According to the UK Parliament, the usual definition of small and medium-sized enterprises (SMEs) is any business with fewer than 250 employees. There were 5.7 million SMEs in the UK in 2018, which was over 99% of all businesses in the United Kingdom.
Whew! What a powerhouse, which drives the UK economy. Indeed, UK SMEs are uniquely situated to address some of the world’s largest challenges. SMEs are the key to delivering the crucial sustainable development goals (SDGs). Clever governments can mobilise the machinery of these SMEs to achieve these elemental long-term objectives illustrated by the SDGs.
In addition, legislation is adding clarity to aligning environmental, social and governance issues to business risks. Given the size of the SMEs market and the nimbleness of these types of actors; the reaction time is quicker in addressing new regulatory demands and real success in the SDGs can be seen.
Arguably SMEs are more important in deploying changes and their impact on how the SDGs are addressed is elemental.
It is well-known that large multinational companies book-end each end of the value chain, whereas, SMEs are in the middle, supplying and commissioning goods, services and transforming raw materials.
SMEs are community-facing, are fundamental to the production process and are expected to deliver trusted and transparent data to the reporting cycle of multinational companies. In principle, they are the glue of the economy, and thus need to be an integral part of delivering the SDGs at every level and region.
Bloomberg new economy solutions has identified that private sector leaders across all sectors and regions are recognising that sustainability factors (like those highlighted as part of the SDGs) are very likely to affect company growth, opportunities and risks over the next few decades.
In order for organisations to address these sustainability demands, a sustainable supply chain must be easily available, with monitoring and measuring how and when the supply chain, and thus SMEs, deliver as part of the sustainable strategy.
According to Bloomberg, there are three main barriers which organisations face when measuring and monitoring the impact of their supply change on the organisation’s sustainability strategy. One is the need to monitor across the supply chain; where the biggest sustainability effects occur and when – this takes into account both primary suppliers and subcontractors. Another barrier is understanding the complexity of sustainability issues; how they differ by sector, product and region. The third significant barrier is understanding and identifying what ‘good’ looks like in promoting sustainability.
Measuring and monitoring of supply chain actors is challenging, especially given the depth and variety of supply chain participants. Buyers, such as those large multinationals, have a significant influence on the activities of the supply chain, and thus on a significant number of SMEs.
There are a number of additional challenges and risks to organisations, when companies look to address sustainability issues in their supply chain. They include but are not restricted to:
- Collaboration: between different buyers, in different regions for a variety of sustainability issues.
- Target setting: Overall targets which encompass products, services and operations along with broader sustainability goals.
- Processes: Internal and organisational processes to promote and track sustainability data, to support the management of sustainability issues.
Over the past few years enlightened buyers have been diligently working with hundreds, if not thousands, of supply chain participant to improve the sustainability of supply. As the buyers wield immense influence by nature of purchasing power and long-standing relationships.
Challenges, nevertheless, continue, especially when holding suppliers accountable in addressing sustainability risks and offering sustainability opportunities within the supply chain. These challenges of accountability are a combination of effective monitoring and sufficient resources. Reduced resources continue to squeeze how widespread promotion of the SDGs can spread and discourage sustainability improvements. It has been suggested that financing rates could be indexed to sustainability performance[1]; yet with this suggestion the challenge of monitoring becomes even more acute. However, these programmes may provide access to working capital to fund sustainable investments at the supply chain level.
The G17Eco platform, part of World Wide Generation, is a platform for the digital collection, aggregation and dissemination of trusted sustainability data between all stakeholders in the value chain. G17Eco is the engine room for all key players across various sectors – such as organisations, investors, assurers, regulators and rating agencies, as well as supply chain actors – to be able to come together as one ecosystem and share trusted data between each other. G17Eco will empower faster and more effective decision making in investment, divestment, managing risk and creating sustainability products and solutions at scale.
The G17Eco platform is underpinned by distributed ledger technology which gathers trusted and transparent data which can monitor and track supplier activities, such as supplier sustainability practices and codes of conduct.
G17Eco is the solution to provide trust between all partners across industry sectors and aims to bring us together as one global ecosystem with one mission and one focus to deliver the SDGs by 2030. G17Eco will enable the collection, processing and dissemination of data between all stakeholders, faster, cheaper and with greater provenance. The technology solution to monitor and measure sustainability progress in the supply chain is here. If the SDGs are to be successfully delivered, we all must lead, G17Eco has developed the technology to monitor and measure how well we all lead.
[1] The price of financing for a supplier increases or decreases over time linked to a supplier’s sustainability performance. A couple of examples include the Walmart-HSBC partnership and the Levi’s Strauss’s Global Trade Supplier Finance Program.
