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Supply chain sustainability management and reporting in small and medium enterprises (SMEs) in Bangladesh should be popularised to properly achieve Sustainable Development Goals (SDGs), experts said at a programme on Tuesday.
In this regard, proper definition of SMEs, policy development, good governance and capacity building of accounting professionals, regulators and SME entrepreneurs is required for SME sustainability reporting, they pointed out.
The observations came at a policy dialogue on 'Increasing Competitive Edge through Supply Chain Sustainability Management and Reporting' arranged at the city's Sonargaon Hotel.
The event was jointly organised by the Institute of Cost and Management Accountants of Bangladesh (ICMAB) and Global Reporting Initiative (GRI).
Financial Reporting Council (FRC) chairman CQK Mustaq Ahmed addressed the programme as the chief guest while it was also attended by Bangladesh Securities and Exchange Commission (BSEC) commissioner Dr Swapan Kumar Bala, GRI head of sustainable development Pietro Bertazzi, GRI director (South Asia) Dr Aditi Haldar with ICMAB president Mohammed Salim in chair.
Delivering his speech, FRC chairman said the government has been seriously looking into every aspect of SDGs by making partnership with local and international development organisations, country's businesses and NGOs.
The companies that valued in between Tk 50 million to Tk 300 million are marked as SMEs in Bangladesh, he said, adding the country's economy is largely dependent on SMEs and some other non-formal sectors.
Mr Ahmed said some of the big companies in the country have already started making sustainability reporting but regulatory and policy support is required for the small businesses to do so.
However, he said, "We have many regulations and people are also very receptive to global practices but the problem lies in the implementation."
The FRC chairman said accountability in local government and good governance is crucial to ensure implementation of policies at grassroot level.
He also underlined lack of workforce in different government departments behind lower enforcement of regulations and policies in businesses to protect environment and other legal issues.
Supply chain sustainability is a holistic view of supply chain processes and technologies that addresses the environmental, social and legal aspects of a supply chain's components as well as their economic factors.
A GRI publication titled 'Empowering Small Business: Recommendations for policy makers to enable corporate sustainability reporting for SMEs' was also unveiled at the programme.
Giving a presentation on the publication, Mr Bertazzi said capacity building of accounting professionals and SME-sector people, policy development for reporting and accountability of companies and regulators are required for proper sustainability reporting for SMEs.
Focusing the challenges towards sustainability reporting for SMEs, he said definition of SMEs varies country to country that remains a barrier to frame a uniform policy for the sector.
Even when the definition is clear, there is a lack of support for SMEs as such organisations are unlikely to have in-house sustainability knowledge and expertise, which means they may have to rely on external consultants - an often-costly enterprise, he added.
He also said there are very few policies that cater to SMEs and almost none are SME-specific when related to sustainability reporting.
Besides, informal nature of SMEs and lack of representation of sector people in policy making process are also setbacks to sustainability reporting for SMEs.
Highlighting preliminary recommendations of GRI for SME sustainability reporting, he said adoption of national policies targeted at large and listed companies with provisions that include supply chain due diligence, can impact SMEs indirectly.
These policies may lead to SMEs reporting on different sustainability aspects, sustainable development, experts added.
GRI also recommended ten practices to create a favourable environment for SME reporting -- bringing transparency to the supply chain; providing direction to SMEs through national guidance, frameworks, programmes and legislation; focusing on specific reporting requirements; following global principles for business and human rights; supporting local SMEs through international and regional reporting frameworks and guidelines.
Government subsidies for SME sustainability, data requirements from financial institutions for SME sustainability reporting, certifications and awards for SMEs for its sustainability, training and capacity building for SME reporting, and supporting other stakeholder activities to improve the SME reporting environment.