In an increasingly more volatile environmental and political climate, Sébastien Pellion, Global Head of Impact & Sustainability at Glovo, explains how SMEs can protect themselves and safeguard economic growth through crisis relief support and robust disaster planning.
Last year, COP27 made a breakthrough in the recognition of the impact of climate change on vulnerable countries, with a “loss and damage” funding agreement1. Such initiatives are an unfortunate reality of a world undergoing a growing climate crisis. In fact, globally, we have seen a tenfold increase2 in the number of natural disasters since the 1960s.
When considering the impact these events have on the livelihoods of individuals and communities, we must not ignore how small to medium enterprises (SMEs) are affected. Especially when the Federal Emergency Management Agency (FEMA) reports that nearly 40% of small businesses3 are unable to reopen their doors following a disaster.
Equally concerning for SMEs is a challenging and turbulent political climate that sees a rise in political activism, not to mention conflict, affect the ability for many businesses to stay open and protect their staff. Take for instance, the war in Ukraine. While it has most impacted those business owners living in the country4, it has also ushered in a variety of challenges globally – from rising energy prices to inflation to changes in customer behaviour, and more.
Yet despite the enormity of these threats, many SMEs remain unprepared for the impact these crises and more can have. To change that, below I explore what business leaders can do to protect themselves and safeguard economic growth in the face of a growing climate crisis.
Being proactive in preparations
For many businesses, unless they operate in a region particularly affected by climate change, the likelihood is that crisis or disaster relief might not have crossed their minds without it first crossing their own threshold.
Take Covid as an example – before March 2020, very few business owners would have had a pandemic-relief plan in place. Yet one silver lining of the pandemic is that, via first-hand experience with lockdowns, testing kits and self-isolation, it has ushered in a new era of awareness and preparation for businesses going forwards. The same could be said for those businesses who have experienced the most severe effects of climate change, or suffered the fallout from political conflict.
Yet businesses should not wait until a disaster hits to develop this resilience – bearing in mind the 40% figure above, they mightn’t have the opportunity to reopen. They should therefore be proactive in their preparations, and garner the experiences of those with first-hand experience, to develop their own resilience. Whether those other SMEs who have been in these unfortunate circumstances, or those larger industry players with more robust and practical plans in place.
Stay connected to the community
The lifeblood of SMEs is connecting with other local business owners, the local economy and of course, its people. But the importance of this is even greater when it comes to crisis relief.
One of the significant implications of disasters on every scale is that they’re unlikely to have impacted just one business and left others untouched. One benefit to a high level of preparedness is that it can also help others. There might be those less-prepared who can benefit from stockpiled essentials or communication guidelines and templates on how to update customers. Crises don’t make a forum for competition, and the sooner all companies get back on their feet – the better it will be for the economy as a whole.
Another collaborative effort that feeds into this is the partnership between bigger industry players and those SMEs in need of preemptive, or reactive, crisis support. For bigger businesses, they are in a far better position to provide financial assistance. The motivation for them comes from the fact that they’ll benefit from SMEs being better supported – through smaller businesses’ continued contribution to the industry in the shape of jobs and profit.
An example of this type of partnership is where bigger industry players can help ensure that, in the event of smaller businesses being impacted by a crisis (such as those affected by the recent flooding in the Emilia-Romagna region of Italy), their economic growth is not brought to a halt and they have a helping hand accelerating financial recovery. This can take on the form of everything from donations to quickly get a business back on its feet; heavily-discounted commission; and financing of promotions. At Glovo, we started Crisis Relief Support to help our partners rebuild after natural disasters or political conflicts and enables partners to have access to financial packages to aid them in the All of which help businesses take those crucial steps on the road to long-term recovery.
Taking climate action to avoid climate crisis
Businesses shouldn’t just prepare for climate disasters, but ensure they are doing everything they can to prevent them in the first place. This means developing a sustainable business model that proactively fights climate change.
As much as SMEs today should have a robust disaster plan, they should also have a sustainable business plan. This means looking at ways to cut emissions and waste, and incorporating what sustainable alternatives they can into their operations, like using renewable sources of energy and cutting single-use plastics. Our own research told us that 42% of UK SMEs5 believe that sustainability is their greatest business opportunity. This isn’t just down to the good it does the planet, but the consumer too – with the climate more of a priority6 for Gen Z than gender equality and economic opportunities.
For businesses, investing their time and efforts into crisis relief is a must, and like any number of other challenges they face – the sooner they prepare, the better. For many owners, their business will represent a labour of love – years of investment both financial and emotional. It is therefore even more important that they not leave anything to chance when it comes to external factors that can impact them, and that they take time to prepare for the worst while hoping for the best.
About the Author
Sébastien Pellion is the Head of Social Impact & Sustainability of the Barcelona-based delivery start-up Glovo. Glovo is a multi-category app present in 25 countries, connecting consumers with stores and independent couriers, offering on-demand services from local restaurants and stores in the cities where it operates.
- COP27 Reaches Breakthrough Agreement on New “Loss and Damage” Fund for Vulnerable Countries | United Nations Climate Change
- Are Natural Disasters Increasing? | Unlimited Restoration Inc.
- Study: 40% of businesses fail to reopen after a disaster | Access Corp
- “What we are capable of” – stories from Ukraine | Glovo
- The Glovo SME Survey | Glovo
- The World is Changing. How Will We Help? | Team Lewis Foundation