Sustainable Development: A New Frontier for SMEs

Introduction

Climate change, pollutants, sustainable development and public health have become increasingly more relevant issues which continuously get addressed and discussed by governments and entities all over the globe. Such entities and countries aim to establish sustainable development policies which discuss and dwell on the previously reported issues. Through the adoption of policies and recyclable methods they hope to encourage and aid the responsible consumption of natural resources so as to reduce the creation of waste. Furthermore, the generation of sustainable communities is encouraged so as to safeguard and protect the population’s health against the risks associated with different types of pollutants. However, the proposed and adopted policies not only serve as guidelines to countries and public entities. They are also made available to ensure that businesses contribute and integrate such policies to promote the integration of environmental concerns and sustainable development practices within their business (European Commission, 2021).

However, there has been an increased focus amongst governments around the globe to promote further development and expand the adoption rate of environmental development and policies amongst small and medium enterprises (SMEs). SMEs are often responsible for the majority of the environmental impact of specific regions. For example, Hillary (2017) presented evidence which suggests that SMEs account for 70% circa of industrial pollution worldwide. Furthermore, Calogirou et al (2010) offered evidence which suggests that Small to Medium Sized Enterprises (SMEs) contribute up to 64% of the environmental impact of the European Union. SMEs have become driving forces of the economy. Consequently it would be blindsided not to address such entities and promote their involvement within the social and environmental issues. Some countries have recognized SMEs importance and have made an effort to implement and better represent SMEs and how their contribution could benefit the local communities as well as the environment (Pimenova and Van Der Vorst, 2004, Blundel et al, 2013).

Despite the aforementioned figures and the potential benefits associated with the implementation of sustainability management tools (Cantele & Zardini, 2020; Testa, Boiral & Iraldo, 2018) SMEs struggle to implement and integrate sustainability within their business. The tools and instruments discovered and proposed by the literature and professionals all over the globe are often unknown to small and medium enterprises’ owners (Johnson & Schaltegger, 2015).

Consequently, to support SMEs in the adoption of sustainable practices, this chapter aims to introduce, guide and provide some useful tools which can then be utilized by readers and professionals operating within SMEs to maximize the effectiveness of their sustainability approaches while also providing knowledge on how the implementation of sustainable practices could be integrated within their businesses. To do so we aim to conduct a narrative literature review which addresses the following question: Which specific sustainability management tools have been proposed and observed by previous researchers within SMEs’ context?

Furthermore, few recommendations will be made based on what peer reviewed articles have found to be beneficial to SMEs’ sustainable development. Moreover, the role of disclosure and reporting will be analyzed to further understand how such elements and practices affect stakeholders perceptions, as well as, firms’ competitive advantage. Finally, barriers to SMEs’ adoption of sustainable practices will be discussed to provide insights into which factors are detrimental to the wider adoption of sustainable development of SMEs.