SMEs around the world are geared to sustainable development

• Securing good working conditions is their main focus
• German SMEs are particularly active in climate and environmental protection

Social responsibility and sustainable development are major concerns for many small and medium-sized companies. In the past two years, nine in ten small and medium-sized enterprises in industrialised and emerging economies have worked to achieve social and ecological goals. This included campaigning for good working conditions in their own companies, demanding compliance with minimum social standards from their suppliers, and involvement in climate action and environmental protection. These were the findings of a special survey of the KfW Competitiveness Indicator 2016 which interviewed more than 3,100 small and medium-sized enterprises in ten important economies across Europe and the world on the issue of corporate social responsibility (CSR).

Securing good working conditions in their own companies is the CSR activity which SMEs in all countries regard as most important. Half the surveyed businesses are involved in this area. German SMEs are slightly below the average, at around 41%. In international comparison, Germany’s standards are already on a very high level and working conditions are significantly better than in many other regions. “Good working conditions are an important prerequisite for small and medium-sized enterprises to be able to successfully compete for skilled workers”, commented Dr Jörg Zeuner, Chief Economist of KfW Group. “SMEs benefit from activities that benefit their workers.” That is why one in five SMEs also demand compliance with minimum social standards from their suppliers.

Conserving resources is also relatively high on SMEs’ CSR agenda. In the past two years, more than three in ten enterprises have taken measures to improve their material efficiency, and nearly as many have worked to improve their energy efficiency. In Germany, improving material efficiency was a goal for 28% and improving energy efficiency for 37% of the surveyed companies.

Improving energy efficiency is also the CSR topic which SMEs around the world believe will gain the most importance. More than half the surveyed enterprises expect the topic to become more important for them in the years ahead. “With the implementation of the international climate agreement, which will be a subject of the Bonn Climate Change Conference in 2017, the pressure for more energy efficiency will likely increase further in the SME sector as well”, said KfW Chief Economist Zeuner. “German enterprises have already made some progress in this area. But they will have to make further efforts in the future because energy efficiency will increasingly become a competitive advantage.”

In addition to energy efficiency, German SMEs are also more committed to climate action and environmental protection than the average. A good one in three small and medium-sized enterprises reported having been active in this area in the past two years. At international level, only one in four enterprises are involved in climate action and environmental protection.

Social projects and humanitarian causes, on the other hand, receive less attention. This is particularly true of enterprises in Europe, where social responsibility traditionally is more strongly attributed to the state than in the USA, for example. In the past two years, just under 17% of German SMEs have supported social projects or humanitarian causes. Their involvement with science, culture, the arts and sports is also relatively limited.

Note:

The KfW Competitiveness Indicator 2016 surveyed more than 3,100 enterprises with 50 to 500 employees in Germany, France, the UK, Spain, Italy, Russia, China, Brazil, Japan and the USA on their CSR activities. The special survey is available at www.kfw.de/fokus.