SMS for decision making of SMEs

Abstract

To pursue the high environmental performance, economic and social effectiveness of the companies, including small and medium enterprises (SMEs), is the key goal of the sustainable development concept. Sustainable development is based on preventive management principles, and their application in SMEs has become an important issue for enhancing competitiveness. Unfortunately, most of the sustainable development-related research is focused on large companies rather than SMEs, especially in the industrial sector. The importance of SMEs often remains unnoticed. Besides, SMEs themselves often have inadequate knowledge about their environmental and social impacts and management, and apply voluntary preventive measures less frequently than large companies. To make sustainable decisions and to improve the environmental performance, economic and social effectiveness of SMEs, an integrated sustainable management system (SMS) based on financial analysis is necessary, oriented to strategic sustainability goals, not requiring significant financial and human resources. Integration of sustainability management accounting and composite sustainable development index methodologies forms the basis of SMS for SMEs decision making. SMS was applied in three pilot SMEs (small-scale wood parquet, medium-scale wood pallets, medium-scale beverage producing companies). In this article, an extensive analysis of a small-scale wood parquet manufacturing company’s case is presented. The application of SMS enabled to identify key sustainability problems and to find solutions to improve the companies’ sustainability performance. SMS application resulted in reduced input materials consumption and the reduction of sustainability costs.