#SustainabilityToday: Small business, big impact: MSMEs and environmental management   

Large corporations have received a lot of attention in recent times regarding environmental responsibility. Environmental management has now become a board room issue in most large organizations as erring has become detrimental to their reputation with a high risk of environmental liabilities. In contrast, micro, small and medium enterprises have received little or no attention regarding considering the impacts of their operations on the environment. This group of stakeholders are key players in the progress of large organizations as they are the main contractors and vendors in their supply chains.

MSMEs contribute immensely to economic growth, development and job creation as much as they also have significant social and environmental impacts. It is important to note that MSMEs are not restricted to structured enterprises with 10-50 staff members, they include street vendors, food sellers, businesses run from home, petrol stations and several service providers – car wash, salons etc. A report by the Vanguard newspaper in 2015 has it that MSMEs in Nigeria employed 60million people, contributing to 48% of the nation’s GDP.

The economic and social contributions of MSMEs have been well quantified and understood as opposed their environmental impact, which has received little attention. Smaller businesses, in the true of things have lesser environmental footprints when compared to larger businesses. However, their impact becomes very significant when considered collectively. This is very evident in developing countries like Nigeria where old and crude methods are still widely used in providing various services. Charcoal and firewood is still used by a lot of food vendors, the use of the filament bulb that consumes so much energy is still very common due to its cheaper price. Some studies have indicated that the contribution of MSMEs to local pollution levels can be as much as 70% and generating as much as 60% of commercial waste.

Some of the reasons why MSMEs are not on environmental responsibility is because in most cases, especially in Nigeria, they can pay their ways through just to get the paper work done for regulatory purposes. A lot of them do not even know and have failed to realise the detrimental effects of their poor environmental management. Unlike the bigger counterparts, MSMEs are less susceptible to reputational risk. Also a lot of them are more interested in short term gains regardless of the effects of their activities while pursuing that.

The introduction of the Nigerian Sustainable Banking Principles has been a breath of fresh air as some banks are beginning to add environmental/sustainability management structures as a requirement for vendor registration. It is hoped that microfinance houses that cater to these micro ventures adopt the NSBP and with one step at a time, businesses would better understand the importance of environmental management. Another good thing is that a lot of these micro businesses now have trade unions that would be very instrumental to conveying the importance of their activities in achieving sustainable environmental management.

Rukayat Alli-Oluwafuyi




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