Lynn Johannson October 19, 2005

Based on an extrapolation of APEC numbers, there are over 89 million small to medium-sized enterprises in this world, which represents 98 to 99% of all legally constituted employer businesses. Depending on the definition of the day, somewhere between 55% and 78% of these are micro-enterprises, independent business with less than 10 people. This number does not include one person -shops. These entities have been virtually ignored in the sustainability discussions to date. Individually, an SME is unlikely to cause an Exxon Valdez or Brent Spar event. Yet, it is the cumulation of seemingly trivial everyday contributions to environmental impact that is of concern. Not only do SMEs collectively impact the environmental quality/health of a country, in many cases micros represent upwards of 50% of the GDP. Research indicates that when the 'libido' of the SME community is depressed the GDP falls, and so does the wealth of a nation. The bottom line is while there is a need for them to individually improve their environmental performance, extreme care must be used in how they are asked to improve. Scare tactics or SWAT team approaches have blown up in the face of some regulatory agencies when they found the barrier was not environmental or scientific literacy, it was literacy (ranging from illiteracy to language barriers where the SME was not fluent in the resident country's primary tongue).

There is much discussion in various forums today about the need to get SMEs 'into the fold'. The challenge of engaging SMEs is not limited to one country, one authority, or one sector. Authorities in many countries are buying into the idea that SMEs are a source of environmental impact that has been largely ignored to date in their regulatory activities. Ignored in several ways. One, regulation serves as a glass ceiling not a floor to SMEs. Two, many authorities have risk assessment mechanisms that are insensitive to the resources, nature and culture of SMEs. Three, authorities often err on speaking for SMEs, without engaging in dialogue with SMEs. There are other aspects, let's leave it to those three for now. In speaking with SMEs, they have stated an underlying and growing level of frustration, whether discussed in forums like the World Conference on Small Business, in the ISO Forum for Environmental Management Systems, in clustered sector discussions or one on one. Regulation is not seen as an effective nor desired mechanism for behaviour change. Research to date from various sources (Canadian and European) has indicated that SMEs believe that sustainable development (that is environmentally sustainable economic development) is doable. They also indicate support for good regulation, although the many environmental laws that exist are not seen as being good, when they are known or understood. (A sidebar of this is the need to promote SMART regulation being applied to environment, health and safety). Some of the barriers articulated by SMEs include: The lack of internal expertise The cost of compliance, being prohibitively more expensive to an SME than a big business. The absence of tools right-sized designed for SMEs. The absence of incentives. In some circles it is felt that this last point is the one where greatest attention is needed. I am interested in hearing from members of the list serve examples where incentives have been used to promote the adoption of Environmental Management Systems whether ISO 14001 or EMAS or other perhaps very simplified pathways to sustainability, which have resulted in real behaviour change. With all due respect to authorities by any definition I am not as much interested in a description of the latest funding program. I am interested in a discussion of the results where a critical mass of the SME population has been able to make change based on incentives, or a combination of incentives and SMART Regulation. I look forward to responses and discussion on this issue. I am going to follow this with a REAL TIME case study that I am tracking in the UK.

Lynn Johannson B.E.S., (Hons) M.Sc.,

FRSA Georgetown,
Ontario CANADA