Environmental

Responsibility and the Small

Business Sector
Corporate Social &
(supply chain)
Environmental
Responsibility

Carla Higgs
Master of Science (Environmental Science)
Small business journey

Experience Inspire CSR

Research
in small • CSR services
project
business for small
business

Corporate Social &

Environmental
Responsibility Solutions
+ Rationale: Small Business

• Owner, some family member/s and one or two paid employees

Micro enterprises (total of up to 5 employees)
• >5 employees • Lack formality in terms of business licences
• Turnover >R200,000 • Do not usually qualify for VAT registration (turnover under VAT
registration level)

Very small
• >10 employees • Self-employed and or enterprise employing a limited number of
• Turnover >R500,000 or R6mill persons (less than 10 paid employees)
(sector dependant)

• Constitute the bulk of established small businesses

Small enterprises 5 to 50 paid workers
• >50 employees •
• Owner managed
• Turnover >(R1 or ) R6 million • Tax registered
(sector dependent)
• Meet formal business registration requirements

Medium enterprises
• >200 employees • Owner – manager controlled
• Up to 200 paid employees
• Turnover >(R5 or ) R19 million • Capital assets of a value of up to about R5 million
(sector dependent)
Adapted from the National Small Business Amendment Act of 2003
Corporate Social &
Environmental
Responsibility Solutions
Video clip
The economic and social value of small business
 + Small Business in South Africa
2,8 million SMEs
~ 91% of the formal business
entities
Small to medium enterprises
~ 52% and 57% of GDP
~ 61% of employment
Source: Department of Trade and Industry
The sheer number of SMEs means
that their social and environmental
impacts are substantial
are drivers of economic
growth, and represent an
important means to address
the challenges of job
creation, economic growth
and equity in South Africa
Corporate Social &
Environmental
Responsibility Solutions
+ Rationale: Small business and CSR

Investigate the extent outsourcing of waste management and

recycling to small businesses

Examine how and why small businesses are engaging in CSR

(environmental responsibility)

Determine the methods that small business use to monitor their CSR
(environmental responsibility) efforts

Critically assess environmental responsibility in the supply chain

Corporate Social &

Environmental
Responsibility Solutions
+ Rationale: CSR and Small Business
Small business is a significant
sector in terms of their
economic, environmental and
social impacts.
Small business exhibit unique
characteristics.
CSR frameworks developed
for business need to be
tailored to suit small
business.
Little is know about CSR is
small business (even less in
the South African context).
Small businesses are not
merely small versions of big
businesses but differ from
large corporations in a variety
of ways including the different
ways in which CSR is perceived
and practiced. CSR practices
developed for large
corporations cannot simply be
transferred to small businesses
(Jarvis, 2004, Coppaa and Sriramesh,
2013).
Corporate Social &
Environmental
Responsibility Solutions
+ Rationale: Waste Sector
 The National Environmental Management: Waste
Waste avoidance and reduction
Act 2008 (Act 59 of 2008) provides for integrated
waste management and formalises the waste
management hierarchy within South African
legislation. Re-use

 The National Waste Management Strategy

provides a plan to provide practical effect to the
Recycling
Waste Act; avoidance or minimisation of
generation of waste, and measures to re-use,
recycle or recover waste.
Recovery
 It is expected that the waste sector will
contribute to the green economy through job
creation and participation by small businesses
Treatment
and marginalised communities in the waste & disposal
management activities.

Source: DEA (2011) Corporate Social &

Environmental
Responsibility Solutions
+ Rationale: Waste Sector (packaging waste)
Manufacturing
 Packaging waste is a growing and important consumes
Manufacturing
waste
waste stream accounting for ~ 18% of natural resources

municipal waste in South Africa (PACSA, 2012).

 The Waste Act introduces extended producer Consumer Post-

purchases, then consumer
responsibility (EPR) whereby manufacturers discards of packaging
can be held responsible for post-consumer packaging waste

impacts of their products.

