SMMEs and the green economy: Muddy waters and murky future

Abstract

The challenge of sustainability has been a long-standing debate within society in general and the business community in particular. Gar rett Hardin in his seminal article ‘The Tragedy of the Commons’ eloquently highlighted the ten sion that exists between self-maximisation and profit growth and its commensurate impact on society – in particular the environment (Har din, 2009). He structured his argument around the typical English ‘commonage’1, arguing that as each individual in a community attempted to maximize his/her profit through additional livestock, this placed an increased burden on common land. It also prompted others to add to their herd, under the belief that the addition of a few animals makes little or no difference to the overall wellbeing of the commonage. Har din’s thesis was that, taken collectively, the sum of each person’s additional livestock places the commonly-held asset into environmental jeop ardy. Each individual seeks to maximize his/her own profit and assumes that the other will care for the common land. Despite the 50 years since Hardin’s article, he could have been writing about the world today. Sustainability is now sharply in focus for busi ness, government and the international de velopment community. While pressure to ad dress sustainable development continues to be placed on multi-national corporations (MNC), this burden is now shared with small medium and micro enterprises (SMME2 ), which are seen as essential social and economic contributors to local, regional and national economies. The concept of ‘sustainable entrepreneurship’ has emerged (Choi & Gray, 2008) as a multidimen sional construct to explain the efforts of SMMEs to address environmental challenges, econom ic development and social inclusion. Impetus for increasing the instance of sustainable and inclusive development has been provided by OECD countries (OECD, 2016) which, in 2015, adopted the United Nation’s Sustainable Devel opment Goals (SDG). Pathways to these goals include new investment models in the form of blended finance, social impact investing, and responsible business conduct. It is this final pathway that is the key focus of this report. SMMEs are an essential driver of economic growth, especially in emerging economies, con tributing up to 45% of total employment and 33% of gross domestic product. The contribu tions are significantly higher when informal SMMEs are included. The World Bank predicts that’s in the next 15 years, 600 million jobs will need to be created, the majority of these in Asia and Sub-Saharan Africa, where four out of every five jobs created, is by a small medium enterprise. This report explores responsible and sustain able practices among SMME manufacturing businesses in South Africa’s Gauteng Province. In addition, this report seeks to illustrate the entrepreneur’s understanding of, and engage ment with, sustainable manufacturing practic es that could be seen as valuable inputs into addressing the SDGs.