In an era of heightened consumer awareness, a wave of entrepreneurs is entering the market, often unaware of the potential pitfalls that could jeopardize their ventures. A key strategy for safeguarding the future of a small business is embracing sustainability.
In a one-on-one interview with Securities and Exchange Commission (SEC) Commissioner Rogelio Quevedo, he explained that businesses typically face a time limit on their ability to maintain momentum with consumers.
“The first two years are critical for businesses, especially in the restaurant sector. You need to recover your capital within the first six months to survive,” he told Manila Bulletin.
“You know the consumer’s taste– it always changes, they get tired… But when [your business] surpasses the two years, your enterprise can be sustainable,” Quevedo added.
Business owners must focus on the three key pillars of sustainability. Andrew Beattie of Investopedia describes these pillars as environmental, social, and economic strategies. Successful entrepreneurship requires stability in all three areas.
Unveiling sustainable practices
One specific example is implementing energy-efficient measures. This includes reducing energy consumption through LED lighting, energy-efficient appliances, and improved insulation.
Another important practice is waste reduction and recycling. Businesses can minimize waste by implementing recycling programs, using recycled materials in their products and packaging, and encouraging customers to return packaging for reuse.
Supporting local communities is equally crucial. Small businesses can contribute to the social aspect of sustainability by supporting local charities, sourcing products from local suppliers, and participating in community events.
Additionally, offering telecommuting options for employees promotes environmental sustainability. By allowing employees to work from home, businesses can reduce the need for commuting, thereby lowering carbon emissions and contributing to a healthier environment.
Ethical sourcing is another essential practice; small businesses should prioritize sourcing products and materials from suppliers that adhere to ethical labor practices and environmental standards.
“SEC looks at this on a national scale. We must ensure that a segment of our population believes in our advocacy. It’s not just lip service; we want to ensure that future generations can enjoy the same resources and profits we have today,” Quevedo explained.
SEC sustainability reporting
The SEC has mandated businesses to report on their sustainability activities, including financial disclosures.
Quevedo shared that the SEC has partnered with tech company Komunidad, which focuses on ethical and digital solutions. This collaboration aims to simplify reporting processes through digitization, standardization, easier data access, and increased transparency.
“Hopefully, they [Komunidad] tie-up with the Department of Interior and Local Government because the local government units are the ones on the ground. It’s the barangay who will know what sustainability damages are being done by the local businesses,” he emphasized.
According to the SEC, there are currently 283 listed companies, with only 10 classified as small or medium enterprises (SMEs) as of last year. He noted that approximately 273 businesses are publicly reporting their sustainable practices.
Quevedo acknowledged that time, capital, and manpower can hinder small businesses from adopting ethical practices.
He, however, expressed hope that entrepreneurs would move away from the perception that sustainable activities are merely cost-intensive.
“You have to assure the reliability of supply that will only be true if you’re knowledgable of the sustainability requirements,” he added.