Environmental impact a Top 3 business issue for smaller companies: HSBC survey
ALMOST a third (30 per cent) of smaller companies in 14 countries (not including Thailand) consider having a sustainable impact on their community and environment as one of their top three long-term objectives, according to data from HSBC Commercial Banking.
Indonesia (43 per cent), UAE/Saudi Arabia (36 per cent) and Australia (34 per cent) are the countries where firms are most likely to focus their long-term strategies on this, as well as companies in the mining (42 per cent), utilities (38 per cent) and manufacturing (37 per cent) sectors.
For its 2017 survey HSBC polled decision-makers of companies with between 200 and 2,000 employees in Australia, Canada, China, France, Germany, Hong Kong, India, Indonesia, Mexico, Saudi Arabia, Singapore, the UAE, the UK and the US.
In the poll of more than 1,400 decision-makers across 14 countries, half (50 per cent) recognised their customers are demanding products that consider environmental and social impacts. They realised that this can act as a competitive advantage. In fact, 59 per cent of firms said that sustainable business practices would improve their growth and profitability.
Companies in the manufacturing sector (72 per cent) and in India (68 per cent), Saudi Arabia (66 per cent) and Canada (66 per cent) were the most likely to recognise this commercial benefit. Almost a third (30 per cent) of companies globally also believed that becoming a more sustainable business would contribute to improving their financial performance over the next three years.
To unlock further growth, more than a quarter (27 per cent) of smaller companies have prioritised investment to become more sustainable, with firms in Saudi Arabia (34 per cent), Hong Kong (33 per cent) and Australia (33 per cent) the most likely to have done so. In terms of sectors, mining (36 per cent), professional sServices (34 per cent) and utilities (33 per cent) show the greatest commitment to becoming more sustainable in terms of investment.
Commenting on the findings, Bryan Pascoe, global head of client coverage, HSBC Commercial Banking, said that the importance of building sustainable practices into their immediate and longterm strategies has become a no-brainer for business leaders. That’s what customers are demanding, and that’s how businesses will find growth to compete in today’s economy, he said. It is positive to see smaller firms were not only aware of sustainability as a potential game-changer, but many are already capitalising on trends and taking action.
“What we, at HSBC, are doing is helping these firms take this further,” said Pascoe. “That means working with them to look at their entire ecosystem to identify efficiencies in their supply chains, adapt their product offering and meet the sustainability standards expected by their buyers.”
On average, only 18 per cent of smaller firms rated sustainable actions as important to their business today. However nearly half (46 per cent) said they are important to them in the short to medium term – the next three years. These companies have identified setting up a dedicated team to implement corporate social responsibility (CSR) initiatives as their most important action going forward.
Finding operational efficiencies in their supply chains is an important area that businesses could now address to become more sustainable, said Pascoe. Almost half (47 per cent) of leaders identified this as a contributor to their company’s financial performance over the next three years, the research found.
