ESG is helping Canadian small businesses grow

ESG

ThisRock’s Founder, Lindsay Hampson, was interviewed by the Financial Post in Fall 2023 for their ESG and Canadian small business article. 

The article was a summary of ESG (Environmental, Social, and Governance) and sustainability, and how they are shaping the future of small business growth in Canada. Being included as the voice of the business community was meaningful to ThisRock. Our day to day work has us rolling up our sleeves daily to help owners meet new and pressing climate and social demands from their largest customers. But – meeting new “people and planet” policy and data demands means more than just checking a box on a list. Initiatives can reduce expenses and increase revenue. You heard that right – being “good” is good for business. 

Let’s dive into the realm of ESG and its very real impact on the growth of Canadian small businesses – specifically who are along the supply chain or Tier 1 suppliers across manufacturing, automotive, chemical, or technology. In this post, we explore the recent developments in clean and safe energy, upgrades to offices and equipment, their influence on the Canadian business landscape, and how small enterprises can harness this trend for their benefit. 

ESG in the supply chain

At the top of the Financial Post article, the author proves that ESG has become a must in the supply chain for companies here in Ontario. One Canadian company reports a significant surge in requests for proposals (RFPs) and questions related to ESG-specifically emissions, environmental policies, social data, and processes. This is a clear indication that businesses are starting to recognize the importance of aligning their operations with environmentally responsible and socially ethical practices. Further down in the article displays a broader insight into the supply chain. There’s a growing demand for socially-conscious, environmentally-responsible, and indigenous-owned companies that are ESG compliant or certified. This is a remarkable shift in the business landscape. It shows the critical role businesses play in promoting sustainability and ethical practices.

Small and midsize companies embrace ESG

One of the most interesting aspects in the article is how small and midsize companies are now being asked about their ESG practices. This change does not – as typically understood by owners – pose negative repercussions for businesses. In fact, being “good” can actually be a catalyst for growth and profits. 

Here are some examples: 

  • reducing waste
  • getting more efficient with water usage
  • improving diversity
  • having a policy on sustainable procurement 

Small enterprises are learning that ESG is not just about being socially responsible; it can also have a positive impact on the bottom line. 

The Business Development Bank of Canada (BDC) conducted a study in 2023, shedding light on the pressures faced by small Canadian firms. The study highlights the role of ESG in these pressures. Businesses will have to report on their historical data. They will have to share or create policies on specific issues that matter to their large customers. According to the article; “SME suppliers say adopting ESG is good for business, because it leads to new business opportunities (50%), makes it easier to recruit and retain employees (32%) and improves access to financing and investment (31%).” Customers, bankers and investors are the ones putting real pressure on Canadian small businesses to self-assess and begin improving their score across environmental, social and governance benchmarks. 

Making ESG profitable and empowering

The prospect of rolling out new climate, environmental, social and human rights policies and initiatives may seem cumbersome. However, as many businesses have discovered, it can be a profitable and empowering journey. ESG initiatives don’t have to be a burden; they can be a driving force for your company’s growth and a source of purpose for your employees. If you’re a small business owner in Canada, don’t be overwhelmed if your customer, banker or investor asks for you to take time to assess and score your business on key sustainability issues. Seek assistance, understand your company’s baseline scores. Then, identify a few strategic initiatives that align with ESG principles to move your business forward.

Watch this video for a brief summary of the report. Small businesses can attract new clients, retain employees, and meet new large client demands over a competitor with tight environmental, social and governance programs.

The ESG wave is sweeping through our Canadian business landscape, bringing with it opportunities for owners to thrive in an ethical and sustainable way. It’s about more than just compliance. It’s about embracing a positive change that benefits not only your business, but also the planet, and society at large.

Thanks for reading! 

Nothing is perfect. Every step forward matters.

Take our free 2-min pulse checker to find out your business’ score across ESG.https://thisrockesg.com/check-your-pulse/