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South African SMEs and the business case for sustainability

Published Apr 19, 2022


THE SUSTAINABILITY concept is a top priority globally and has gained significant traction in recent years. An increasing number of emerging entrepreneurs are entering the business world with a “greener mindset,” being succinctly aware of issues around people and the planet.

There has never been a better time for small businesses to tap into this global shift, and join the ranks of the pioneering entrepreneurs who are changing the meaning of what it means to do “good business”.

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Here are three reasons why sustainability makes good sense, not only in terms of the bigger picture, but also as a strategic tool for growth and development.

Conscious consumers set the pace

Over the last decade, there has been a noticeable shift in the way consumers make buying decisions. Today’s consumers are personally impacted by the increasing global focus on issues such as climate change, environmental preservation and social justice.

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“Conscious consumerism,” is on the rise in South Africa, where shoppers are basing more of their buying decisions on what is best for the greater good. A study conducted by Mastercard showed that 54 percent of South African adults are making better environmental and sustainable decisions. As the world works collectively towards becoming more carbon neutral, this trend will accelerate and lead to inevitable changes in retail.

For small businesses, this trend marks a significant turning point. More consumers are basing their buying decisions on whether brands use sustainable materials, employ environmentally friendly production and manufacturing processes, and provide safe and fair working environments for their employees. Small businesses wanting to futureproof their business models by strategically aligning with this movement, have the potential to reap unprecedented returns.

The rise of green procurement

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The public sector, as one of the largest consumers in the economy, spends billions of rands on procurement. And the past few years have seen the South African government taking a “greener” approach to procurement, to stimulate and drive markets for sustainable production and consumption.

At the centre of this transition are Green Public Procurement (GPP) policies, which consider a number of environmental criteria. Municipalities, state institutions and local government bodies now have a vested interest in working with suppliers who are actively working towards reducing their carbon footprint and making a positive impact on the wellbeing of their communities. This presents a golden opportunity for small businesses that wish to become state suppliers to adopt greener practices and in doing so, increase the appeal and viability of their businesses to state procurement officers.

Employee wellness and the link to profitability

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There is a proven correlation between employee health and wellbeing, and sustainability. This is particularly true within the corporate space, but it is a philosophy that is also slowly filtering into small businesses and their teams.

Sustainability issues within the workplace extend to the safety and security of working spaces and the environmental impact of working processes, to the sustainable use of office supplies and fair compensation. Furthermore, a number of studies have linked a positive workplace environment and culture to profitability. Employees who are happy, are simply more productive. And this has a knock-on effect on human resource issues like talent attraction and staff retention.

The business case for sustainability in terms of employee wellness is therefore compelling. Small businesses do not have to wait until they have scaled their businesses to apply this principle to their operations and staffing.

Get the basics right in the beginning, and when you grow, that same positive culture will grow with you.

Ben Bierman is the managing director of Business Partners Limited.


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