 Government has targeted packaging waste as a Use

priority waste stream for which EPR should be

implemented (Nahman, 2010).
Consumer
purchases, then Post-consumer
 The packaging industry is under pressure to discards of waste
product
reduce the environmental impacts of its
products.
Corporate Social &
Environmental
Responsibility Solutions
+ Rationale

JSE /
Multinational

Accountability (CSR, governance and EPR)

Small business

Large
business

CSR
Packaging waste
(Waste Act & EPR) (environmental Multiple
small
responsibility)
business

Corporate Social &

Environmental
Responsibility Solutions
 Methodology
Criteria 1 JSE or MNE organisation

Criteria 2 Located in eThekwini

Willing to disclose details of waste

Criteria 3 contractor/s & packaging suppliers
Single case study

Primary interview: JSE or MNE

Criteria 1 Waste management contractor (large)

Figure 2 eThekwini Metropolitan Area (Source: Google Maps)

Willing to disclose details of waste
Criteria 2
contractor/s

Criteria 3 Small business waste contractors

Secondary interview: multiple small packaging & waste

businesses
Corporate Social &
Environmental
Responsibility Solutions
Figure 1 Selection of companies for a singular case study
 The Sample
Case study 1 Case study 2
JSE listed (n=2)

Company A Company B
Producer of beverages Producer of items
Large (n=3)

Company A1
Company A2 Company B2
Producer of beverage
Waste management Waste management
and other packaging
SMME (n=15)

Company A2.1 Company B2.1

Company A1.1 Company B1.1
Small business Small business
Small business supplier Small business supplier
contractor contractor

Company A1.2 Company A2.2 Company B1.2 Company B2.2

Small business Small business Small business Small business
contractor contractor contractor contractor

Company A2.3 Company B2.3

Small business Small business
contractor contractor

Figure 2 Multiple case studies

Corporate Social &
Environmental
Responsibility Solutions
Findings

Literature review Study Inspire CSR

Corporate Social &

Environmental
Responsibility Solutions
 Finding 1: Outsourcing & due diligence
Small
business
Small Small Small
business business business
Small
Small business
Small Large business
business business Small
business
Small
Small JSE / Large business
business Multinational business
Small
Small
business
business
Large Large
business business Small
Small Small business
business business

Accountability (CSR, governance and EPR) Accountability (CSR, governance and EPR)

Corporate Social &

Environmental
Responsibility Solutions
Finding 2: The environmental impact of small business

70% contribution of industrial

60% of commercial waste in
pollution in Europe (Hillary,
England (OECD, 2007).
2004).

80% of pollution incidents in 91% of waste in Wales (OECD,

England (OECD, 2007). 2007).

65% of industrial waste and in

20% or 195.2 mega tonnes of
China’s Jiangsu Province and
carbon emitted in the UK
67.7% are causing serious
(Carbon Trust, 2005).
pollution (UNEP, 2003).

40-45% of industrial air 60-70% of industrial waste

emissions in France (Daddi et production in France (Daddi et
al, 2010). al, 2010). Corporate Social &
Environmental
Responsibility Solutions
 Finding 2: The environmental impact of small business

Incorrect storage of a flammable substance at a

small business in the supply chain of a JSE listed
corporation.

Oil spill at a small business in the

supply chain of a multinational
enterprise. Corporate Social &
Environmental
Responsibility Solutions
Finding 3: The environmental impact of the supply chain

GHG emissions Water footprint

 “The findings show that upstream “The water footprint of the beverage
supply chains are responsible for over studied has a water footprint of 150
90% of carbon emissions, while direct to 300l of water per 0.5l bottle, of
emissions and those from the first
which 99.7–99.8% refers to the
three-layers of food manufacturing
supply chains are found to be supply chain” (Ertug Ercin et al, 2011).
responsible for approximately 80% of
total carbon emissions” (Kucukvat &
Samadi, 2015).

