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Book review: Small and Medium-sized Enterprises and the Environment: Business Imperatives. ed. Ruth Hillary, Greenleaf Publications. February 2000

Written By: Paloma Somohano
Published On: March 26 2009

The role of small and medium-sized enterprises (SMEs) in society cannot be underestimated—indeed, many think SMEs are the most important sector of a nation’s economy due to their  creative and innovative abilities, as well as the flexibility they execute in order to survive in our competitive world.  Yet, as editor Ruth Hillary explains in the collection of essays in Small and Medium-sized Enterprises and the Environment, their day-to-day activities aren’t always positive. They face many problems trying to survive, such as fierce competition, financing, and lack of human resources among others. In addition, they have limited capacities to quickly answer to stakeholders’ pressures, which is where environmental issues are usually found. What’s more, due to the large number of SMEs that exist, the fact that they are all different from one another, and the complex nature of environmental issues, it has always been hard to theorize about their business practices and the greening of their activities. According to Hillary, roughly 70 % or all SMEs contribute to the total pollution coming from this sector, however, these numbers cannot be confirmed since most national economic statistics don’t carry this data. Because of this staggering number, greening SMEs is, without a doubt, a subject that has long been under-researched and deserves our immediate attention.  To shed light on this important issue, Hillary from The Network for Environmental Management and Auditing compiled Small and Medium-Sized Enterprises and the Environment: Business Imperatives, a collective work with contributions from many authors from academia, multilateral organizations and business. Published in 2000 by Greenleaf Publishing, the volume seeks to portrait a general overview of SMEs realities’ when it comes to facing environmental concerns which can be useful to researchers, managers, entrepreneurs and people interested in the subject.  Through case studies and surveys from several countries the book can help the reader better understand how organizations have been adapting to regulations and to customers’ environmental demands all around the world. It is divided in four sections: Attitudes and Perceptions of Small Firms to the Environment and Sustainability, Environmental Management in the Small Firm, Practical Strategies for Reaching SMEs, and Case Studies from around the World.

The first section of the book, Attitudes and Perceptions of Small Firms to the Environment and Sustainability analyzes surveys on SMEs. The first article, by Alan Smith, Robert Kemp, and Charles Duff, called “Small Firms and the Environment”, shows that many managers in the UK recognize the pressures to commit to environmental action, which is the main idea behind the entire chapter. In this article, the managers surveyed show their willingness to take action, yet indicate that they have failed to act, mainly due to a lack of information regarding available initiatives and the related costs. Even though this and other articles presented in the volume focus specific regional cases, their conclusions can be extrapolated to the diverse situations of other SMEs all over the world. And this is where the strength of this publication lies.
Moving forward, an interesting article by Fiona Tilley analyzes small firms’ environmental ethics and discusses the dominant paradigm that exists between our neoclassical economic system and the barriers it represents for businesses’ environmental behaviors. It concludes by calling for institutional reform and the restructuring of our current economic system. The main question behind this statement is, once firms go beyond the win-win situation that would usually motivate environmental action, what will actually keep them seeking eco-efficiency? In order to answer to this question, the author posits that changes need to be made to the solutions available to companies so they involve ethical tools that allow the pursuit of eco-efficiency beyond cost-benefit motivations to true protection of the environment. 

The volume’s second section, Environmental Management in the Small Firm, begins with an introduction to common environmental management tools. Here, through case studies and surveys, the authors describe integrated environmental tools used by companies, their selection processes, and their performance results.  For example, Richard Starkey, on his article “Environmental Management Tools”, presents a concise overview of available systems SMEs can use to monitor their greening activities (like ISO, LCA, and Environmental Auditing). Moreover, the tools are presented in a way that can help managers choose which one suits their organization the best. The article concludes by stating that, since there are no two companies are the same, every organization needs to choose the tools that suits them best.  Other articles in this section cover other environmental management systems (EMS), such as ISO 14001 and EMAS. 

The third section, Practical Strategies for Reaching Small and Medium-Sized Enterprises, focuses on the support SMEs need in order to better understand their needs regarding environmental initiatives and to maintain them. The section begins by proposing effective ways of communicating to SMEs, which, as stated in previous articles, is one of the main reasons SMEs do not act. 

We know that environmental initiatives, especially among SMEs, are still voluntary. Therefore, it is quite complicated to orchestrate actions towards a common goal. Even worse, because this area is misunderstood and under-researched, the needs of many SMEs are unknown. That’s the main reason why communication is crucial when any organization, industry, or region wishes to implement a green initiative. Jane Hunt, in her article “Environment, Information and Networks”, addresses this issue by providing surveys from Denmark, which show the positive correlation of what good communication between authorities and organizations brings when addressing environmental issues. She stresses the importance of authorities to understand, as much as possible, the particular needs of SMEs in order to suggest better alternatives. Moreover, it is important that SMEs actually embarking upon these initiatives seek a positive cost/benefit relation outcome. This can only be achieved through the proposal of simple, effective tradeoffs for these organizations.

