T V SARNGA DHARAN NAMBIAR –
Small is invariably beautiful; and Schumacher is as relevant today as ever. But, does being small (or even medium) allude to beauty in environmental terms? How SMEs (small and medium enterprises) relate to the environment can’t be dismissed as a one-off intellectual flare sparked by all-human curiosity. It’s as crucial a question as it is ominous.
That’s because well over 90 per cent of businesses across the world are SMEs, and as such their contribution to sustainable development matters much. Specifically, they can, and need to, significantly foster environmental sustainability. Even as the individual environmental impacts of each SME are comparatively smaller as against large firms, the cumulative impact of the SME sector is quite unsettling.
It has become imperative for governments of all hues to look at improving the environmental performance of SMEs through policies that aim at achieving reductions in harmful emissions and encouraging optimal energy and resource efficiency. Meanwhile, there is urgent need for governments to make environmental policies and compliance framework for SMEs less complicated.
The innocuity and the element of beauty that have been traditionally imposed on anything small need a pragmatic revision, especially in the industrial sector. In contrast with big firms, smaller firms are found to be less aware of the scale of environmental externalities and obligations, and generally show scant commitment to sustainable practices, probably due to a lack of sufficient resources that acts as an impediment to investing in environmentally sustainable action plans and systems.
Global statistics on the exact environmental impacts of SMEs is scarce, but studies show that almost 60 per cent of total carbon emissions and commercial waste and 43 per cent of all serious industrial pollution incidents in the UK are attributable to SMEs, while another study by the European Commission shows that SMEs contribute 64 per cent of the total environmental impact in Europe.
A key point is that as a significant number of SMEs function and serve local markets they face little international pressures or incentives with respect to environmental impacts. Even environmental and sustainability NGOs focus their might on large multinational corporations.
At the same time, this very “sustainability gap” in the SME sector offers innovative small-scale entrepreneurs niche business opportunities in the development and sale of environmental goods and services to other SMEs and large corporations. Especially, the market for developing and implementing state-of-the-art Environment Management Systems (EMS) that comprehensively manage SMEs’ environmental programmes is quite promising. EMS covers the whole spectrum of organisational structure, planning and resources for developing, implementing and maintaining environmental sustainability.
Increased resource efficiency, circular economy solutions and participation in green markets represent important opportunities for SMEs to improve their productivity, boost their competitiveness, register growth and create employment, notes a report by the European Commission. Its Green Action Plan for SMEs offers support systems for firms to take advantage of enhancements in resource efficiency, circular economy and the emerging green markets.
The SME sector is considered the backbone of Oman’s economy, and the Sultanate has witnessed several significant initiatives—at the government and private levels — to develop its SME sector. The Accelerate SME Oman project — a joint venture between Meethaq Islamic Bank and Thomson Reuters — that offers full-fledged resources for SMEs to thrive, deserves special mention. The programme provides idea, incubation, funding and community support to entrepreneurs to transform innovative ideas into functioning enterprises. Accelerate SME members get to network and exchange ideas through online community hub as well. Resources available include business intelligence, tools and templates, and a unique facility to benchmark performance.
Another initiative that can significantly boost Oman’s SME sector, particularly in the renewable energy and water-management fields, is the Glasspoint Innovation Spur from Glasspoint Solar, launched recently in partnership with Riyada, TRC, Innovation Park Muscat and Sharakah.
Such projects assume great significance, considering that there had been a 38-per cent drop in the number of SMEs in the Sultanate last year.
Oman can also benefit considerably from UNCTAD’s BioTrade project, which offers an exciting avenue for innovative SMEs to flourish. Since its launch in 1996, the project has been promoting sustainable trade in support of the objectives of the Convention on Biological Diversity. With a highly beneficial portfolio of regional and country programmes, supported by the BioTrade Facilitation Programme — developed to promote sustainable bio-resources management, product development, and value-added processing and marketing, BioTrade can help push Oman’s SME frontier further.
Of particular interest to Oman could be Blue BioTrade, which focuses on applying BioTrade principles in the marine sector towards establishing an ecosystem-based, adaptive management approach that fosters conservation of marine systems and enhances livelihoods.
Thinking futuristically, the Sultanate’s SME sector stands to gain much by joining forces with the Union for Ethical BioTrade, a non-profit agency founded in 2007 to promote business engagement in BioTrade, and sourcing of ingredients that come from biodiversity. It encourages sourcing practices that boost sustainable business growth, local development and biodiversity conservation — aspects that find high relevance in the Sultanate.