterprises, MSMEs can quickly pivot to provide these emerging technologies and advance the SDGs, because they do not have to wade through bureaucracy or upheave a MNC business strategy in order to make change. They can screen for other MSMEs that hold the same values, and create a value-driven supply chain from conception. At the same time, MSMEs and startup culture breed innovation, which is something we need in order to combat a global climate crisis and promote sustainable development.
The COVID-19 pandemic crippled MSMEs; however, we have already seen a resurgence in reliance on micro-businesses and small- and medium-sized enterprises. Supply chain disruptions and product shortages remain prevalent, but contracts with small businesses that prioritize sustainability can help both countries and companies bounce back. By supporting and investing in MSMEs, many of whom already prioritize advancing global frameworks like the SDGs, public and private sectors are investing in a more sustainable future for the world.