Other subjects covered throughout this section regard the supply chain (B2B), and relations between SMEs and environmental organizations. Theo de Bruijn and Kris Lulofs in their article “Driving Small and Medium Sized Enterprises Towards Environmental Management,” use surveys from The Netherlands to propose a practical framework for improving the communication among SMEs stakeholders. They argue that information is out there, but the problem is that it hasn’t been given to the right people. That’s the reason for their proposal which seeks to tailor information before it is presented to companies, since what really ignites green action are consensual agreements, and the credibility and reliability of the information. 

The volume’s fourth and final section presents six articles containing case studies from around the world, ranging from SMEs in the developing world, the relation between pollution and poverty, to the implementation of ISO 14000 standards in Japan. An interesting example and practical framework for action is introduced by Liz Walley in her article “The Environmental Champion: Making a Start.” The author introduces the concept of an environmental champion as a driver for the implementation of green strategies. The article seeks to orchestrate a specific framework with a high degree of potential success, which involves starting small, working with the context, networking, having a sense of audience, greenjacking, sustaining the emerging culture, and most of all, creating an environmental champion. These are considered key to the process of greening. We know that for managerial purposes as well as for environmental issues, magic recipes for green initiatives do not exist, and this framework does not pretend to be one, yet the research presented in this article shows that the these success factors do play a crucial role when implementing green innovations within SMEs. 

Overall, the chapters on the book are well analyzed in a scholastic manner. Most authors avoid taking positions and limit their analysis to survey results. Moreover, most ideas and hypotheses are approached in a very objective, descriptive, and neutral manner. This can unfortunately result in an overwhelming amount of information that doesn’t necessarily allow  readers to find a specific path of action, especially for those not very familiar with environmental issues.  On the other hand, the case studies and various examples allow the reader to grasp the complexity and specificity of environmental issues among SMEs. It’s a book that embarks and encourages discussion upon a delicate subject, that has been underestimated many times over. 

Due to the large number of SMEs that exist and their specific characteristics, and despite the case studies and examples presented, the book does not provide a clear set of patterns for entrepreneurs wishing to integrate an environmental initiative on their company. And even if the book’s perspective is quite original and questions many ideas often taken for granted, some readers may find the number of topics (public administrations, industries, EMS, international trade, developing countries, stakeholders, etc.) a bit confusing. And though the particularity of SMEs is main idea which all the articles revolve, this, at times seems to be secondary to other fundamental matters that aren’t always discussed in the articles, such as general management theories, which crucial to SMEs business models. Thus the coherence of the book suffers from the contribution of many different authors, which is at the same time what  gives value to the book. 

Perhaps one of the biggest drawbacks of this volume is that the reader can feel overwhelmed by the amount of information and tools the writers present. Indeed, how are managers to know their specific needs when they’re not even sure of being able to implement a green initiative? To their credit, this point doesn’t escape the contributors’ analyses. For example, in Agneta Gerstenfeld and Hewitt Robert’s article “Size Matters: Barriers and Prospects for Environmental Management in Small and Medium-sized Enterprises”, surveys point out that 70% of SMEs are aware of green management but, since their activities must concentrate on day-to-day operations, environmental issues escape them. Furthermore, Hillary, in her article “The Eco-Management and Audit Scheme, ISO 14001 and the Smaller Firm” takes this point a step further stating that it isn’t lack of tools or their unavailability, but internal barriers that are keeping managers away from green initiatives. Overall, the articles attempt to delve into the source of why SMEs fail to give the environment priority, and insists on the need to convey very specific messages to managers.  So what triggers action to meet environmental demands? Each section provides mixed answers. Many authors state that this depends on the information SME managers receive. However, some of the surveys presented in the articles reveal that managers are indeed aware of environmental concerns, available tools, government support, etc. So, what’s missing? Unfortunately, the answer to this question depends on the particular situation of every SME. Because most of the analyzed cases presented deal with a particular industry or region, a general, let alone an in-depth framework to encourage action cannot be drawn from this volume. And here lies the dilema: many SME managers need practical tools that can easily be integrated. Unfortunately, due to the unique nature of SMEs tools to overcome environmental issues do not follow a simple pattern. However, it is unrealistic to expect one book  to offer all SME managers the practical tools they need to integrate sound environmental initiatives. Nonetheless, I believe this volume provides an excellent source of information that, combined with specialized, practical managerial tools, can lead to  efficient long term strategies aimed towards the protection of the environment. 

Despite that all research and surveys were made before 2000 and many innovations have appeared since its publication, the book can still guide action today. Some ideas presented in this volume, such as  concise information networks, appropriate mentoring and effective green-driven supplier relations, have proved to be effective for many businesses throughout the world. Other useful insights can also be drawn from the book. First of all, SME’s have played a defensive role, which have been clearly identified through the chapters of the book (lack of information, resources, etc.). And still, SMEs have the potential to overcome these barriers and achieve eco-efficiency given the flexibility and innovative capacities that characterize SMEs. The main issue in most of the cases is the link between information and action, in other words, how managers and decision makers should embark upon these much needed changes. The main issue that needs to be better understood is that, eco-strategies can be of different natures and have to be adapted to each and every SME.  This book is a great step towards sensitizing entrepeneurs, managers, researchers, and the general population about the realities SMEs face when regarding the environment. It brings interesting insights for entrepreneurs and managers of SMEs, and is, without a doubt, a great source of information for innovations and value creation, beyond regulatory demands.
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