Managerial folklore has it that, ‘if you can’t measure it, you can’t manage it’. As everyone knows, almost all businesses are small. However, one of the most striking things about the environmental impact of smaller organisations, is that there aren’t really any consistent and reliable measures. This glaring gap in our knowledge is evident in recent a European research study. It grapples heroically with the issue, generating a striking claim – that SMEs contribute roughly 64% to the industrial pollution in Europe – but the report also leaves many questions unanswered. Research conducted as part of our own Quarterly Survey of Small Business in Britain found less than one in three small businesses reporting any spending on their environmental impact over the last year, with 12% of small firms measuring their carbon footprint (a proportion that increased to 22% for those with 20 or more employees). But again, these are no more than isolated snapshots, which leave the inherent complexity and dynamism of the situation largely unexplored.
There are many good reasons for the lack of data, including the sheer heterogeneity of small firm population, differences in reporting requirements, and the fact that many smaller firms have far more limited resources than their larger counterparts – not to mention their day-to-day struggle to survive these recessionary times. However, the end result is that we are left with a yawning gap in our understanding. And it’s one that really does need to be filled. Without better information, it is hard to see how countries like the UK stand a realistic chance of delivering on their sustainability targets, not least of these being carbon reduction.
As little as forty years ago, policy makers in the UK woke up to the economic importance of small firms, having got into something of a fluster about an apparent decline in numbers, and started taking them more seriously (The Bolton Committee Report, 1971). In the wake of Bolton, there was a major expansion in small firms and entrepreneurship research. And as a result of all this effort, we now have much more reliable datasets on small business. These cover a variety of economic variables: business start-ups and closures, sectoral and regional trends in sales, profitability and investment, and much more besides. It’s a picture that contrasts sharply with our current state of knowledge about the environmental impact and performance of smaller firms. Of course, there’s plenty of public, private and voluntary sector activity in this arena, with each week bringing new initiatives that range from waste recycling and carbon foot printing. But how do we know if it’s actually working? There are many open questions. For example, are we better off encouraging smaller (and more local) models of enterprise, or are there some occasions when large is more beautiful – at least in environmental terms? It is difficult to see how governments, entrepreneurs and communities can make informed judgements about questions of this kind, unless we engage in a more concerted effort to measure the environmental impacts of SMEs, and to track longer-term outcomes. So are we – in some senses – back in 1971? Should our politicians be commissioning a 21st century equivalent of the Bolton Committee, but equipped this time with a more wide-ranging environmental brief?
This is one of the questions we’ll be considering at a workshop to be held at the Open University in a couple of weeks’ time. Of course, attempting to tackle a field as large as ‘environmentally sustainable enterprise’ is always going to be something of a challenge. I have been airing some thoughts on one small small corner of that field – how should we measure the environmental impact of smaller businesses? – and would welcome your comments.