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Stimulating Sustainability in SMEs

Murk M. V. Peutz*

Syntens, J.F. Kennedylaan 2, 5612 AB, Eindhoven, The Netherlands.

E-mail: murk.peutz@syntens.nl

Jorn Maas

Technical University Eindhoven, Den Dolech 2, 5612 AZ, Eindhoven,

The Netherlands.

* Corresponding author

Abstract: Small and Medium sized Enterprises (SMEs) are only slowly

committing to sustainability in their products, processes and organisations. To

enhance their efforts, SMEs have increasingly been targeted by intermediaries

and policy makers. This paper presents one such intervention, called “the

Sustainability Quick Scan”, implemented by Syntens, a not-for-profit Dutch

innovation intermediary. This intervention aims at stimulating awareness and

uptake of sustainability in SMEs. Over 1000 SMEs carried out the quick scan.

An evaluation was conducted by means of analysis of the quick scan data.

Results show drivers for sustainability in SMEs. It is shown that SMEs are

more sustainable once they have started addressing these drivers. A framework

is established with a SME typology on the basis of these drivers. Professionals

and policymakers can use this framework to help „greening‟ SMEs.

Keywords: sustainability; innovation support; quick scan; success factor;

policy intervention; qualitative evaluation; quantitative evaluation; small and

medium-sized enterprises.

1 Introduction

For most large companies these days sustainability is an important topic. The triple P

concept, in which development of company goals are enhanced by a balanced use of

resources, social networks and the environment (people, planet and profit), is widely

accepted. Multinational and publicly traded companies have shown the way on how to

implement and report on sustainability. In Small and Medium sized Enterprises (SMEs)

the awareness for sustainability is less widespread. National and regional governments in

the Netherlands have supported policy initiatives to increase awareness of sustainability

among SMEs. One of these initiatives is the “Doe Mee” (Join In) project, which was

developed in 2009 by Syntens, a not-for-profit Dutch innovation intermediary. In the

project an online diagnostic tool was developed called “the Sustainability Quick Scan

(SQS)”, which enables SMEs to gauge their ambition and progress in the field of

sustainability. This paper presents the SQS as well as the preliminary results of over a

1000 completed scans. The results of the scan are analysed and compared with findings

from the literature. It is found that SMEs follow a certain path from awareness to

implementation of sustainability measures. To advance along this path, SMEs address

„success factors‟, or drivers, of sustainability as derived from literature.

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2 Literature review

2.1 Sustainability definition and measurement

The World Commission on Environment and Development, chaired by Gro Harlem

Brundtland, introduced the now widely used definition of sustainable development:

“Sustainable development is development that meets the needs of the present without

compromising the ability of future generations to meet their own needs” (World

Commission on Environment and Development, 1987). Sustainability is furthermore seen

as a complex concept comprising of three subcategories, which are economic

sustainability, social sustainability and environmental sustainability (Goodland, 1996). In

this view, companies adhering to sustainable development should monitor their economic

rents, but also their effect on social conditions and on the environment. Elkington (1998)

first coined the term “Triple Bottom Line” for the combined attention of businesses for

these three dimensions, which stresses the equal footing of economic gains with social

welfare and environmental preservation (Elkington, 1998). Often, for Triple Bottom Line

other terms are used like “Triple P” or “People Planet Profit” (Peutz, 2011).

Measuring sustainability can be carried out at three levels. First, on an abstract

level, companies can be measured as being engaged in sustainability by the level of

agenda setting and prioritizing by their boards. Companies are then defined as being most

engaged with sustainability if e.g. their executives say that sustainability is a top three

priority in their agendas, that it is formally embedded in business practices, and that their

companies are “extremely” or “very effective” at managing it (Bonini et al, 2010).

Second, sustainability of companies can be measured by using indexes like the Dow

Jones Sustainability Index. A position in the index is achieved by complying with an

(independent) audit procedure, which measures on the above mentioned three

dimensions: economic, environment and social. The economic dimension assesses

corporate governance, CRM, Innovation Management and Risk & Crisis management.

The environment dimension assesses climate strategy, environmental reporting, product

stewardship and environmental policy & management system. The social dimension

assesses standards for suppliers, human capital development and talent attraction and

retention (Knoepfel, 2001). Third, by means of accounting rules, sustainable activities

can be valued and benchmarked. With Triple Bottom Line Accounting, a framework is

presented with which a company gauges its sustainability performance on an operational

and financial level. Thus, a more operational approach to sustainability in firms is used

(Wang and Lin, 2005).

