2 Experiences and challenges when engaging with SMEs

This video features a number of low carbon advisors speaking about the challenges they face when trying to engage with business owners and managers on energy and environmental issues.

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Engaging with SMEs – business advisors’ perspectives

[MUSIC PLAYING]

[What are the key challenges when you engage with SMEs?]

SUBJECT 1

I think the challenge I face with engaging SMEs about the environment is often that the businesses I'm working with will want to see a clear business case. They'll want to see that the numbers stack up. And that the time that they have is worth expending.

I think often a challenge you have is that businesses are focused on the short term. And sometimes they can see the longer-term benefit, but it's whether they can spare the time to look at the more strategic issues.

SUBJECT 2

There are many challenges involved in doing the work that I do. It could be involved in actually engaging with the businesses in the first place and convincing them that, a, there's a need for our support and that we can help them. Or b, it could be around whether or not they feel that they'd be able to make any changes in their business anyway. So there's a number of different challenges.

SUBJECT 3

The challenge, essentially, that I'm finding with engaging with SMEs is speaking the business language. My background – I'm rapidly learning – but my background is not directly with businesses. But I am from the sustainability field. So it's getting the right hook that speaks to the business. And then they say, OK, right, OK, we found some common ground here.

SUBJECT 4

I think often businesses do come from a different background to low carbon advisors. I would say using the term businesses it's quite a heterogeneous group. I wouldn't want to ascribe a single tag onto that. But perhaps working as a low carbon advisor, for instance, your motivation isn't necessarily to do with money, to have power. It's more to do with wanting to make a positive difference in society. But doesn't preclude businesses from having the same set of values. But it does mean that perhaps there's a bit of differentiation there.

SUBJECT 5

The challenge we have in getting SMEs engaged is that they don't see energy as part of their core business. And that they are too busy trying to improve their bottom line and talk to customers. And so quite often they're time poor. For example, we might have either a social enterprise or a small or medium-sized business coming to us because they know their energy bills are quite high, but they don't actually know how to reduce them, or how to prioritise measures that might help them reduce their energy bills.

SUBJECT 6

There are many challenges an organisation might face, but one in particular that we're working with is a school. And something difficult about that is that the head is very much engaged in environmental work and is really pushing to develop a One Planet action plan with us. But he doesn't have the necessary buy-in from the rest of the staff.

And so having that sort of instituted and filtered down is quite difficult. We do have several things and strategies that we're working on. But it's about trying to get those networks as well. And he's trying to encourage other primary schools to buy-in as well so that they can be stronger together and sort of knowledge share and what have you.

But I think just for a lot people it's time. We're really time scarce as a society, but especially in schools. You know, maybe environmental matters are not their first priority.

And so trying to get staff after a really busy day of working with children to then think, you know, have another meeting and say, OK, how can we change the school for environmental purposes and not purely educational ones? That's quite difficult. And that's something that we're trying to figure out at the moment.

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Watch the video (around 4 minutes) and make your own notes on the following points:

1. What are the main kinds of challenges mentioned in the interviews? You may find it helpful to group them into categories.
2. How do they compare to the challenges that you have experienced in your own work?
3. Select three of the challenges mentioned by the practitioners and indicate how you would seek to overcome them.

Take a look at this short reading and make your own notes on the questions that follow. Save your notes so that you can refer back to them at the end of the course.

So far, you have heard from a few low carbon advisors that in order to initiate discussions with SMEs about energy efficiency or environmental impact, the best way is to promote support services using financial messages. The majority of environmental programmes aimed at SMEs adopt a variant of the phrase ‘save money – save the planet’, sometimes described as ‘win–win’. The promotional poster below is from a fictional low carbon SME support organisation, but uses typical imagery and messaging.

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Promotional poster from a fictional low carbon SME support organisation. The image shows a hand holding a pile of coins from which a small branch with green leaves is growing. The main caption is ‘SAVE MONEY, SAVE THE PLANET’. The poster also says, ‘Free energy advice from our experts’ and ‘Grants available for energy efficiency measures’.

The benefit of this kind of marketing message is that it is a clear and simple message that appeals to what many businesses consider their top priority. However,this message has several limitations:

1. It sends mixed messages in terms of values. By promising financial savings, it appeals to a business-owner’s ‘self-enhancing’ values; whereas ‘saving the planet’ appeals to ‘self-transcending’ values, of taking action for the greater good. Many psychologists argue that this kind of mixed messaging won’t lead to a permanent change in attitude towards the environment: those individuals who do take action are unlikely to be equally motivated by each of these principles.
2. It dilutes the importance of taking pro-environmental action for its own sake. If advisors feel the need to justify action to business owners on financial grounds, they are making an implicit assumption about the business owner’s principal motivations, which may not be accurate.
3. The ‘energy efficiency paradox’ describes the observation that SMEs do not take up opportunities for energy savings, even when they involve little or no investment. From this we can conclude that financial arguments are not sufficient to motivate SMEs to take action, and that other barriers must be overcome. When publicly subsidised programmes offer free advice and grants, they are simply aiming to improve the persuasiveness of financial arguments for taking action. More needs to be done to appreciate and address the variety of other factors besides financial cost–benefit that contribute to SMEs decision-making processes.
4. It cannot address the large number of necessary actions and will not lead to financial savings in the short term. Tackling climate change is an enormous, system-wide task that will take decades, and although research has argued that the economic costs of inaction far outweigh the costs of mitigation in the long term, there may not be an immediate return for the organisations concerned. It can set particular kinds of expectations for the advisor prior to a face-to-face visit. For example, if a business owner has welcomed an energy advisor primarily on the basis that they may save them money, they are likely to be disappointed if no significant savings can be identified without additional investment or the trickier topic of staff behaviour change. Although advisors are often able to identify opportunities for efficiency, the framing and expectations of this meeting may make it difficult for them to steer the conversation on to the ‘softer stuff’, or to other (non-financial) benefits.

Now make your own notes on the following questions:

1. Do you agree with the arguments presented in the reading?
2. Besides making financial savings, what other messages might encourage businesses to consider their environmental impact?