Responsible Reward and SMEs
Is sustainability at the core of your business strategy? If so, check out the UN Global Compact Network. Its UK branch helps about 12,000 companies and 3,000 non-business signatories to embed the SDGs into their strategies.
The network’s members commit to upholding its 10 principles on human rights, labour, the environment and anti-corruption. Organisations that make the SDGs an integral part of their strategies can expect to become more attractive to customers, employees, business partners and investors.
- the progress made on the SDGs so far
- the performance and investment gaps to reach the SDGs by 2030
- how to use the global goals to build back better post-pandemic
More recently, the network ran a fascinating webinar on net zero for small businesses. It explained that because SMEs represent 90% of businesses worldwide and employ over 2 billion people, they play a major role in the net zero transition.
Around the same time, I was receiving enquiries from small businesses wanting to find out how they too could embed the principles of Responsible Reward into their Employer Value Proposition. I have spent most of my career working with large international clients. So I had a slight sense of panic thinking about how to translate my knowledge and experience into meaningful deliverables for much smaller employers.
With a bit of creativity and insights from the webinar, I drew some parallels between big and small organisations:
The benefits to SMEs of embracing Responsible Reward include:
- attracting more engaged employees
- creating a competitive advantage to gain loyal customers
- securing long-term investments
The E.A.R.T.H.® methodology I use with big businesses can be applied to smaller ones too:
- Evaluate your current situation: for example by measuring your current emissions with the UN Global Compact calculator
- Ascertain your goals and targets: make a public commitment of what reduction you’re aiming to achieve and by when
- Realise what you need to change to reduce your scope 1, 2 and 3 emissions
- Tell your story to your internal and external stakeholders for increased engagement
- Create an ongoing Help tool to measure progress, report on results and recalibrate targets over time
There is no doubt that, due to their size, SMEs face challenges when ‘racing to zero’. They don’t always have the people and capital resources to make the necessary changes. They also have to encourage their supply chain to set their own emission reduction targets. Some SMEs will only work with organisations that are committed to reducing their CO2 emissions. Their fear of losing clients through this selection process is soon replaced with a stream of loyal customers.
Just like big businesses, SMEs also have to be mindful about not greenwashing their drive to become more sustainable. Paying lip service to their sustainability agenda may well backfire as knowledge is growing in this space.
The webinar from UN Global Compact Network UK focused on the environmental pillar of ESG, which can be incorporated into incentive plans. A similar process can be applied to the S and G pillars and other components of Responsible Reward. For instance:
- does the SME pay the Living Wage?
- what benefits does it offer?
- where is it investing its employees’ pension contributions?
- is there evidence of modern slavery in its supply chain?
Remember that whatever sector you’re in and however big or small your organisation is, base pay, incentives, benefits and pensions are all part of your Responsible Reward offering. By linking your and your portfolio companies’ sustainability and remuneration strategies, you become an employer, an investment and an investor of choice.
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