Sustainable Development, Finance and Innovation 

Blog by Lee Dinsdale, Managing Director of Logros

In partnership with Logros, pro-manchester is supporting an MBA research project about the adoption of sustainable development initiatives in SMEs.  If you are the owner of an SME (Small Medium Enterprise) we would really welcome your support as next week we will send a short survey. This will gives us the opportunity to understand what is the relationship between SMEs, sustainability and the various factors that either encourage or limits the adoption and implementation of initiatives. This will also help to inform us how can we can help SME´s moving forward with our program of events.

A review of news in relation to sustainable development, finance and innovation and how this can relate to SMEs .

How well aware are you of the UNs Sustainable Development Goals

As the cost of living continues to rise affecting the cash flow of both consumers and SMEs putting real pressure on decision making, wellbeing and the economy, attention is now turning to what is the resulting impact on Sustainable Development initiatives and consumer buying behavior.

Combined with this, there is rising uncertainty on the effectiveness of the UNs Sustainable Development Goals SDGs.  In 2015 the United Nations agreed on 17 Sustainable Development Goals as a central framework for sustainable development worldwide. Combined with the 17 sustainable development goals there are also 169 specific targets to be reached by 2030 and now questions are being asked if they have made any impact in addressing global environment, social and economic challenges.

Bierman et al 2022 suggests that although there has been a lot of discussion regarding sustainable development, evidence of resource allocation from these political discussions is limited.  It is therefore not surprising that a recent survey found that from1000 British SMEs less than 2 in 10 are aware of the UNs SDGs and half of large enterprises also don’t know what they are. Across all businesses of all sizes SDG awareness was highest in the manufacturing, IT and telecoms and medical sector and lowest in hospitality and leisure, education, media and sales. The survey also found that companies rarely had established sustainability goals, time bound with targets meaning they are struggling to create tangible results in terms of progressing their own sustainable development.

What has the UK Government done for sustainable development for UK SMEs?

Research suggests that businesses lack the understanding and knowledge in how to deliver credible targets. Therefore a question that is relevant in relation to sustainable development amongst UK SMEs is what is being done by the UK Governments to support the delivery of these goals?

Currently, it appears expectations to adopt sustainable products, services and practices are coming from customers and employees.  This means SMEs will face greater scrutiny on their operations but there is limited research, support and guidance in how to operationalize sustainable development.

The sustainable development landscape is changing rapidly and although ethical and sustainable investing has been around for many years interest has accelerated over the last 2-5 years. More research focusing on sustainable development in the UK is becoming important and because of the Government’s commitment to reach a target of net carbon zero by 2050 attention is turning to Small and Medium Enterprises (SMEs) due to their role in the UK Economy Gunjan et al 2022

Chatzistamoulou et al 2022 asks the question what factors affect the sustainability transitions and rather than focusing on the benefits of sustainable development efforts should focus on adoption instead. This can be enhanced by integrating new technology, financial support, specialist consulting and the attitude of the country towards SDGs

There is currently little evidence on what impacts the commitments to actions. The study highlights that SMEs initial adoption of SDGs is reducing energy usage, minimizing waste and reducing raw materials and the former being even more relevant with the rising energy prices.

What is the importance of Sustainable Finance

Sustainable finance has emerged as financial innovation connected to sustainable development. Banks are being encouraged to lend money under terms such as Green Finance.  However, it is thought SMEs currently do not have the resources, knowledge or perhaps desire to play their part yet no matter how much banks promote green finance. Kovacevic A 2022 suggests this can be due to factors such as lack of decisive leadership, a lack of trust in the process and fear of change with perceived loss of jobs.