2.2 Sustainability and corporate performance

Sustainability is increasingly seen as a driver for corporate performance. Companies

featuring in the Dow Jones Sustainability Index show a higher performance on economic

dimensions like sales growth as compared to similar companies without a position in the

index. Results indicate that leading “index” firms are significantly larger, have higher

levels of growth and a higher return on equity than conventional firms (Artiach, 2010).

Evidence of the economic relevance of sustainability in SMEs is more scarce. In separate

cases, entrepreneurs who engage in sustainability credit this with higher returns and

growth rate. For example, firms combining cost benefits and energy conservation as a

sustainability feature in their product proposition experience higher sales (Peutz, 2011).

Data published in practitioner journals like MIT Sloan management review and

McKinsey Quarterly indicate an increased commitment to sustainability among (mostly

large) companies. In a recent survey among 3,000 managers, more than half reported that

they had increased or significantly increased management attention and investment in

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sustainability. Despite the economic downturn, 59% of companies interviewed claim to

have increased their commitment, whereas 68% of companies plan to increase their

investments in this area. The managers indicated a number of perceived benefits as a

result of implementing sustainability. Nearly half of the respondents (49%) ranked an

improved brand reputation as the biggest win. Reduced costs due to energy efficiency

ranked second (29%), increased competitive advantage ranked third with 26% and

reduced costs due to materials and waste efficiencies (25%) ranked fourth (Haanaes et al,

2011).

Implementation of sustainability is enhanced by a number of capabilities at the

firm level. If used properly, these capabilities accelerate the implementation of

sustainability and will hence drive future growth and performance. Keijzers et al (2008)

found that if capabilities of a firm are used to enhance sustainability in either positioning

& marketing or in the supply chain, more success is achieved with implementing

sustainability in general. For SMEs two success factors for sustainability can then be

defined: smart combination of sustainable and traditional (product) features, and

implementation or coordination skills throughout the supply chain (Keijzers et al, 2008).

With the increased public interest of customers and stakeholders in

sustainability, SMEs consider a move towards greener products and services. External

profiling of the internal level of sustainability of the company can contribute to a “green

image”. However natural the move towards a greener proposition and profile may seem,

in reality this move is risky and hard to achieve. Consumers are only prepared to pay for

ethical dimensions in products if functional features are also satisfactory. Even “socially

conscious” consumers primarily value function and price. In fact, functionality comes

first (Auger, 2008). Furthermore, consumers are only willing to pay small margins for

additional green product features, like “organically grown” in the case of food. In some

cases, consumers value sustainable features of products even less than “non-green”

products (Verhoef, 2009). Research in the field of corporate social responsibility (CSR)

in firms indicates that customer satisfaction can even be negatively affected by CSR, if

the innovative capability and product quality of the firm is low (Xueming Luo and

Bhattacharya, 2006). So, sustainability can work against you, if your proposition is not

enticing enough. In summary, firms successfully implement sustainability if they manage

to combine their environmental and social features of their products with other customer

valued features. A green proposition needs to go further and deeper than “green only”.

Multinational companies are very much aware of the fact that sustainability

must be implemented in all stages of the supply chain, otherwise the end product will be

“only partly” sustainable (Dutilh, 2008). A well known case is the G-Star incident, where

NGOs discovered the existence of “sweat shops” in the G-Star supply chain, where very

unfavourable working conditions existed. The discovery led to consumer outrage and lost

sales for G-Star (Pennings, 2008). An increased pressure by stakeholders, like the

abovementioned NGOs, but also by consumers has increased pressure on companies to

see to implementation of sustainability along the supply chain. The use of supply chain

management systems along the supply chain enhances the transfer of socially responsible

behaviour in the supply chain (Maloni, 2006). Companies can use three management

tools, as present in many of the management systems (Ciliberti, 2008). First, establishing

written supplier requirements, including the relevant work practices and specifications.

Second, monitoring the supplier‟s performance. Is the supplier complying with the

written requirements? Third, companies can help suppliers with building capabilities and

creating awareness about sustainability.

