We started to live beyond our ecological means on October 7, 2006. The New Economics Foundation, a UK think tank, revealed that humanity has used up what nature can renew this year and is eating into its "ecological capital".

On October 30, the government's chief economist Sir Nicholas Stern published his authoritative report on climate change, which he described as the "greatest and widest-ranging market failure ever seen".

Social and environmental responsibility has become an important driver in many modern businesses-half of all FTSE-100 companies produce a Corporate Social Responsibility (CSR) report.

So, if large corporations have developed policies to accommodate UK consumers and their increasingly progressive position on ethics, why have small and medium-sized enterprises (SMEs) been less active in integrating sustainable business practices into their organisations?

Of course, CSR is voluntary. But SMEs could prepare for future demands, including the new Climate Change Bill, by taking the initiative now to examine their own impact and set out actions to deal with it. "SMEs are in a unique position in that they can learn from the mistakes made by the large corporations," says Dr Tauni Brooker, UK director of sustainable solutions at engineering design firm, URS. "They have the luxury of time to ensure that their CSR policy is measured, consistent and all-encompassing," she explains.

And it doesn't take a huge budget or a large workforce to achieve a great deal; simple steps can produce beneficial results to employees, the bottom line and the environment.

Some initiatives, such as a salary advance for a season ticket or car sharing schemes, are a great way to boost morale as well as your firm's green credentials. Providing staff with bikes (electric or peddle) to get to work can also be a good idea, as it ensures that the workforce remains fit and healthy. In support of its Green Travel Plan, the government has introduced a tax break scheme that allows employers to loan bikes to their staff as a tax-free benefit.

Nick Child, managing director of Powabyke, estimates that around 30,000 people have ditched their car or petrol scooter in favour of an electric Powabyke. He adds: "On a day-to-day basis, our staff travel to and from work using electric power. We practice what we preach-our finance director is happy and the environment benefits."

Carbon emissions are the key cause of climate change, and business is responsible for up to 45 per cent of all carbon emissions in the UK. Meanwhile, SMEs spend around £6bn a year on energy, £1bn of which is wasted.

Manufacturing firm Beverley Veneers was incurring large energy bills as a result of two air extractor systems that were used to remove and collect airborne dust as well as two gas air heaters (due to poor roof insulation). The Carbon Trust recommended that the company install a 300 kw waste wood burner with a single air extractor system, which would enable the sawdust to be collected and disposed of more efficiently. The Carbon Trust estimates that Beverley Veneers will reduce its energy expenditure by approximately £40,000 a year, while also managing to reduce its carbon emissions by more than 59,000 kg every year.

"Even if you don't care about the environment," says Peter Lacy, executive director of the European Academy of Business in Society, "CSR simply makes good business sense.