Incorporating the sustainable development goals in small- to medium-sized enterprises

Abstract

Multiple international stakeholders emphasise the important role of small- to medium-sized enterprises (SMEs) in achieving the sustainable development goals (SDG). SMEs make up more than 99% of companies in Europe, and holds a potential to promote social and environmental responsibility. However, there is no ‘one size fits all’ when it comes to the incorporation of the SDGs. In this study; we identify five main approaches based on a literature review including (i) rainbow washing, (ii) supporting ‘business as usual’, (iii) adding new initiatives/strategies, (iv) philanthropy and (v) strategic use in core businesses. These approaches are categorised based on their contribution to achieving the SDGs as well as the benefits for the company in question. We performed a case study of six SMEs in Northern Jutland, Denmark, which revealed, that most SMEs work with the SDGs in less proactive and ambitious ways, leaving a gap between the role they have been assigned and their current practices. To investigate this gap further, our case study combined with the literature review has helped identify factors influencing the SMEs choice of approach. These include both negative (uncertainty about the SDGs prospective role, lack of resources and low demand for SDG compliance) and positive (taking responsibility, social license to operate, communication and inspiration) factors. The negative influencing factors are particularly interlinked which is caused by inadequacy in resources, knowledge and qualifications. This indicates that SMEs cannot single-handedly implement the SDGs in a way that enables achievement of the 2030 Agenda, thus external guidance is needed.