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2.3 SMEs and sustainability: research questions

Recent data from practitioners literature reveal the emergence of a split among firms. In a

new sustainability study, Haanaes et al (2011) argue that a gap has grown between

companies which do embrace sustainability-driven strategy and management and

companies that don‟t (the cautious adopters). The sustainability embracers believe

sustainability is a competitive necessity, have developed a business case and consider it a

permanent management focus. In fact, embracers tend to believe that the company‟s

sustainability efforts affect profits three times as much as non-embracers perceive this

impact on profits (Haanaes et al, 2011). These data are predominantly from large and

multinational companies, which leads to the question whether SMEs follow a similar

pattern and can be divided into these two groups, i.e. how are sustainability efforts

distributed. A first hypothesis therefore is:

“SMEs can be divided into two groups of embracing and not embracing

sustainability”

The SQS data provide the opportunity to test the above stated research in large companies

that “low hanging fruit” i.e. financial benefits like cost savings moderate the

implementation of sustainability. Practitioner cases showed that perceived financial

benefits trigger entrepreneurs to implement sustainability (Peutz 2011, Haanaes 2011).

The hypotheses are:

“SMEs invest in sustainability mainly for financial reasons” and more specific

“SMEs which state to think that sustainability cuts costs, undertake more

activities related to sustainability”

As discussed in the previous paragraph, a strong link exists between implementing

sustainability and the activity in the supply chain on this topic. Would SMEs show a

similar strong link? The hypothesis is:

“When a company engages in sustainability, it also monitors the sustainability

of customers and suppliers”

Finally, from practitioners and from academic literature a positive link is derived between

brand value and marketing and the level of internal sustainability efforts. Hence the

hypothesis:

“Internal sustainability correlates with marketing”

In the following paragraph the methodology for the evaluation of the SQS and the data is

explained.

3 Methodology

This section starts with an introduction of Syntens and the “Sustainability Quick Scan”

instrument employed in SMEs in the Netherlands. Subsequently, the evaluation

methodology regarding this intervention is briefly discussed, considering a quantitative

study.

3.1 Syntens

Syntens is a Dutch not-for-profit innovation intermediary, supporting SMEs employing

5 to 250 people, through numerous activities and projects, ranging from pure

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intermediation and referrals to providing free consult to improve the innovation process.

The aim is to increase the revenue of those companies by means of innovation.

Activities cover the entire innovation process, but focus on the initial phase of

innovation processes. Activities are offered to SMEs in six pre-designated sectors:

industry, human health, construction, creative industry, wholesale & logistics, and food &

agribusiness. They include individual consultations, establishing Innovation Action

Plans, organizing workshops on relevant themes, etc. Syntens conducts these

interventions within a limited timeframe. The Syntens consultants work impartially and

match the entrepreneur to valuable parties via their extensive network of companies and

institutions.

Syntens employs approximately 350 people. Its head office is located in

Nieuwegein, and Syntens has fifteen regional offices throughout the Netherlands. There

are close contacts with the national, provincial, and regional government, political circles

and a large number of industrial associations operating in the region. Thanks to the

regional network structure, the innovation consultants are easily accessible for

entrepreneurs.

Syntens‟ activities are funded by the Dutch Ministry of Economic Affairs,

Agriculture and Innovation, regional governments, and several other public sector

organisations. This allows Syntens to operate independently and free of charge for the

entrepreneur. The Sustainability Quick Scan was developed in co-operation with

consulting firm BECO with the support of the Ministry of Infrastructure and

Environment. In exchange for Syntens‟ involvement the entrepreneur is expected to be

responsive and “willing and able” to innovate.

3.2 Sustainability Quick Scan

To enhance the rate of SMEs in the Netherlands actively implementing sustainability,

Syntens deployed the online Sustainability Quick Scan (SQS). Via an online marketing

campaign, supported by printed media, SMEs were invited to fill in the SQS. As a

reward, SMEs received the book “Ben er morgen nog!” (Tomorrow still here!), which

contains practical information about green businesses, success factors, cases and tips.

Entrepreneurs gained valuable insights about their business through immediate feedback

of the results of the SQS. Furthermore, a few days later they physically received the book

as mentioned above.

The online Quick Scan comprises of questions divided into six categories. The

first category contains informative questions, answerable by filling in comments or

choosing from a menu. The other five categories, comprising of 34 questions, are

answerable with responses “Yes”, “No” or “No idea” (I don‟t Know). Only one answer is

possible. The six categories are described in table 1. A detailed overview of the questions

is in appendix A.