 “In the United Kingdom, supermarkets Although most companies focus

are leading operators in the food on their own performance
retailing sector. With 75 to 90% of a - it is important to address the
typical food product's “carbon
complete supply chain
footprint” occurring in the supply chain
upstream of the point of sale” (Tidy et al,
2015).

Corporate Social &

Environmental
Responsibility Solutions
Finding 4: Environmental responsibility in small business
Uptake of environmental responsibility by small business

Consensus in the literature

exists around a lack of
27% engagement on the part of
small business in
environmental practices and
Environmentally
certified
small business have generally
Non- been portrayed as ‘hard to
environmentally reach’ and ‘lagging’ in relation
certified
to environmental sustainability
due to their low take-up rates
of sustainable business
73% practices
(Cassells and Lewis, 2011)

Corporate Social &

Environmental
Responsibility Solutions
 Finding 4: Environmental responsibility in small business
Uptake of environmental responsibility by small business

Environmentally Non-
Commitment to environmental responsibility certified
environmentally
certified

Perceive that their business has a responsibility to protect the environment

Ability to describe the term environmental responsibility

Environmental certification

Environmental management system

Environmental policy

Evidence of procedures to identify environmental legal requirements

Identified the impacts of their business operation on the environment

Designated environmental employee/representative

Corporate Social &

Environmental
Responsibility Solutions
Finding 4: Environmental responsibility in small business
Barriers to uptake of environmental responsibility by small business

Barriers
 Lack of environmental knowledge
(some respondents remarked that
they would like to improve their
environmental performance but
were not sure what to do)
 Limited budgetary resources
Difficulties
 Difficulty dealing with
environmental aspects and
impacts
 Difficulty dealing with
environmental legislation

 Limited HR resources

“environmental responsibility, although a

concern, is it not a priority for my
business”.

Corporate Social &

Environmental
Responsibility Solutions
 Implications for the green economy

“What is the definition of Green Economy in South African context?

A more formal definition can be regarded as a “system of economic

activities related to the production, dis­tribution and consumption of
goods and services that result in improved human well-being over the
long term, while not exposing future generations to significant
environmental risks or ecological scarcities”. It implies the decoupling of
resource use and environmental impacts from economic growth. It is
characterized by substantially increased investment in green sectors,
supported by enabling policy reforms. The Green Economy refers to two
inter-linked developmental outcomes for the South African economy:

 Growing economic activity (which leads to investment, jobs and

competitiveness) in the green industry sector

 A shift in the economy as a whole towards cleaner indus­tries and

sectors”.

 “…government alone cannot manage and fund a just transition to a

green economy, that the private sector and civil society must play a
fundamental role”.
Source: Department of Environmental Affairs (https:// Corporate Social &
www.environment.gov.za/projectsprogrammes/greeneconomy/about) Environmental
Responsibility Solutions
 Finding 4: Environmental responsibility in small business
Drivers & benefits for uptake of environmental responsibility by small business
Drivers
 The demand from larger business (the
customer) for responsible practices
 Benefits have been reputational, the
small business being considered
favourably by clients due to the
environmentally responsible practices
 Reputational benefits that provide an
advantage over competitors
 Small business owner-managers generally
have strong altruistic feelings towards the
environment and environmental issues
are seen as important
Benefits
 Improved customer relations
 Business growth and diversification
 Improved staff morale and played a
role in attracting prospective
employees
 A safer working environment
 Environmental legal compliance
 Continued environmental
performance improvement
Corporate Social &
Environmental
Responsibility Solutions
 Finding 5: Social responsibility in small business
Small
business
Small Small Small
business business business
Small
Small business
Small Large business
business business Small
business
Small
Small JSE / Large business
business Multinational business
Small
Small
business
business
Large Large
business business Small
Small Small business
business business

B-BBEE B-BBEE
Corporate Social &
Environmental
Responsibility Solutions
Finding 6: Responsiveness of small business

