A research report on developing an initial best practice framework for managing environmental sustainability change in Australian small and medium size enterprises (SMEs)

A research report on developing an initial best practice framework for managing environmental sustainability change in Australian small and medium size enterprises (SMEs)

Professional accountants are an integral part of business management, and they are increasingly being called upon to take a more active role in ensuring that SMEs are sustainable. This study will assist accountants in this challenge.

The main objectives of this study were to examine: firstly, how the management of practices and capabilities of environmental sustainability are developed, maintained and managed in SME ‘environmental sustainability leaders’, with the view to develop a conceptual framework for environmental sustainability (ES) change management in Australian SMEs. These ‘star’ SMEs or ‘sustainability leaders’ have distinguished themselves as recognised leaders in implementing environmental sustainability initiatives. Secondly this study examined what learning in particular is involved in developing environmental change practices and capabilities; thirdly, how this learning might be fostered by other leaders and professional accountants in SMEs.

Semi-structured interviews have been conducted with CEOs/MDs and other management staff involved in the management of sustainability in twelve Queensland SME sustainability leaders. By conducting a content analysis, emerging codes, themes and comparative development of key logics were analysed in order to develop an initial conceptual best practice framework which can be used for driving ES initiatives in SMEs.

In relation to the first research objective, four stages of managing environmental sustainability (ES) change have been distinguished in this report including: the design for ES; internalising ES in the culture of the organisation; implementation; and becoming a leader in ES. Several components associated with each of these stages have been identified in the course of this research. The design stage comprises four main activities, including setting the foundations of success, developing the business case for ES; establishing a strategic orientation to environmental sustainability; and utilising strategic change capabilities.

The internalisation stage comprises two components: utilising strategic change capabilities and developing an ES Culture through creating conditions that motivate desired ES behaviour.
The implementation stage consists of three main components: the implementation of ES change initiatives; the identification of barriers and overcoming these barriers; and integrating external support for ES initiatives.
The main focus of the final stage is on becoming a leader in ES. Two main components are associated with this stage, including: the achievement of economic, social (human resource and community) and environmental sustainability outcomes; and becoming known as a renowned ES leader. The activities associated with the various components are discussed in detail in this report, culminating in a best practice framework for managing environmental sustainability titled: the ‘Leaders in Managing Environmental Sustainability’ framework.
SME environmental sustainability leaders offered the following advice to SMEs and accountants in SMEs: understand your business and be clear about why you are doing it; be strategic about it and build it in your business model; take manageable steps; make it about the triple bottom line—people, profitability and the environment; find a way to work ‘on’ your business; engage a sustainability leader; make it simple, start small and do it; target the big areas first and work your way down; engage people and make them part of the change; make ES part of the culture and belief system of the organisation; start with process improvement and understand the processes; focus and do it well; pursue support from government agencies; learn from your mistakes and from others; find relevant information; participate in ecoBiz initiatives; and continue and revisit environmental sustainability progress ever so often.

Since the framework in our study has been developed as a situational analysis of existing SME environmental sustainability leaders, accountants could benefit from drawing on the experiences and successes of these firms in further achieving the goals of developing mechanisms to access and engage with senior executives; and developing a ‘borderless mind’ through ‘thinking out of the box’. The results and associated best practice framework in this report has the potential to assist accountants with implementing innovative approaches to managing environmental sustainability. This report supports the notion that ‘sustainability is the future’ and provides accountants with useful guidelines in fulfilling the critical role of managing environmental assets.

This project was conducted with the support of a Small Business Grant from CPA Australia.