Louise Towler, MD of Indigo Tree

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Sustainability is no longer a buzzword. It’s a business reality.

But let’s be honest, adopting sustainable processes for a small or medium-sized business (SME) isn’t always straightforward. You have less time, less budget, and fewer people to figure it out. So, where do you even begin?

Let’s look at the top five sustainability challenges facing SMEs, and what you can do about them.

1/ Limited Budget and Resources

One of the biggest hurdles is the cost. While big companies have sustainability teams, carbon auditors, and funds set aside for net-zero goals, small businesses often manage everything with a team of five and a spreadsheet.

Want to swap out your lighting for LEDs? That’s an expense. Are you thinking about switching to a greener supplier? Probably more expensive. Need a carbon audit? That’s time and money you might not have.

What can help:

• Look for local grants or tax relief for energy-saving upgrades.
• Start with low-cost wins by switching to green energy, reducing packaging, or turning off idle devices.
• Use free tools like the SME Climate Hub or Carbon Trust calculators to measure your impact.

Sustainability doesn’t have to be all or nothing. Small changes can still make a difference and often save money in the long run.

2/ Confusing Regulations and Reporting

Navigating sustainability rules and regulations can be confusing. The UK’s Streamlined Energy and Carbon Reporting (SECR), the EU’s Corporate Sustainability Reporting Directive (CSRD), and industry-specific regulations apply to large businesses. Some are mandatory. Some are voluntary. They all feel overwhelming when you’re just trying to keep your business afloat.

Even if you’re not required to report now, larger businesses in your supply chain might ask you for your carbon reduction plan and pass that burden onto you soon.

What can help:

• Keep an eye on sector-specific guides or join a local business group focused on sustainability.
• Use simple templates to start tracking your emissions or energy use now even if it’s not perfect.
• If you sell in the EU, prepare for CSRD-style transparency requests in the future.

Clarity might be in short supply, but waiting until you’re forced to act risks your business.

3/ Supply Chain Pressures

You might not consider yourself part of a global system, but your clients and customers do. If you supply larger businesses, expect them to start asking about your carbon footprint, how you source materials, and even your employee wellbeing.

Sustainability isn’t just about your office or website; it’s about your entire value chain.

What can help:

• Ask your direct suppliers about their environmental policies.
• Track your emissions using categories like Scope 1 (direct), Scope 2 (electricity), and Scope 3 (indirect).
• Consider getting certified (like ISO 14001 or B-Corp) to reassure potential clients.

Being supply-chain ready isn’t just about avoiding risk. It’s also a way to win better contracts and stand out from your competition.

4/ Balancing Growth with Green Goals

Here’s the dilemma: you’re growing fast, and you need to move quickly. However, sustainable options often feel slower or more expensive. It’s easy to shelve sustainability until “later” when there’s more time or money.

The thing is that “later” rarely comes.

Examples of tricky trade-offs:

• Choosing between a local, eco-friendly supplier and a cheaper overseas one.
• Launching a new product quickly vs. designing it with sustainable materials.
• Investing in website upgrades vs. switching to a greener hosting provider.

What can help:

• Bake sustainability into your core business goals, not just your CSR strategy.
• Highlight your green choices in your marketing and customer messaging.
• Track your progress with simple KPIs like waste reduction or energy use per sale.
• Undertake a digital declutter to reduce your data storage.

Sustainable growth isn’t about being perfect, it’s about being honest, intentional, and transparent.

5/ Lack of Clear Guidance

Even when you want to do the right thing, it’s not always obvious what that is. Should you measure carbon? Focus on packaging? Go paperless? What about digital emissions from your website?

Without a roadmap, it’s easy to spin your wheels and do nothing at all.

What can help:

• Start with the most significant areas of impact, typically energy use, transport, and procurement.
• Get your team to brainstorm sustainable ideas that work for your size and type of business.
• Avoid the trap of “perfection or nothing.” Progress beats paralysis every time.

Need inspiration? Look at peers in your industry. Chances are, someone else has already found a shortcut you can take inspiration from.

Final Thoughts

Running a small business is hard enough already. Adding sustainability on top can feel like trying to fix the plane mid-flight. But the good news? You don’t need to do it all at once. You just need to start.

Start small. Start with what you control. Start by asking better questions.

Because the businesses that figure this out early, the ones that are greener, cleaner, and more transparent, are the businesses that will stand out tomorrow.

FAQs

How can a small business start being more sustainable?

Begin by identifying the areas with the most significant impact: energy, waste, transport, and suppliers. Pick one and set a small, measurable goal. Use free tools to track progress.

Are there grants available for sustainable upgrades in the UK?

Yes. You can explore schemes through the UK Government, local council, Growth Hub, or programs like the Carbon Trust and SME Climate Hub.

Do I need to measure my carbon footprint as a small business?

Not always, but it’s becoming more common, especially if you work with larger organisations. Starting now can give you a competitive edge.

What certifications can help prove our sustainability?

Look into ISO 14001 (Environmental Management), B Corp certification, or the SME Climate Commitment. These can boost credibility with partners and customers.

Can digital businesses be sustainable too?

Absolutely. From green hosting and lightweight website design to ethical data use and digital carbon reduction, online businesses have room to improve their footprint.

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