CBS project highlights SME pollution: “We know nowhere near enough”

While large companies often come under fire for greenhouse gas emissions and resource consumption, an important group often stays under the radar: small and medium-sized enterprises (SMEs).

We know very little about why there are differences in the environmental impact of SMEs, and this is a major problem

- Kasper Flyger Regenburg, postdoc, CBS

A new research project, ‘Corporate Waste Governance’ seeks to change this. The project has received funding of DKK 3.2 million from the Independent Research Fund Denmark, and one of the researchers involved is CBS postdoc Kasper Flyger Regenburg. He has previously studied how waste management affects corporate loan conditions. His research showed that companies with better waste management tend to secure lower interest rates on bank loans.

“We know very little about why there are differences in the environmental impact of SMEs, and this is a major problem. Reports indicate that between 37% and 70% of corporate pollution comes from SMEs, with waste playing a significant role due to the need for new material production. So, gaining a deeper understanding of the environmental impact of SMEs is essential,” says Kasper Flyger Regenburg.

The research is based on a unique dataset on corporate waste management in Denmark, collected from waste companies that are required to register waste to the Danish Environmental Protection Agency. This dataset provides detailed insight into which actors have the greatest influence on waste management and what factors can motivate companies to take greater responsibility for their waste and environmental impact.

Great variation among SMEs

One key challenge the researchers aim to address is why SMEs differ so much in their waste and recycling practices despite having access to the same technologies and waste management systems.

To understand these differences, the researchers will investigate the factors that affect SME waste management. A central focus of the project is to map out how various actors in the SME ecosystem – such as owners, leaders, employees and lenders – influence waste management.

“Access to technological solutions alone does not determine how waste is handled in small companies. The people working there play a major role. That is why we will examine how the environmental behaviour of employees and managers affects waste management within the company,” explains Kasper Regenburg. He elaborates:

“When managers and employees lack the right knowledge about reducing waste, it becomes difficult to make the necessary decisions and implement technologies that could drive sustainable change.”

Lack of green knowledge can have a significant impact on waste management

According to Kasper Flyger Regenburg, technological knowledge in the green transition can help companies improve their waste management.

With this research project we hope that small and medium-sized enterprises will receive the attention and support they need to contribute to the green transition and reduce their environmental impact

- Kasper Flyger Regenburg, postdoc, CBS

For instance, companies that invest in training employees in environmentally friendly practices are more successful in implementing effective waste management systems.

“When employees gain knowledge about sustainability and waste reduction, we expect them to be better at identifying opportunities to minimise waste in their daily routines. For instance, small companies working with packaging could train their employees to choose more sustainable materials or optimise production processes to reduce waste.”

Better access to ‘green knowledge’ can also help shape corporate culture. If employees are engaged and informed about sustainability, it can create a positive cycle where green initiatives become an integral part of the company.

“With this research project we hope that small and medium-sized enterprises will receive the attention and support they need to contribute to the green transition and reduce their environmental impact. This is a crucial task if we are to meet climate targets and ensure a more sustainable future,” Kasper Flyger Regenburg concludes.