Table 1. Question categories Sustainability Quick Scan

Category Subject Answer type

General Description of participating SME Open or menu

Ambition Vision on sustainability and plans for the future Yes/No/No idea

Product & Service Level of sustainability in products and services Yes/No/No idea

Market & Marketing Positioning, identity and communication Yes/No/No idea

Technology & ICT Energy and material conservation, logistics and

eco design

Yes/No/No idea

Organisation &

Processes

Employee empowerment, diversity, culture,

cooperation and partnering

Yes/No/No idea

After completion, a total relative score appears online. This rates the SME in four

categories, depending on the total relative score. In table 2 the four categories are

described. The entrepreneur is presented with one of the four answers, depending on the

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score, i.e. the percentage of “Yes” answers. For each “Yes” answer one point is awarded.

The answers “no” and “no idea” do not attribute to the score. A total percentage is

calculated by dividing “Yes” answers by the total amount of questions (see appendix A

for an overview of all questions).

Table 2. Output of the Sustainability Quick Scan

Score Reply

0-25% You have not implemented sustainability. Maybe it is not important to

you?

25-50% You have taken some steps to make your company more sustainable. You

can take it one step further and attain a competitive advantage by going

green. How? Get into contact with your local Syntens consultant and

explore your opportunities.

50-75% You are, compared with other entrepreneurs, already well advanced with

implementing sustainability. Have you taken steps to embed it in your

organisation and supply chain? Your Syntens consultant can help you to set

up a sustainable innovation plan.

75-100% You are amongst the leaders in the Netherlands. Sustainability has become

an integral part of your business. How can you advance even further? How

can you help others as an ambassador? Make an appointment with your

Syntens consultant to talk this over.

3.3 Evaluation methodology

A quantitative evaluation was conducted to assess the level of sustainability in SMEs.

First, in September 2009 the SQS was uploaded onto the Internet. From September up to

December 2009, over 1,000 SMEs filled in the scan. After an initial period of debugging,

the answers to the questions of every completed scan were stored and added to a database

for evaluation. The data acquired through the scan were subsequently downloaded to

excel and SPSS. A dataset of 1065 entries was thus created.

Several analyses were conducted. First, the distribution of answers was

established, taking into account a correction for „No idea‟ answers. Second, a set of

hypotheses was tested. The hypotheses were derived from academic literature and

supported by practitioners cases and practitioner literature. On the basis of subsets of

questions from the SQS, constructs were formed to test the hypotheses. Each construct is

formed to be a proxy for success factors of sustainability as derived from literature in

paragraph 2 of this article. The constructs are described in table 3.

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Table 3. Constructs and selected questions

Construct nr Question

Competitive advantage 2 Sustainable entrepreneurship strengthens our competitive

position

17 I see opportunities to attract new customers with a more

sustainable product and/or business

Cost Savings 1 Sustainable entrepreneurship can reduce costs for our

company

21 Our company tries constantly to reduce the waste of

materials, excipients and production errors

22 Our company minimizes (road)kilometres by making

passenger and freight transportation as efficient as

possible

34 Our company knows how to acquire finance and grants

for sustainable entrepreneurship

Supply chain 5 I think we should take initiative in our supply chain

(suppliers, customers) to commit to sustainability

9 Our company has a policy to purchase from sustainable

companies

13 Our company delivers services which help our customers

to become more sustainable

26 Sustainability is part of our business strategy

30 In sustainability we exchange knowledge and experiences

with sector and external parties

29 Our company cooperates with suppliers and customers in

the business area to become more sustainable together

33 Our company is critical of work conditions at foreign

suppliers

Marketing 14 Our company has explored which sustainable topics are

important to our customers

15 Sustainability is part of our identity and communication

16 Our company sees opportunities to differentiate in

sustainability

17 I see opportunities to attract new customers offering a

more business and/or products

The constructs from table 3 will be used to test the hypotheses as derived earlier. To

analyze the results the hypotheses will be tested using a T-test, in which the total scores

of enterprises are compared with a group that scores high on the construct linked to the

hypothesis (a lot of questions within the construct are answered with “yes”), and a group

that scores low (a lot of questions within the construct are answered with “no”).

4 Results

In this section, results will be presented of the internet based Sustainability Quick Scan

for SME entrepreneurs.

4.1 Success factors for sustainability

A set of 1065 completed Quick Scans was „cleaned‟ down to n=783 by excluding all

entries containing more than 30% “No idea” per completed Quick Scan. The dataset is

normally distributed with an average value of x= 19,92 and a standard deviation of

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6,221. This forms the dataset used for further statistical analyses. The distribution is

shown in figure 1.

Figure 1. Distribution of the SQS responses

For testing the hypotheses mentioned earlier, the constructs stated in table 3 were used.

