As the backbone of the European economy, SMEs are increasingly in the centre of the focus on sustainable transition.
This is because the relationship between SMEs and sustainability is increasingly interdependent, and it is no longer possible to ignore the impact of sustainability discussions on SMEs’ business and markets. The sustainable transition needs the involvement of SMEs, while long-term resilient SME success cannot be achieved without the integration of sustainability considerations into their business strategies.
Thinking about sustainability can feel overwhelming for many small businesses that deal with everyday challenges and business survival, especially given the current unprecedent COVID-19 crisis (see our publication COVID 19: 5 key steps for accountants to guide SMEs through the crisis). Yet, the pandemic has demonstrated the urgent need for more resilient and sustainable business practices and supply chains.
As SMEs’ trusted advisors, professional accountants can play a key role in this vitally important area and help SME owner-managers to think about their potential sustainability risks, mitigate them and tap into opportunities that stem from the sustainable transition.
This paper – the second one in our SME risk management series – aims to explain how and why sustainability is important for SMEs. It will explore the opportunities and risks that small businesses are facing in this area, including risks from not embedding sustainability into their business models. It will then elaborate how their accountants can help them integrate sustainability into their business strategies and operations. The risks are multi-faceted and may emerge from not meeting the expectations of key stakeholders (consumers, regulators, business partners, banks etc.), having weaknesses in the supply chain, being over-reliant on certain scarce resources and more.