Some entrepreneurs have an optimistic outlook for their businesses, with plans to invest and to address environmental, social and governance (ESG) issues, research suggests.
Despite struggling with everything from profit margins to sales to recruitment during the pandemic, small businesses are preparing to be resilient in the year ahead, finds an online poll from Payments Canada, an Ottawa-based organization that operates a payment clearing and settlement system.
Over the next 12 months, more than one-quarter of small business respondents (27%) said they planned to invest more in their businesses, and an even greater proportion — 29% — planned to increase employee headcount.
Small businesses were also embracing financial management, with 27% of respondents planning to reduce debt, and 18% planning to increase business savings.
Some business owners are also worried about the federal government’s pandemic benefits running out. The Canadian Federation of Independent Business is calling for the Liberals to extend the Canada Emergency Wage Subsidy and Canada Emergency Rent Subsidy, which expire Saturday.
According to the small business lobby group, only four in 10 businesses are back to normal sales.
The pandemic also motivated businesses to integrate ESG considerations into their processes, research from advisory firm KPMG finds. More than three-quarters of small and medium-sized businesses polled online (78%) said they increased their commitment to ESG issues since the pandemic began.
“The pandemic has raised the public’s awareness about societal inequities, while the growing frequency of devastating natural disasters heightens concerns about the impact on businesses and communities,” said Roopa Davé, partner, sustainability services, with KPMG in Canada, in a release.
“Business leaders are increasingly feeling the pressure from their stakeholders to be more transparent and accountable on ESG and sustainability. Many now recognize ESG isn’t just a tick box exercise; it’s become core to the way we do business.”
Seven in 10 respondents said their customers expect them to take the lead on social challenges, such as racial and gender inequality or climate change, and 63% said major global challenges like climate change are a threat to their companies’ long-term growth and value.
As many as two-thirds of respondents (66%) said they’ve set social and environmental targets in their business plans and tied management compensation to achieving them
ESG commitment increased along with revenues: 82% of companies with annual gross revenues of $100 million or more increased their ESG efforts compared to 74% of companies with revenues between $10 million and roughly $20 million.
The Payments Canada poll was conducted in July and August 2021 through Leger’s online panel with 500 businesses (annual revenues were less than $10 million).
KPMG’s online survey of 505 Canadian small and medium-sized business owners and decision-makers was conducted between Aug. 6 and Aug. 15, with 31% having annual revenues over $100 million and 24% having annual revenues of $50 million to $100 million.
The polling industry’s professional body, the Canadian Research Insights Council, says online surveys can’t be assigned a margin of error because they don’t randomly sample the population.