The first hypothesis tested reads “Enterprises invest in sustainability mainly for financial

reasons”. To test this hypothesis, the constructs “competitive advantage” and “cost

savings” were used. Each construct was awarded a scoring rate, i.e. the amount of “yes”

answers to the questions in the construct. The construct “competitive advantage” has a

scoring rate from 0 to 2 and “cost savings” has a scoring rate of 0 to 4. Enterprises seem

to score quite high on both constructs. In figure 2 and figure 3 the scores on the two

constructs are shown.

Figure 2. SQS responses on construct “Cost Savings”

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Figure 3. SQS responses on construct “Competitive Advantage”

In figure 4 the scores to the questions in both constructs have been plotted against each

other. Only three respondents would state a “no” to both series of questions, whilst 139

respondents would score all questions with “yes”.

Figure 4: Cost savings (horizontal) vs Competitive advantage (vertical)

Using these scores, the correlation between the two constructs was calculated to

determine if enterprises only focus on one of the two constructs, or put effort in both. The

correlation matrix of this calculation can be seen in table 4. The value of the Pearson

Correlation is only 0,109. Therefore it‟s not possible to draw a strong conclusion about

how the two constructs correlate.

It seems that companies are well aware of the financial benefits sustainability

could offer to them as seen by the high scores on the construct “competitive advantage”

and “cost savings”. Also, even though there‟s a presumption that enterprises which score

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high on “competitive advantage” also seem to score fairly high on “cost savings” this

cannot be concluded from the correlation analysis applied.

Table 4. Correlation matrix of “competitive advantage” and “cost savings”

A second analysis pertains to the concept of cost savings as a driver for implementing

sustainability. Or otherwise stated, to test the link between financial rewards and

sustainability. The hypothesis investigated stated “Enterprises that state to think that

sustainability cuts costs, undertake more activities related to sustainability”. To test this

hypothesis, two groups of respondents were made using question 1 (“Sustainable

entrepreneurship can save expenses for our company”) from the SQS. The first group

contained companies that responded positively to this question, the second group contains

enterprises that responded negatively. The overall scores of both groups could be

calculated and subsequently compared using a T-test. The P-value of the T-test appears

smaller then 0,05; which helps us conclude that the null hypothesis can be rejected. With

the null hypothesis being rejected, we can conclude that there‟s a significant difference in

total scores of companies that replied “yes” to most of the questions in the construct

compared to companies that replied “no”. So, the total scores show significant difference,

but can the mere attitude towards cost savings and sustainability predict the level of

sustainability in a company? This is tested using a regression analysis. A value R² of

0,170 is found, which is very weak. Which means this model is not representative for the

total scores. A regression was therefore not established.

The evaluation of the scan continues by testing the link between “greening your

supply chain” and the general level of sustainability of the company. The following

hypothesis was tested to study this link: “When a company engages in sustainability, they

also look at the sustainability of customers and suppliers”. For further analyzing the

construct “supply chain” (see table 3) was used.

After cleaning up the data set of the construct, a T-test was run for the

enterprises that answered the questions in the construct with “yes” compared with the

enterprises that answered “no” or “no idea”. The groups were sampled to be “five or

more questions answered by no” and “five of more questions answered by yes”. The

“No” group scored an average of 11,79 (standard deviation 4,823) on the total of the Scan

questions. The “Yes” group scored higher on the total of questions, with an average of

20,827 (standard deviation 3,606). To prevent a bias, the construct questions were

subtracted from the total score in both groups. The table of the T-test is shown in Table 5.

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Table 5. Test results on “supply chain”

After studying the Levene‟s test for equality the conclusion has to be made that the

variances of the groups are not equal. So “equal variances not assumed” is used. The P-

value of the T-test appears smaller then 0,05 therefore we can conclude that there‟s a

significant difference in total scores of companies that replied “yes” to most of the

questions in the construct compared to companies that replied “no”. However it‟s

important to see how these questions may have predictive value for the total score. This is

tested using a regression analysis. A value R² of 0.715 is found, which is decent. The

model is representative for the total scores. With these results we can conclude that the

sustainability of the supply chain seems to be an important factor for enterprises

predicting to what extent they‟re able to successfully apply sustainability into their

organization.

Companies which value the impact of sustainability on their positioning and

marketing are thought to be keener on sustainability in general. Therefore, the hypothesis

“Internal sustainability correlates with marketing” is tested. The construct marketing

from table 3 is used. The scores are again divided into 2 groups, a group that scores low

on marketing and a group that scores high. The results of the T-test are shown in Table 6.