Altruistic feelings towards

Informal management
the environment and
structures
social development issues

Flexible and highly

Innovation
adaptable to change

Corporate Social &

Environmental
Responsibility Solutions
Case studies
Helping small business

Corporate Social &

Environmental
Responsibility Solutions
 Approach: working with small business

Capacity building

Energy

Assess (status quo assessment) H&S GHG’s

Stakeholders Materials
Continuous support and action

Identify risks and opportunities

Emergency Hazardous
response materials

Nuisance Water

(Develop and implement) Action

planand
Reduce Encourage
Mitigate risk Air Waste
control impact innovation
Effluent

Monitor and review

Corporate Social &
Environmental
Responsibility Solutions
 Case study: small packaging business
Capacity building
Assess (status quo assessment)
Continuous support and action
Identify risks and opportunities
(Develop and implement) Action
planand
Reduce Encourage
Mitigate risk
control impact
Monitor and review
Environmental Aspects and Impacts (Risk) Assessment
Results of the assessment are based ISO 14001 guidance for identifying an organisations significant environmental aspects and impacts (specific methodology is described in the associated report)
Environmental Impact
Operational Spatial TOTAL
Input / output Activity Environmental Aspect (under normal operating Severity Probability Legislation
Controls scale score
conditions)
Use of solvents, inks, varnish, 'UV Local air quality, risk of fire,
Release of VOCs, risk of fire 3 1 2 4 4 14
WASH UP", STEREO CLEANER, etc. impact on human health
Storage of petrol, solvents, inks,
Local air quality, risk of fire,
varnish, 'UV WASH UP", STEREO Release of VOCs, risk of fire 2 1 2 4 4 13
impact on human health
Handling, use and CLEANER, solvents, etc.
storage of
hazardous materials Decanting of petrol, solvents, inks, Release of VOCs, risk to human health, Contamination of local water
varnish, 'UV WASH UP", STEREO accidental releases to storm water courses and ground, impact on 5 2 2 4 4 17
CLEANER, etc. for use. drains human health
Decanting and storage of spent inks, Release of VOCs, risk to human health, Contamination of local water
varnish, 'UV WASH UP", STEREO accidental releases to storm water courses and ground, impact on 5 2 2 4 4 17
CLEANER, solvents, etc. for disposal. drains human health
Release of VOCs, risk to human health, Contamination of landfill site
Disposal of liquid hazardous materials
accidental releases to storm water (ground, groundwater and 3 2 3 1 1 10
('UV Wash Up" and STEREO CLEANER)
drains and ground contamination water pollution)
Disposal of Disposal of used rags, PPE and empty Release of VOCs, risk to human health, Contamination of landfill site
hazardous materials containers contaminated with residual accidental releases to storm water (ground, groundwater and 5 2 4 4 5 20
hazardous materials drains and ground contamination water pollution)
Disposal of other hazardous materials
Release of VOCs, risk to human health, Contamination of landfill site
e.g. empty printer cartridges and ink,
accidental releases to storm water (ground, groundwater and 1 2 2 1 1 7
fluorescent light and CFL light bulbs,
drains and ground contamination water pollution)
etc.
Contamination of landfill site
General / domestic type waste from
Disposal of general Large amounts of non-recyclable and (ground, groundwater and
manufacturing, offices, canteen, factory 2 2 3 4 4 15
waste some recyclable waste going to landfill water pollution), depletion of
(packaging and manufacturing waste)
natural resources
 Infrastructure development
 Development of SOPs (aligned to existing ISO 9001
management system)
 Training
 Legally compliant waste contractor
innovation  B-BBEE to resource waste management (+ SETA &
government incentive)
 NCPC to assist with energy efficiency
 Memberships to keep abreast of packaging trends (PCSA)
Corporate Social &
Environmental
Responsibility Solutions
 Case study: small textiles business
High level environmental and social review
There are no fuel handling or storage procedures,
nor training.
The development and documentation of fuel handling and
Fuel There are no spill kits, nor accidental release
storage procedures, continuing staff training and inspections to
management procedures. RED ensure compliance with procedures.

