As corporations go green, SMEs could hold lessons

Many smaller firms have embraced environmental goals, turning passion into action while growing their businesses. Larger companies have much to learn
Businessman and woman sitting in front of green plant wall, using laptop

It has never been more important for companies to show a positive environmental impact. But when a business tries to clean up its act, it can often meet with controversy, opening itself to accusations of ‘greenwashing’.  

Greenwashing is the practice of making an organisation seem more environmentally responsible than it is. For example, Nestlé Waters Canada was criticised for a 2008 ad which claimed that “bottled water is the most environmentally responsible consumer product in the world”. And in 2019, energy giant BP ran an ad campaign centred on its low-energy products, when 96% of its annual spend was still on oil and gas; the ad was withdrawn.

Greenwashing is a particular concern at big corporations, as is ‘bluewashing’, the practice of making an organisation seem more socially responsible than it is. However, it seems to happen less at small and medium-sized enterprises. They often have a closer connection to the areas in which they operate, helping them run more effective environmental and socially sustainable initiatives. What lessons might SMEs have for larger operations?

Passion into action

Finisterre has produced ethical outdoor clothing since its inception in 2003. The company has a reputable supply chain and uses innovative sustainable fabrics and natural fibres, along with leave-no-trace packaging. 

“Today, every brand has a ‘conscious range’,” says Lawrence Stafford, community brand manager at Finisterre. “And while legislation is getting better at dealing with green and bluewashing, we’ve never had to change our business model to a sustainable one, as we’ve been like that since the beginning.”

In recent years the St Agnes-based company has further evolved. It’s moved beyond simply guaranteeing the ethical provenance of its product lines and instead focuses on what Stafford refers to as “action, inspiration and access”. This means delivering concrete environmental change and encouraging others to do the same, building on its existing connection to grassroots initiatives.

These efforts include funding and amplifying the work of Project Seagrass, a marine habitat restoration programme in Scotland, and City Kids Surfing, a charity that introduces inner city children to the ocean. Finisterre also set up an online ocean activist training camp called Sea7 during lockdown with the environmental charity Surfers Against Sewage.

“Those relationships with the grassroots were always there but what we’re doing now is putting in place something that has a real tangible impact,” says Stafford. 

In 2021, the brand launched the Finisterre Foundation, a community interest company, centred on improving access to the sea. “In the UK, you’re never more than 70 miles from the coast, yet to so many people it’s such an unknown. Even in Cornwall, you have kids who live three miles from the beach who’ve never been there,” says Stafford.

The foundation aims not just to enrich people’s lives through surfing, sea swimming or simply being on the beach, but also to foster a deep connection to coastal environments, with the goal of nurturing future marine stewards. “If you don’t have a relationship with the ocean, why would you care about protecting it?” Stafford says.

Link ethics to business goals

When Bristol-based brewery Wiper and True launched in 2012, the company didn’t have climate objectives at its core. However, it always had employees who wanted to minimise their impact, including two directors who’d previously worked at the renewables firm Good Energy. But it wasn’t until 2019, when they created the first sustainability manager position, that environmental initiatives became embedded in the business.

Sustainability manager Joseph Watts previously worked in packaging and operations at the brand. At first, he found the role daunting and didn’t know where to begin. He realised he needed to define it for himself. “Am I determined to get to net zero, or more holistic in terms of thinking about people, culture and finance?” 

You only really tune into an NGO or organisation like Greenpeace if you’re that way inclined already, but brands have a responsibility to engage their audiences with these issues

Watts did a course at the Cambridge Institute for Sustainability Leadership to help streamline his thinking. “It was inspirational. They throw so many stats at you which make you concerned about where the world is heading. It drove an uncompromising passion in me to do this well and find a path through the complexity of it,” he says. 

Watts began looking for ways to tie the financial and environmental objectives of the business together. Brewing beer is incredibly energy-intensive, so when the company moved to a new brewery site, he encouraged it to install solar panels on the roof, meaning as much electricity as possible was generated on-site. 

He also collaborated with a waste start-up called Wase to turn Wiper and True’s brewery waste into biomethane as an additional energy source. “It will help make us financially sustainable and resilient to the gas price spikes as we’re seeing now,” he says.

Brewing generates a lot of carbon dioxide, which the company was releasing into the atmosphere. Watts acquired a small-scale carbon capture recovery unit from Denmark, one of very few in the world, so Wiper and True can capture the gas and reuse it to carbonate beer or even sell it to other companies. This is something large breweries already do, furthering the business case for these climate initiatives through direct financial benefits.

Watts says it isn’t hard to convince his colleagues on such initiatives, especially the newer members of staff, many of whom were attracted to the company for its bold sustainability ambition. “They help drive things and make sure we’re not greenwashing,” he says. “They’ll pull us up if a proposal doesn’t stand up to scrutiny. It’s a company-wide push, with everyone behind it.”

But even in a larger organisation, Watts believes that proving a direct financial benefit is the best way to embed sustainable practices. “Even the CEOs who don’t care that much about [their environmental impact] are going to listen to that,” he says.

Share knowledge and collaborate

During COP26, Watts set up the Brewers’ Climate Forum to share environmental learning across the industry. All the breweries in Bristol got involved, including big players like Bath Ales. “Starting communities of different people is really important as we’re only going to solve these things together,” he says. “People had varying levels of resource of course but there was a real appetite for change and enthusiasm for collaboration.”

Karina O’Gorman is head of force for good at Innocent Drinks, which has transitioned from an SME to a larger corporation of 900 employees. She says collaboration has always been key in climate initiatives within the business. “It’s not possible to do it all alone,” she says. “You have to look to work with NGOs, environmental specialists, your industry or wider business networks to learn and collaborate to achieve greater change.”

O’Gorman believes brands can play an important role, helping translate these complex issues in engaging ways for consumers. 

Stafford thinks it’s their responsibility to do so. “We don’t have time to softly lean into these things anymore. There’s an urgency now from the business to put ourselves out there.”

For example, they can help amplify the voices of scientific experts and ocean experts who have been campaigning on these issues for decades. “You only really tune into an NGO or organisation like Greenpeace if you’re that way inclined already, but brands have a responsibility to engage their audiences with these issues. That’s why we’re stepping up to the plate.”

So are SMEs more effective at running meaningful climate initiatives than larger companies? “Smaller challenger brands can often have a new perspective on sustainability-creating opportunities that can help drive climate action in new directions; they can be more innovative and agile,” says O’Gorman.

However, she notes that large organisations have more significant funding pots for climate initiatives and greater leverage in the supply chain due to their scale. “All businesses have a role to play in climate action.”