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Most SMEs would cut ties with firms that break ‘green’ promises

A national survey has revealed that half of UK SMEs are concerned about the sustainability credentials of their suppliers, and most would consider dropping those that fail to meet green pledges.

In a survey of 500 SME owners about their plans and aspirations, Mercedes-Benz Vans found that more than three quarters said they had made sustainability a top goal for 2022.

This view was particularly strong among female business leaders and those aged 25-34, with over 80 per cent agreeing with the statement in both cases.

Expectations of exacting sustainability standards among partners and colleagues is also growing. More than 60 per cent of those surveyed said they would consider ceasing work with a partner or supplier business if they did not uphold their environmental principles, while 15 per cent said their customers had already started to question their sustainability credentials.

Retail supply chain

The growing willingness to drop underperforming suppliers is also evident in new research published by Barclays, focusing on the retail sector.

In a survey of more than 300 UK retailers, one in five said they had cancelled contracts in 2021 with suppliers who fell foul of ethical and sustainable standards, worth a combined £7.1 billion. The most common reasons for cancelling contracts were use of unsustainable materials (39 per cent), unfair working hours (37 per cent) and lack or membership to a trade body that monitors ethical and sustainable standards (32 per cent).

‘Marked acceleration’ towards sustainable procurement

Karen Johnson, head of retail and wholesale at Barclays Corporate Banking, said: “We are seeing a marked acceleration and shift among retailers towards prioritising sustainable and ethical standards in every part of their business operations. That is now starting to take its toll on retail suppliers with billions of pounds worth of contracts being cancelled every year.

"It’s being driven by increasing consumer demand and will rise even further as Gen Z enter the workplace and begin to earn their own money. Retailers must continue to monitor and improve their ethical and sustainability standards if they are to appeal strongly to younger demographics.”


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