Assess (status quo assessment)

The backup generator is not located on a bunded
area.

The hazardous materials stores are not contained.

Paints are not stored in a designated store.

Hazardous The hazardous materials handling procedures are

Materials limited and there are no storage procedures, nor It is recommended that all hazardous materials are stored,
storage and training. handled and managed accordance with the requirements of
handling Hazardous materials decanted into bottles (where relevant legislation and industry standards and in such a
RED manner as to prevent accidental release into storm water
required in smaller quantities) were not labelled
drains and the receiving environment.
There are no accidental release procedures to
counter the nature and hazards of an accidental
release.

There are no spill kits.

Identify risks and opportunities

Hazardous materials must be must be disposed of in
accordance with the requirements of relevant legislation and
Continuous support and action

There is no system, procedures, nor training for the industry standards:

Waste
correct disposal of rags and PPE contaminated with
management ORANGE  All hazardous waste must be segregated from other
hazardous materials e.g. empty ink cans
waste.
 Hazardous waste consignment notes must be received
for all hazardous waste removed off site.

(Develop and implement) Action  Change H&S to HS&E

planand  Used BEE to fund H&S interns (SETA & government incentive
Reduce Encourage
Mitigate risk  Promoted H&S Manager to Group HSE Manager overseeing
control impact innovation
team of HSE interns

Monitor and review Corporate Social &

Environmental
Responsibility Solutions
 Broad-based Black Economic Empowerment (BEE)
               

   

  25
Ownership (25 points): The percentage share of economic
benefit of black South Africans in the company
Equitable economic

   
     
opportunities

   

Management
Ownership
Control
Management Control (19 points): Representation in board
  19 decision making Executive management, senior, middle and
junior employee base

   
 
 
 
 
   
Procurement (25 points): Procurement from empowering
  25+2 suppliers as a proportion of total procurement relative to
Value chain

Enterprise and B-BBEE level, size and black ownership

Supplier
Preferential
   
  Procurement    
Development    
Enterprise and Supplier Development (15 points): Support
  15+2 to black owned (50%) small and micro suppliers to enable
their development
         
 
 
   
Skills Development (20 points): Practical worked based
Learnerships learning of black people, as a ratio of headcount
  20+5  
 
Talent pipeline

   
   
Certified training of black people measuredCorporate
as a ratio of
Skills Development training spend of headcount
Social &
Environmental
Responsibility Solutions
   
        Adapted from the Transcend Corporate Advisors
 Conclusions
 Small businesses contribution to sustainable development is significant (economic and job creation)

 The negative impact of the small business sector on the environmental is significant (sheer numbers) and
requires definite consideration

 The environmental impact of the supply chain is significant

 Although most companies focus on their own performance - it is important to address the complete
supply chain

 Supply chain pressure for the uptake of CSR means that CSR is likely to become an increasingly important
business issue for many small businesses (small business respond to supply chain pressure )
 This implies significant responsibility on the part of large business

 Supplier questionnaires / auditing is not enough – small business need support in terms of capacity
building and resourcing

 CSR / environmental frameworks need to be adapted / tailored to suit the small business sector

 The ESD element of B-BBEE offers an opportunity for larger businesses to resource environmental
responsibility within their supply chain (supplier development contributions)

 Small business respond positively and quickly when supported with their environmental responsibility
Corporate Social &
 Non-compliances can be rectified easily and at low cost Environmental
Responsibility Solutions
Video clip
Rethinking sustainability in the supply chain
Discussion

 Discuss your

supplier
environmental
auditing
programme.

 Is collaboration a

realistic goal?

Corporate Social &

Environmental
Responsibility Solutions
 Inspire CSR
Creating
environmental and
social value in the
supply chain

Carla Higgs
MSc (Environmental Science)
Cell: 083 3950080
Corporate Social &
Environmental Email: carla@inspirecsr.co.za
Responsibility
Website: www.inspirecsr.co.za