SME EnterPRIZE: Promoting Sustainability Among Small and Medium Enterprises

Promoting the development of small and medium enterprises, particularly sustainability in business, is the focus of the Generali Group. The ‘SME EnterPRIZE’ initiative, embedded in the strategic plan ‘Lifetime Partner 24: Promoting Growth’, promotes a greener and more inclusive economy in line with the European Green Deal and the ‘Next Generation EU’ initiative. According to the conclusion of the White Paper ‘SME EnterPRIZE’, prepared by the SDA Bocconi School of Management in collaboration with Generali, sustainability means the potential for growth of small and medium enterprises by demonstrating a positive relationship between sustainability and financial performance, as sustainable behaviors can secure key resources and opportunities. Launched in 2021 to commemorate Generali’s 190th anniversary, this year ‘SME EnterPRIZE’ returns in its second edition across several European countries, premiering in Croatia.

There is no alternative

In recent years, it has been emphasized that sustainable business has no alternative, which was confirmed by the coronavirus pandemic, and during the response to it, awareness of the role of SMEs, or small and medium enterprises, has been strengthened, in which the organization of work changed in as many as 96 percent of cases. The ‘Focus SME’ report from the Austrian Ministry of Digital and Economic Affairs, based on a study by WIFU (Wittner Institute for Family Business) published in January 2021 and other studies, shows how small and medium enterprises and family-owned businesses are struggling with the corona crisis. Until then, most activities in these companies mainly related to short-term measures and initiatives, although innovative digital solutions play an important role.

According to an analysis conducted in some other EU member states, for example in France, small and medium enterprises rarely implement a sustainability strategy focused on economic, social, and environmental aspects, but rather emphasize either the ecological or social dimension to avoid jeopardizing economic sustainability, which is considered the most important factor.

In Italy, 50 percent of small and medium enterprises want to integrate sustainability into their business, but the difference between smaller and larger companies is that smaller ones are less focused on improving worker welfare, while larger ones focus on safety and environmental protection. Sustainability is becoming increasingly important in Spanish small and medium enterprises, of which 45 percent have an environmental protection strategy, and 41 percent want to adopt one. Although sustainability has gained traction in German small and medium enterprises, which are increasingly implementing this strategy, most lack strategic approaches to communications. The impact of climate change on activities is analyzed by 45 percent of German small and medium enterprises, but few plan to introduce measures related to sustainable business.

Differences Between Small and Large

In the European Union and Switzerland, there are more than 25 million small and medium enterprises, which make up 99.8 percent of the total number of companies employing 100 million workers, but so far only 13 percent of them from EU member states have adopted a sustainability strategy, and 21 percent are currently implementing it. As many as 40 percent of small and medium enterprises have the potential to become sustainable, while 18 percent have not even considered implementing a sustainability strategy. The approach to sustainability among small and medium enterprises is not yet fully developed and needs encouragement. Since each company has a different impact, the development of a sustainability strategy should individually identify the most important aspects. For example, what legislation requires regarding minimum environmental criteria for participation in tenders and public offers, or what customers require for entry into certified value chains, or what credit institutions seek in accessing sustainable financing. Examples may relate to reducing greenhouse gas emissions, levels of efficiency in the use of energy and raw materials, the use of recycled materials, and more.

Step by Step

Considering the limited competencies and skills as well as the economic, financial, and time constraints of small and medium enterprises, implementing a sustainability strategy may require introducing a modular approach based on a simplified action plan.

Some forms of sustainability management could help define the most important steps: formalizing the company’s core principles and values, adopting a sustainability policy, and creating a charter of commitments to stakeholders.

The adoption of a sustainability strategy must also be encouraged in Croatian small and medium enterprises, and Generali Insurance is doing just that by organizing the ‘SME EnterPRIZE’ competition for small and medium enterprise clients for the first time in Croatia. Companies will be able to compete in three categories: ‘Employee Welfare’, ‘Environment’, and ‘Community’, and applications must be submitted by June 5. 

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