Small and medium-sized enterprises (SMEs) can improve their profitability and their environmental impacts by implementing a certified environment management system (EMS), according to Defra.
A study by the environment department found that two-thirds of participating SMEs had either improved sales figures or expected to do so as a result of implementing an EMS certified to either ISO 14001 or BS 8555/Acorn.
Audits of the 31 SMEs studied revealed that more than one-third had increased sales by an average of £14,900 per million pounds of turnover.
The research also found the majority had been able to achieve tangible cost benefits, with firms making an average annual saving of £4,875 per million pounds of turnover.
However, levels of savings varied considerably, leading the researchers to conclude: “those SMEs that invested more in implementing the EMS upfront achieved the highest payback.”
Defra estimates that, based on the level of savings and the extra sales reported during the research, SMEs can achieve payback on installing an EMS and achieving certification in as little as one month.
Those firms participating in the research were also able to demonstrate improved environmental impacts, with 28 of the 31 participants reducing their carbon emissions by 39 tonnes per million pounds of turnover.
IEMA welcomed the report as highlighting the business benefits for SMEs in adopting an EMS as well as the important role of smaller businesses in the UK’s broader sustainability agenda.
“SMEs are a vital part of the economy and this research demonstrates that effective environment management helps to support jobs and enable businesses to grow sustainably, as well as reducing environmental impacts,” said Martin Baxter, IEMA policy director.
Toby Robins, sustainable development director at Wiles Greenworld, an SME with an 14001-certified EMS, said Defra’s study confirmed that an EMS can lead to new business opportunities. “There is a huge knowledge gap in many SMEs when it comes to the business benefits of embracing environmental management,” he said.
“These figures show that firms willing to look at the issues and opportunities offered by an EMS have found significant commercial benefits can be obtained.”
A spokesperson from the Federation of Small Businesses said: “Being resource-efficient can help to drive down costs during these difficult economic times and managing energy use can help insulate a firm from volatile fossil fuel prices.
“It is, however, up to an individual business to decide whether an EMS is right for them. But, with more firms using their green credentials as a way to distinguish themselves from their competitors, putting such a scheme in place could help manage that.”
A survey of SMEs in 2009 by NetRegs, the now defunct online information source on environmental good practice, found that only 4% of the 7,000 small businesses responding had an EMS in place.
Most of those surveyed said an EMS was either “no use” or of “little use” to their business. NetRegs said the complexity and cost of an EMS was putting SMEs off.
