Small Companies Offer Big Sustainability Lessons
The sustainability arena has been abuzz over the latest corporate responsibility rankings: Newsweek's Greenest Companies and The Boston College Center/Reputation Institute CSR Index.
While such assessments provide valuable insights, most are limited in informational value because they omit smaller companies (and often private and international ones).
Boston College includes only entities at the top of their sector, Newsweek evaluates the 500 largest US and 100 biggest global public corporations. The CRO 100 Best Corporate Citizens, Climate Counts and others are similarly delimited in scope. This focus is mirrored in mainstream media coverage and sustainability professionals' commentaries.
The most common arguments for centering assessments and general attention on large businesses are that they have the biggest impacts given their magnitude, and represent appropriate benchmarks for leadership.
When filters like this are applied, we're left with only a piece of bigger picture that facilitates benchmarking only across similar peers or provides guidance to a subset of the population. Moreover, we lose the opportunity to realize the many ways corporations and stakeholders can benefit by evaluating and communicating practices across industry in its full diversity.
Specific points in favor of a more inclusive, comprehensive view include:
Whenever the field of inquiry is limited, we're sure to miss many of the "best" or "greenest." There are numerous, successful smaller mission-driven enterprises that remain off the ratings radar, united in organizations like the Green America Business Network, the Social Venture Network and the Food Trade Sustainability Leadership Association (full disclosure, my part-time employer). When we screen these out, we deny recognition to worthy leaders, overlook the types of practices and commitments that are necessary to address sustainability challenges at an appropriate scale, and leave aspiring corporations with limited models for improvement.
Larger absolute size doesn't necessarily equate to a larger absolute impact. A small or medium enterprise engaged in practices such as purchasing 100 percent renewable energy or organic ingredients can yield the same absolute benefits as a larger entity engaging in the same practices at levels of 5-10 percent, which is more typical for that segment.
Private and small ventures are often centers of innovation since the former don't have as much pressure to deliver short-term returns and the latter can move more swiftly. Thus, their practices can serve to drive critical change among the broader industry if they're made known on a wider basis. International entities from regions with more advanced policies and infrastructure can also be more advanced, such as those in European countries with requirements around Extended Producer Responsibility and chemical use (e.g., REACH).
Smaller companies have limited budgets and have to budget strategically and creatively to resource sustainability programs while ensuring sufficient support for core business activities. Those investing significantly in their mission while succeeding in the marketplace represent a learning model for larger enterprises, demonstrating that it's always possible to find the funds and staff needed to implement higher-level social and environmental practices by allocating across all areas more efficiently.
Young, private enterprises aren't necessarily more responsible. They shouldn't be free from scrutiny, and they need relevant guides for improvement. Helping nascent companies establish good practices early on is critical, given the general principle that it's easier to incorporate sustainability in the design phase versus retrofitting later.
Recognizing emerging ventures with exemplary practices can help garner support to grow businesses that represent the critical solutions we need to address our pressing sustainability challenges, and the direction the broader industry is seeking.
It's critical to show industry, consumers and other stakeholders what's possible now so they can align their purchasing and practices toward better outcomes. Walmart has been championed for its recent announcement to increase local food purchasing, and its goals around zero waste, renewable energy and other areas. Whole Foods Market has purchased RECs to cover 100 percent of its electricity for five years, installed renewables on stores across the U.S., prioritized local sourcing (and organic) since its founding and set significant resource conservation and zero waste targets years ago, making Walmart a follower rather than a leader. Whole Foods' lesser size has unfortunately kept it off the center of the radar, representing a missed opportunity to inspire broader progress earlier in the game.
Better practices offer a marketplace advantage. All companies would do well to tap these. For example, the Organic Trade Association reports that organic food purchasing has continued to grow across the economic downturn, despite higher prices for these items. Early adopters are benefitting from their longstanding use of organic methods.
Operations of all sizes, geographies and ownership structures provide valuable models for sustainable business. It's critical to be truly inclusive to evaluate our progress and potential, and define real leadership.
Melissa Schweisguth is a freelancer focused on socially responsible and sustainable business consulting, writing and media relations. She is director of membership development and education for the Food Trade Sustainability Leadership Association.
Image CC licensed by Flickr user Ewan-M.