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ABSTRACT
Small-to-Medium Enterprises (SMEs) increasingly are expected to develop strategies to accommodate accelerating global sustainability reporting requirements and proactively address sustainability considerations. Many lack a structured approach to facilitate getting started with strategy formulation in response to this significant change in their external environment. This paper presents a readily applicable and practical method SMEs can apply to integrate sustainability considerations as a beginning toward developing a sustainability strategy. Current sustainability issues are identified and discussed with respect to determining company capabilities and assessing the external business environment. This classification of critical sustainability issues offers a flexible planning innovation well-suited to smaller enterprises seeking to begin developing a sustainability strategy.
Keywords: SMEs, sustainability, sustainability strategy, strategy formulation
INTRODUCTION
Sustainable business practices have been steadily on the rise. Many companies now embrace sustainability. Approaching half (43%) of those surveyed by McKinsey & Company report seeking to rectify sustainability with company values, mission, or goals. This focus on strategy is now the top corporate reason for addressing sustainability, just ahead of reputation effects and cost efficiencies (Bonini & Bove, 2014). Alongside large corporations, SMEs are aware of the insurgent sustainability tide and many have begun to incorporate sustainability strategy into their operations for many of the same reasons as large corporations (Brammer, Hoejmosr, & Marchant, 2012; Heras & Arana, 2010).
A clear trend in sustainable business practice is the reporting of company performance with respect to the "triple bottom line". The triple bottom line encompasses the economic, environmental, and social performance of an organization and this constitutes its current performance with respect to sustainability. This trend has been growing for several decades and now many large companies also require other enterprises in their supply chain, some of which may be SMEs, to report information on sustainability performance. Along with other aspects of the sustainability movement such as public opinion supporting its value, this requirement represents a potentially major change in SMEs' business environment with consequences that can have substantial impacts on their business.
SMEs should assess, monitor, and potentially develop strategies to accommodate widespread sustainability reporting and to proactively adapt to overall sustainability demands (Parhankangas, McWilliams, & Shrader 2014; Nadim & Lussier, 2010; Avram & Kuhne, 2008). However, a key challenge faced by many companies, both...