The T-test results in a significance of 0,000. This concludes the null hypothesis can be

rejected and internal sustainability and marketing show a significant correlation. This

means a large portion of the enterprises which score relatively high on sustainability also

score high on the marketing scale. This relates back to the first hypothesis tested in the

results section where the importance of marketing was also raised.

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Table 6. Test results for “Marketing”

4.2 Profiles of sustainable SMEs

Using the insights from the tests and literature, an attempt is made at identifying profiles

with regards to sustainability within SME enterprises. The following profiles are

determined from a practitioners viewpoint:

1. Beginners

2. Gold diggers

3. Hippies

4. Ecopreneurs

The beginners are in the first stadium of exploring sustainability (these are „average

entrepreneurs‟). Gold diggers only look at ways to use sustainability to cut their costs or

get a competitive advantage, but they don‟t actually set out to green their supply chains.

They are often referred to as “green washers”. Hippies do exactly the opposite, they do it

out of idealism and focus on implementing sustainability in the supply chain in which

they operate without reaping the financial benefits. The fourth and last group is the group

of “ecopreneurs”. Enterprises from this group focus on the financial benefits

sustainability offers them as well as the supply chain. They are working on sustainability

at every level (these are highly sustainable enterprises, who will be referred to as

„ecopreneurs‟). The profiles are presented in Figure 5.

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Figure 5: Profiles of SMEs differentiating on sustainability

Hippies Ecopreneurs

Financial and proposition axis

Entrepreneurs Gold diggers

Green supply chain axis

To test if we can find evidence for this classification in the data we test the hypothesis

“Different profiles can be distinguished in sustainability around Financial reasons,

sustainability in the supply chain and sustainability in general” is tested. The second and

fourth hypothesis appear to be very relevant for helping test this hypothesis. In the second

hypothesis the financial aspect is featured, and in the fourth hypothesis the relation with

the supply chain around the enterprise is examined. To further test the hypothesis the

constructs “cost savings” & “competitive advantage” (combined together these represent

the financial reasons) and the construct from hypothesis 4 “supply chain” are used. To

see how these two constructs correlate a table is constructed to explain the different

profiles.

Table 7. Profiling using “supply chain”, “cost saving” and “competitive advantage”

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From this figure a pattern can be recognized. The scores seem to group around the right

side, this means that on average there are more gold diggers then hippies present in the

population of SMEs. For an enterprise to grow from an entrepreneur (beginner) to an

ecopreneur (advanced enterprise) we believe that a company needs to have a good view

on how to use this sustainability in the favor of their commercial activities. A term that

comes to mind here is the „value proposition‟ of a company. An enterprise that is able to

integrate sustainable activities into their value proposition in a successful way will more

likely score high in terms of overall sustainability. Therefore, the successful

implementation of sustainability in the value proposition seems to be a big success factor

for sustainability overall. Another factor in the evolution process towards becoming an

ecopreneur is understanding the importance of the sustainability of the supply chain the

company is part of. The „greener‟ the supply chain, the more effective an enterprise will

be in implementing sustainable features into its operations. Therefore another relevant

success factor for sustainability within an enterprise seems to be how it handles the

„green‟ nature of the supply chain around it.

5 Discussion

The level of sustainability in companies shows a normal distribution according to the data

of the online SQS. Companies do not seem to be divided in two distinct groups, but much

more as a normal population when it comes to the level of sustainability. Large groups of

e.g. beginners cannot be singled out. Nor is there a large group of very advanced

companies. The Sustainability Quick Scan questions pertain to concrete attitudes as well

as concrete activities to be carried out if a SMEs is to “green its business”. SMEs are

able to reflect on their ambition and strategy, but also on marketing, technology and

processes with regards to sustainability. Measuring and monitoring sustainability in

SMEs is possible on different levels, i.e. from „agenda and priority‟ level down to

considering concrete activities. Of course, the indexing level is not applicable here

Companies responding to the SQS value the cost savings and competitive advantage

side of sustainability. Financial benefit, or a clear business case, is a strong prerequisite

for implementing sustainable activities. This confirms the anecdotic evidence in separate

SME cases, that cost savings trigger entrepreneurs to implement sustainability (Peutz,

