EMS can improve SME profitability

25th November 2011


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  • Certification ,
  • EMS ,
  • Management ,
  • Management/saving ,
  • Reporting

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IEMA

Having a certified environment management system (EMS) can help smaller companies cut costs, attract new business and reduce CO2 emissions, confirms a Defra study.

A nine-month research project examining the environmental and business performance of 31 small and medium-sized enterprises (SMEs), found that more than a third experienced increased sales after implementing an EMS, with a further third confirming they expected to do so in the near future.

The study, which audited the firms after they had certified their EMS to either ISO 14001 or BS 8555/Acorn, reveals the majority were able to reduce their costs with an average annual saving of £4,875 per million pounds of turnover. However, levels of savings varied considerably with Defra concluding “those SMEs that invested more in implementing the EMS upfront achieved the highest payback”.

SMEs investing more on establishing their EMS achieve average costs savings of £4,875, and Defra estimates that they achieve payback on establishing their system in just three months. For firms already experiencing an upturn in business, payback time reduced to just one month – with organisations quoting additional sales of almost £15,000 per million pounds of turnover.

The research also reveals tangible environmental benefits with 28 of the 31 participants able to reduce carbon emissions by 39 tonnes per million pounds of turnover.

In publishing the findings, environment minister Richard Benyon said: “All businesses should be planning green and growth together – strategic thinking about environmental management leads to more sales, bigger profits and a more attractive business to clients and investors.

IEMA welcomed the report as highlighting both the benfits for SMEs in embedding effective environmental systems, but also the important role of smaller business in the UK’s broader approach to sustainability.

“SMEs are a vital part of the economy and this research demonstrates that effective environmental management helps to support jobs and enable businesses to grow sustainably as we transition to a greener economy, as well as reducing environmental impacts,” said Martin Baxter, IEMA policy director.

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