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Small Businesses and Sustainability Innovation: Confronting the Gap between Motivation and Capacity

Small and medium-sized businesses (SMEs) employ most individuals in the private sector and cause the majority of private sector pollution in Canada. Yet, few studies address the potential of SMEs to play a significant role in sustainability transitions, the unique characteristics of the local scale that support this role, or the policy and governance challenges that these present. This policy brief from the Centre for International Governance Innovation (CIGI), a Canadian think tank, discusses the need for more effective policies to accelerate sustainability transitions in small and medium-sized businesses, which have specific capacity constraints and perceptions of sustainability benefits.

Author Sarah Burch's research has revealed key points about SMEs' perceptions of sustainability including:

  • Smaller firms tend to perceive sustainability to be more important, both personally and to their company, than do larger firms.
  • Actions that address social issues, such as employee well-being and inclusivity, appear to be more important, and more likely to be implemented, than do actions addressing environmental issues.
  • Community reputation is the most frequently cited motivator of progress on sustainability, while increased profits comes in a close second.

The policy brief recommends that policies to accelerate sustainability transitions in SMEs are tailored to these perceptions as well as their specific capacity constraints - namely a lack of time, funding, and availability of staff. Burch adds that sharing lessons learned from transformative small businesses around the world will assist in the transition, as well.

Read Sustainable Brands' article on this research.

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