The matter of how sustainable a potential supplier, stakeholder or partner is, is a priority for as many as nine in 10 small businesses, according to new research by Novuna Business Finance.

Polling a sample of more than 1,000 small business leaders, the results showed that 89% said they would check the sustainability credentials of a company in some way before deciding to work with them. 

As sustainability issues become increasingly important, both the desire to work with green suppliers and scepticism of bold green claims are on the rise.

Recent research found as many 76% of small businesses said they intended to ‘green’ their supply chain last year, while the Competition and Markets Authority (CMA) and Financial Conduct Authority (FCA) have both introduced new measures to ensure green claims made by companies do not mislead.

58% would seek out official certifications, accreditation and listings 

The results showed that almost half of small business leaders would actively check for an official certification that recognises the organisation as meeting certain sustainability standards. Additionally, around a third would check an organisation’s listing as a sustainable business on groups such as the Federation of Small Businesses or British Chambers of Commerce.

Interestingly, it was leaders of larger businesses (up to 250 employees) that were more likely to seek out official accreditation (64% vs 53% of businesses with fewer than 100 employees). 

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Examining a company’s claims

A company’s own published materials were also a consideration highlighted by the survey. Around a third (34%) said they would research the company’s green policies and practices on its website, with an additional 31% saying they would check reports and mission statements that outline green objectives.

More directly, just over a quarter (28%) said they would ask representatives about the company’s attitude towards sustainability as part of the process to decide whether or not to work with them. 

Broader reputation a significant factor

Around a third (35%) said that they would do a cursory search on the company both on the Internet and on social media to check what others had said about its sustainability credentials. Additionally, around one in five (22%) said they would ask close contacts of the company to get a sense of a partner’s reputation as a sustainable company.

Jo Morris, Head of Marketing and Insight at Novuna Business Finance commented: “We are quickly reaching the point where many small businesses will seek out greener options if it falls within the bracket of what they consider to be affordable. This wave of interest is met with an ever-increasing range of options to choose from.

“This means that business leaders are now forced to apply an additional layer of rigour to sort the genuine from the “too good to be true”. What we see from this research is not only the desire to work with green suppliers and stakeholders as part of their day-to-day operations but also the extent to which they are prepared to check any claims.

“The new measures that are being introduced by the likes of the CMA and FCA will give small business leaders more confidence in the decisions that they make, however, the importance of a business carrying out its own research cannot be overstated. Understanding the right questions to ask, and where to find this information, is a key part in making good sustainable choices for a business.”

What business leaders would do before working with a potential partner

  • Check certification and accreditation/listings as a sustainable businesses [Net] (58%)
    • Check Certification and accreditation from internationally recognised bodies (43%)
    • Check listings as a sustainable businesses on groups such as the Federation of small businesses, British Chambers of Commerce, etc (32%)
  • Check company reports and mission statements that outline green objectives (31%)
  • Research the company’s green policies and practices on their website (34%)
  • Ask the company about its attitude towards sustainability (28%)
  • Ask contacts about the company, and its reputation as a sustainable company (22%)
  • Do a search on the company on the internet/social media to check their sustainability credentials (35%)
  • Other (4%)
  • N/A – I would not check sustainability/green credentials when looking for a supplier/partner to work with (11%)

Average SME plans to invest £321k in their business