• small workforces that do not have capacity to implement sustainability strategies
• lack of awareness of the resources, programs, networks and other support available
• limited access to government grants and investment opportunities.
WHAT ARE THE OPPORTUNITIES FOR SMES? Businesses that begin the sustainability journey early will be the first to reap the benefits that this transition presents. Nurturing SMEs through this transition can build a local cohort of competitive suppliers that generate additional economic benefit to the region.
Current high energy costs, equipment electrification grants and falling costs of renewables have made it an ideal time to transition. SMEs that develop and implement a sustainability action plan are identifying efficiencies in their operation and introducing strategies that harness those efficiencies to save costs. Taking a‘ hierarchy of initiatives’ approach, SMEs can reduce energy and waste costs by initially looking at‘ avoidance’ and‘ conservation’ strategies that are low or no-cost approaches. Funding programs such as the Australian Government’ s Energy Efficiency Grant and Queensland Government’ s Manufacturing Energy Efficiency Grant have been targeted to reduce industry emissions. This allows SMEs to affordably purchase operating equipment that is more energy efficient and can run off on-site renewables.
Governments are aiming to reach sustainability targets that their supply chain must help support. Procurement policies are increasingly including stronger language that indicates emissions and waste reduction is becoming a priority. In some instances, mandatory sustainability weighting is being included. An example of this is in the Queensland Government’ s 2032 Procurement Strategy. The Strategy highlights that suppliers must take sustainability action in their business to supply to the 2032 Olympic Games, with more detail on 2032 procurement to be announced this year. At the same time, the Queensland Procurement Strategy 2023 states that at least 30 per cent of procurement dollars are to be spent with SMEs. The opportunity is ripe for the taking for SMEs that can demonstrate their sustainability policies and actions.
And it is not just governments on this path. This year, federal regulation was introduced requiring Australia’ s largest businesses to publicly disclose a sustainability report( ASIC 2024). This includes revealing their supply chain emissions. Now open to public scrutiny, these organisations will place downward pressure on their supply chain to reduce supply chain emissions. This could result in suppliers losing work due to inaction, but it also means that suppliers driving sustainability in their businesses will provide more goods and services to these supply chains.
Current high energy costs, equipment electrification grants and falling costs of renewables has made now a better time than ever for SMEs to begin the transition.
Also, consumers are more conscious of how and where they spend their money. The Voice of the Consumer Survey( PwC 2024) highlighted that, despite cost-ofliving pressures, consumers were inclined to pay on average 9.7 per cent more for sustainable products. Of the more than 20,000 survey participants recorded from across the world, 85 per cent are experiencing first-hand disruptions from climate change in daily life. This has led to higher priority for sustainable consumption from the research group. These survey results are an indication of the opportunities available to SMEs that implement sustainability into their business offering.
HOW LOCAL GOVERNMENT CAN SUPPORT SMEs SMEs face challenges and opportunities in their sustainability journey and local government is dealing with the same green transition, which is why they are demanding that supply chains support their net-zero goals. Councils can use spend to influence business behaviours to help achieve sustainability outcomes but need to bring SMEs on the journey. So how can local government help SMEs overcome the challenges and leverage the opportunities?
Three key pillars could be used as a framework for councils to support SMEs in the green economy transition: 1. Communication 2. Education 3. Industry partnerships.
COMMUNICATION Information is constantly released by regulators and government detailing new policies, regulations, funding and programs that may impact SMEs. Staying updated and acting on relevant information can help SMEs leverage opportunities or avoid potential impacts. But for SMEs that are limited in resources and knowledge, how do they stay current, decipher what’ s relevant or understand the implications?
Local government can provide clarity and guidance by feeding businesses relevant information through diverse communication channels. Identifying what information is relevant to SMEs and communicating those updates in simple terms will make council a recognised source of information on the topic. Creating this central source can ensure that SMEs do not miss an update that may concern their business.
Recently, Sunshine Coast Council published an article on its local business support website that contextualised the new sustainability reporting requirements for SMEs. The article provided insight into how the new regulation can impact their business or present an opportunity. This website is a recognised information source for local SMEs. The article was also included in the fortnightly business e-newsletter and posted on council social media channels. This example highlights council’ s role in identifying and clearly communicating important regulatory information to SMEs. Council also relied on the region ' s extensive network of Chambers of Commerce and Industry Groups to share the information further via their networks, essentially amplifying the messages ten- fold.
EDUCATION As previously mentioned, SMEs have limited resources to gather, interpret and implement information. Particularly when it comes to sustainability, the idea of the journey can be overwhelming to the point of inaction.
Local government has a role to play in providing businesses with structured education through practical programs that cater to SME capacity. By creating
ECONOMIC DEVELOPMENT JOURNAL VOL 18 NO 2 2025 21