Small and medium enterprises (SMEs) play a key role in the production of goods and services. In the 36 countries of the Organization for Economic Co-operation and Development (OECD) of which Canada and the United States are members, they make up more than 95% of all businesses and provide about 2/3 of jobs . These companies produce almost everything we buy and use, hence their essential role in our society. Nevertheless, this role is accompanied by a certain social and environmental responsibility. They produce what we consume, but also what we throw away by playing a colossal role in the problem of climate change . Although the environmental and social footprint of a single SME can be relatively small, their significant volume translates into a notable impact when agglomerated. In Europe alone, SMEs are responsible for 60-70% of industrial pollution .
In Quebec, in 2019, 14% of total energy consumption was attributable to the commercial and institutional sector. The main energy sources used are electricity (60%) and natural gas (31%) . Waste management, transportation, production of goods and daily operations are other spheres of businesses that are also sources of GHG emissions and other pollutants. A survey conducted by CPA Canada and FEI Canada on how Canadian companies manage their GHGs found that 63% of them do not track their GHG emissions and 67% of companies have not set a voluntary GHG reduction target and do not plan to do so .
Yet their large volume can serve as an important driver in a transition to a green economy. A green economy minimizes the environmental impacts of activities while improving the well-being of society through job creation and economic growth. Although economic growth has led to a degradation of natural resources and ecosystems , it is possible to support sustainable development if it is logical and based on science.
Flexible sectors; compressed emissions
Thus, if all OECD SMEs began to review the management of their supply chains, energy use, residual materials, transport, and production practices, then the agglomerated impact of these changes would be significantly positive for the climate. They are central to achieving environmental sustainability and this transition of entrepreneurial practices and values offers an opportunity for companies to offer goods and services with interesting environmental value . In Quebec, energy consumption in the residential, commercial, and institutional sectors is responsible for the emission of 8.4 megatonnes of CO2 . Nevertheless, this sector presents a relevant and interesting GHG reduction opportunity. More than 70% of the associated GHG emissions are compressible if fossil fuels are abandoned, and energy-efficient designs are incorporated .
Improving the management of residual materials in companies is at the heart of the problems of wasted resources, pollution and GHG emissions . By implementing measures to sort and recycle these materials, there is a reduction in their quantity, which is currently buried. These practices lead to a reduction in methane emissions and an increase in reused and recycled materials.
The weight of transport in the GHG emissions balance is heavy: 36.5 megatons of CO2. 83% of the energy used in the transport sector is attributable to the transport of goods and personal vehicles . Thus, better management of these in companies or the modification of the source of supply materials to reduce the distance between raw materials and final product as well as the electrification of these, if possible, are relevant solutions in the reduction of GHG emissions. The proposed areas of action are concrete examples of actions that may seem futile when applied by a single company, but they find a relevant role when applied collectively.
Transition: expensive and complex?
Traditionally, there is a stigma of financial burden associated with the transition from traditional entrepreneurial practices to more environmentally conscious practices. There is a tendency to believe that the implementation of these practices is very expensive and very complex. However, there are interesting financial opportunities such as tax breaks and government subsidies. Then, better waste management reduces waste treatment costs and supply costs . It is noted that some companies would like to change their practices, but that they are hampered by the lack of expertise and knowledge in the field.
Most of the companies implementing these voluntary measures are motivated by internal values. They are aware of their impact and current challenges. For these companies, the measures that are being put in place also represent new market opportunities and a discovery of modulable areas that have the potential to reduce the cost of daily operations . Better planned waste management reduces waste processing costs as well as raw material supply costs . Environmentally conscious practices do not systematically lead to increased costs. For example, if a company works with materials that are more efficient than the materials initially used, then the amount of supply is reduced and so are the associated costs. There are several external benefits such as competitive marketing opportunities, reduced pollution and GHGs, and a positive public image.
A survey of Ohio SMEs that have implemented environmentally conscious adaptative measures through behavioral changes (waste, transportation, and energy) have seen significant benefits in reducing operational costs, in their company’s reputation, in increasing their sales as well as in community well-being .
At Will, we support these companies in the implementation of relevant and feasible measures by offering our internationally recognized expertise and knowledge. By calculating the initial carbon footprint of companies, it can be established which areas of activity require the most attention and adaptation measures. Then, we transfer these efforts of reduced environmental impacts on voluntary carbon markets, in the form of carbon credits. The companies we work with receive the money from the sale of these credits. In other words, when companies work with us, they receive financial benefits for their efforts to reduce climate impacts. The scope of these behavioral changes may seem small, but Will managed to reduced Quebec GHG emissions by more than 5.2 million tons between 2010 and 2018 by working to improve energy use and waste management among SMEs. It is in collectivity that climate action makes sense!