2011). It is in line with a study carried out by The Boston Consulting Group among

predominantly large companies, where reduced cost and improved competitive advantage

are the single most important perceived benefits for the organisation in addressing

sustainability (Haanaes, 2011). Also, in more general terms, since the cost savings and

competitive advantage dimensions contribute to economical performance, a link between

company performance and sustainability according to Artiach et al (2010) seems to be

confirmed by the responses of SME entrepreneurs. A certain business logic before

starting with sustainability implies an important lesson for professionals working with

SMEs. A clear „what‟s in it for me‟ must be visible at the start. Also, relatively few

„hippies‟ emerge from the group of SMEs doing the scan. Idealism, i.e. going well ahead

with implementing without tangible cost savings or advantages, is rare among SMEs. On

the other hand, the phenomenon of “green washing”, when SMEs say to be green but

hardly implement it, is also relatively rare among SMEs. It is shown however that green

washing is more common than idealism and hippies. Saving cost alone is not a single

driver for implementing sustainability in SMEs. The regression analysis yields a R² of

0,170, which is very low.

Keijzers and Bos-Brouwers (2008) found that implementing sustainability in SMEs is

moderated by the ability to cooperate in the supply chain and implement sustainability

with suppliers. The results confirm a very strong link between the level of sustainability

in SMEs and the amount of attention that these SMEs focus on the supply chain.

Responding SMEs with a high score on the supply chain questions also score high on

their total level of sustainability (total score). The opposite is also true. The predictive

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value for supply chain questions is high. From the regression analysis it is shown that

with a value R² of 0.715 the total sustainability of the SME can be predicted. This yields

an important lesson for practitioners. Large multinationals with global brands have been

very wary to ensure sustainability across the full length of their supply chains. Incidents

with “not-so-sustainable” suppliers have damaged brand values before (Pennings, 2008).

Multinational company managers have been keen to implement systems to ensure

compliance all along the supply chains (Dutilh, 2008). This study shows that SMEs are

also aware of the importance of compliance in the supply chain, since supply chain

related sustainability activities and attitudes predict in a way the total commitment to

sustainability. The rule of thumb for professionals and policymakers alike is that

committed SMEs have their supply chain aligned to their sustainability ambitions.

Improving insight in the supply chain, or improving co-operation skills can be useful

tools to help SMEs with “greening their business”.

Keijzers and Bos-Brouwers (2008) also found that a „green proposition‟ contributed

to the success of implementing sustainability in the SME. The results here show a strong

link between marketing and total implementation of sustainability. SMEs need to

translate their sustainability efforts in their external marketing. Auger et al (2008) and

Verhoef and Van Doorn (2009) showed that consumers are demanding more features

than sustainability only. SMEs with a high score on marketing combine this with more

implementation of sustainability on other dimensions. SMEs seem to be aware of the fact

that clients do not trade off value for sustainability, hence the overall higher level of

sustainability once a SME „greens‟ its identity, communication and products.

Profiles constructed by tested drivers and incentives of sustainability deliver

additional insights for professionals helping SMEs to implement sustainability. Out of the

data in the SQS a number of profiles were identified. The segmentation goes along the

lines of proposition and financial on the one hand and the level of “greening your supply

chain” on the other hand. In the start-up phase a company will not score high on either

aspect, hence “the beginner”. After this start-up phase a company can decide for itself

whether it wants to invest in both these aspects or focus on just one. This leads to two

extreme scenario‟s which are described by “hippies” (enterprises which mainly/only

focus on the sustainability related to the supply-chain level, i.e. getting it done) and “gold

diggers”(enterprises which mainly focus on the sustainability related to the financial

benefits and proposition, i.e. getting it sold). Being an Ecopreneur is to successfully

implement both of these factors and become an enterprise that operates in a sustainable

way on both the supply-chain level and the “green proposition” level. De segments or

profiles provide a basic concept to map SMEs. The SQS output data can be used to do so.

Practitioners can use the segments to create awareness by discussing an SME‟s position

in the 4-segment framework. If SMEs desire to accelerate their sustainability the two

drivers can be analysed and actions to improve started.

6 Conclusion

In this paper we have introduced an online self diagnosis tool for sustainability, the

Syntens Sustainability Quick Scan. Over 1,000 respondents filled in the scan and their

data have been stored and analysed. The level of sustainability, as defined by the score on

the scan questions, follows a normal distribution. The results also indicate a very strong

tendency among SMEs to engage in sustainability if financial benefits by means of cost

savings or a competitive advantage can be attained. It must pay to be green. Practitioners

need to be aware of this, and stress the “added value” of sustainability in order to be able

to work with SMEs on this topic.

