How small and medium manufacturers can turn sustainability into growth
Environmental responsibility is not merely an ethical obligation; it has evolved into a crucial factor that drives competitiveness, fosters innovation, and promotes long-term business growth.
For small and medium-sized enterprises (SMEs) and mid-sized manufacturers—which make up 90% of global businesses, and contribute to 70% of worldwide employment and 40% of industrial pollution across OECD countries—embedding sustainable practices into their core strategies is no longer optional. It represents both a powerful opportunity and a critical necessity.
- 90%of global businesses
- 70%of worldwide employment
- 40%of industrial pollution
Yet, the road to achieving meaningful environmental progress is often lined with challenges for smaller manufacturers: limited financial capacity, insufficient knowledge about where to start, and the difficulty of navigating increasingly complex reporting requirements.
By employing structured frameworks, leveraging expert advice, and engaging support across the manufacturing supply chain, smaller organizations can position themselves as leaders in this arena.
According to a survey conducted by the SME Sustainability Accelerator of the World Economic Forum in diverse sectors and geographical areas, 68% of respondents in the SME and mid-sized manufacturer community indicated that their organization has a positive perspective on sustainability, with 38% viewing it as a business opportunity.
Taking steps to improve environmental responsibility offers more than a way to address emissions. It drives innovation, creates multiple opportunities to enhance operational efficiency, reduces costs, and attracts talent, overall helping companies to redefine their place in the market.
Applying a sustainability lens to a manufacturing challenge can help to identify new opportunities for efficiency gains resulting in lower costs and improved margins – a measurable bottom-line impact of sustainability.
Sustainability in manufacturing does not always have to focus on efficiency or cost reduction; in some cases a sustainability framework can help to open up new revenue streams and business models.
Additionally, research indicates that job seekers increasingly prioritize environmentally conscious employers. An IBM global survey revealed that 69% of candidates prefer working for companies that demonstrate commitment to protecting natural resources, making it clear that sustainability is a significant factor in attracting top talent.
For SMEs seeking to integrate environmental practices into their core strategies, a step-by-step approach can provide clarity and direction. Here’s a five-stage actionable roadmap developed by the World Economic Forum, to help smaller manufacturers break down the process and make real progress.
Building the foundations
Begin with an honest assessment of your environmental impact. This involves identifying the areas of your operations that consume the most resources and setting achievable goals to address them, such as improving energy efficiency or reducing water consumption. Initiatives like the Green Industry Platform’s SME Support Centre or the United Nations Global Compact SPARK Program can provide valuable insights to guide your initial steps.
Identifying and implementing quick wins
Identify areas where quick changes can lead to significant results. For instance, installing variable speed drives on motors can reduce energy usage substantially with a relatively small investment. Early wins not only save money but also build enthusiasm and credibility, encouraging broader buy-in from stakeholders.
Measurement, reporting and improvement
Because you cannot improve what you do not measure, use tools and dashboards to measure critical metrics such as energy savings or emission reductions. Carbon calculators designed for SMEs and platforms like the SME Reporting Tool, freely provided by the SME Climate Hub can simplify compliance with reporting requirements, making it easier to keep stakeholders informed while identifying areas for continuous improvement.
Embedding sustainability into long-term planning
Start integrating environmental practices into your design and procurement processes. By embracing eco-design principles and working with suppliers to minimize transportation impacts, you can embed these practices into your company’s DNA. Taking a long-term perspective ensures that these efforts are not temporary but part of a lasting transformation.
Driving a cultural shift and communicating achievements
For initiatives to thrive, they must resonate with everyone within the organization. Encourage team-wide participation and celebrate milestones along the way. Sharing your successes externally—through reports or campaigns—not only strengthens your reputation but can also attract environmentally conscious customers and partners.
While a structured plan can provide clarity, executing these steps often requires robust support. Many SMEs identify financial constraints and knowledge gaps as the biggest hurdles to implementing sustainability initiatives. Collaboration with governments, larger corporations, and industry associations can play a transformative role in addressing these barriers.
In the report “Sustainability Meets Growth: A Roadmap for SMEs and Mid-Sized Manufacturers”, the World Economic Forum has identified key support mechanisms from the public and private sectors to help SMEs to advance their sustainability goals.
Financial support
Programs such as matching grants, which link funding to the cost savings from efficiency improvements, enable smaller businesses to undertake projects they might otherwise find too expensive. Streamlining the loan application process and pairing businesses with advisors knowledgeable on how to translate sustainability project returns into data banks can easily interpret can further reduce friction, helping SMEs make a compelling case to financial institutions.
Access to knowledge and resources
Practical, user-friendly resources are essential for smaller manufacturers. Platforms like the SME Climate Hub offer calculators, guides, and reporting templates tailored to the unique needs of smaller operations, reducing the learning curve for businesses new to the process.
Clear policy guidelines
Consistent regulations and supportive policies create an environment where businesses can plan with confidence. Governments can take inspiration from initiatives such as United States’ Inflation Reduction Act (IRA), and China’s 14th Five-Year Plan for Promoting SME Development which provide financial incentives like tax breaks for environmentally responsible actions.
Localized expertise
Partnering with energy consultants, regional suppliers, and local implementation experts can help SMEs adapt solutions to their specific operational challenges, ensuring greater success and smoother implementation.
Schneider Electric launched The Zero Carbon Project in 2021 to help its top suppliers reduce operational emissions (Scope 1 and Scope 2) intensity by 50% by 2025. Through training, digital tools and tailored support, the initiative helps suppliers measure emissions, set targets and implement reduction strategies. More than 1,000 suppliers, many of which are SMEs or mid-sized manufacturers, have joined, achieving a 42% operational emissions intensity reduction by Q1 of 2025, with 70% assessing their carbon footprint for the first time.
For smaller manufacturers, aligning with environmental practices is not just about compliance or meeting social expectations—it’s a powerful competitive advantage. Organizations that proactively adopt these practices are better positioned to respond to shifting market demands, attract investors, and thrive in an increasingly challenging global economy.
The journey to greater sustainability may seem daunting at first, but by breaking it down into actionable steps, leveraging collaborative resources, and staying committed to long-term goals, SMEs can not only overcome these obstacles but also unlock significant opportunities.
Governments, corporations, and small manufacturers must come together to ensure that these efforts are not just isolated successes but part of a broader, collective transformation. Beyond addressing immediate needs, the bigger aim is to create a more resilient, adaptable, and prosperous manufacturing ecosystem that benefits everyone involved.
When businesses align their growth strategies with responsible practices, the benefits extend far beyond the bottom line, with employees, customers, communities and future generations all standing to gain from environmental sustainability combined with economic prosperity.
Get insights from a global survey of manufacturing SMEs and mid-sized firms and explore the transformation of sustainability from a perceived cost to a strategic growth opportunity in the “Sustainability Meets Growth: A Roadmap for SMEs and Mid-Sized Manufacturers” white paper by the World Economic Forum.
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