Derived from practitioners cases and academic literature, two drivers for accelerating

sustainability in SMEs emerge. These are the ability to implement sustainability in the

supply chain and the ability to combine sustainability with (new) features and qualities in

16

products and services. The Scan data seem to confirm these drivers. First, the results

confirm a very strong link between the level of sustainability in SMEs and the amount of

attention and effort which these SMEs focus on “greening” their supply chain. Second,

the results show a strong link between marketing and the total level of sustainability.

SMEs with a focus on communicating and positioning their sustainability efforts in

combination with good value services and products, seem to be more advanced on other

business area‟s with sustainability as well. Practitioners should work on these drivers, or

success factors, when seeking to accelerate sustainability in SMEs.

Finally, a first attempt is made to create a framework with a typology based on the

incentives and drivers for sustainability in SMEs. Four practical segments emerge

enabling practitioners to map each SME and frame its position and level of sustainability.

To stimulate SMEs a gap analysis can be carried out on the drivers. To move up in the

segments is to improve the individual performance on these drivers. Further work is

required on understanding the drivers, in combination with skills and capabilities of

SMEs needed to handle these drivers. This will greatly improve the effect of

interventions led by practitioners on accelerating sustainability implementation in SMEs.

17

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Appendix A

English translation of the questionnaire used for measuring level of sustainability in

SMEs.

Table X Questionnaire Syntens Sustainability Quick Scan

Category Question Subject

General What is the name of your company?

In which sector is your company active?

What is your position in the company?

How many employees does your company have?

Which category refers to your company?

Does your product need energy (natural gas, electricity, other)?

Ambition Sustainable entrepreneurship can save expenses for our company Cost saving

Sustainable entrepreneurship strengthens our competitive position Growth in

turnover

Our company would like to achieve more in environmental issues Growth in

than our competitors turnover

I think it is important that attention for sustainability is well Integration

anchored in our organisation

I think that we should take initiative in our supply chain (suppliers, Integration

customers) to also make use of sustainability

I think that sustainability is/will be a requirement for successful Vision

Entrepreneurship

I would like to leave a better world for the next generations Vision

Product &

Service

Our company replaces resources and materials by sustainable Means and

varieties Materials

Our company has a policy to purchase from sustainable companies Sustainable

purchase

Our company develops sustainable products, for example biologi- Sustainable

cal, through less use of materials, lower use of energy, recycling products

Our company develops products with an optimal lifespan/ Lifespan

sustainability/usefulness

Our company works with people and/or animals; we take extra Welfare ani-

care in their welfare mals+people

Our company delivers services which help our customers to Sustainable

become more sustainable services

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Category Question Subject

Market &

Marketing

Our company has explored which sustainable topics are important Market

to our customers research

Sustainability is a part of our identity and communication Communi-

cation

Our company sees opportunities to differentiate in sustainability Differentiate

I see opportunities to get new customers with a more sustainable Market

product and/or business expansion

Technology

& ICT

Our company uses new technology as much as possible to make Technology

the job more enjoyable for the employees for people

Our company uses efficient machines and appliances as much Efficient

as possible appliances

Our company does „good housekeeping‟; save energy, Good house-

separate waste keeping

Our company tries constantly to reduce the lavishing/squandering Lavishing /

of materials, excipients and production errors squandering

Our company minimizes her (road)kilometres by making her Kilometres

passenger and freight transportation as efficiently as possible

In our business the paper information has been replaced as much ICT

as possible by digital information

Our company has facilities to generate sustainable energy Sustainable

(windmills, solar panels, geothermal) energy

We have in-house knowledge of sustainability, eco design,

cradle to cradle Knowledge

Organisation Sustainability is a part of our business strategy Strategy

& Processes Our company meets ISO 14000, has an environmental guide Processes

and/or a Quality & Certification, OSH, and Environmental manager

Our company involves her employees in the process of business Employees

Sustainability

Our company cooperates with suppliers, customers and/or in Cooperation

the business area to become more sustainable together chain

In sustainability we exchange knowledge and experience with Knowledge

sectors and external parties exchange

Our company has a sustainability culture Culture

Our company pursues a diversity in workforce so that people Diversity

with a lesser capability will also be employed

Our company is critical of work conditions at foreign suppliers International

Our company knows how to acquire finances and grants for Financing

sustainable entrepreneurship