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East of England SMEs aiming too high with Green strategies

Tuesday, 25 September 2007

Businesses in Cambridge and East Anglia are being hampered in their desire to tackle climate change by a lack of financial and physical resource, according to a new study by KPMG.  The survey of small to medium-sized businesses, shows that nine out of ten (88%) organisations feel it is the responsibility of all businesses to take seriously the issue of climate change. Furthermore, just under half (48%) believe that by taking appropriate action, they can make a real tangible individual impact in the battle against climate change. However, this positive stance is coupled by the fact that businesses nevertheless want to see the government taking a clear lead on the issue - more than three in five (65%) believe that it is up to our political leaders to take the greatest responsibility for driving efforts to tackle climate change. Robert Ferguson, senior partner for KPMG offices in Cambridge and Ipswich, commented, “The desire to reduce the environmental impact of ones activities is borne by more than just an ethical imperative – having a structured and coherent policy to reduce carbon emissions makes good business sense too. After all, customers are becoming more aware of, and concerned about, green issues and are increasingly demanding environmentally friendly products and services. Having strong green credentials can undoubtedly help strengthen brands in the eyes of today’s more environmentally discerning customers, building loyalty and boosting customer acquisition and retention.” However, this willingness to take positive remedial action is somewhat tempered by the fact that more than a third of businesses (37%) do not feel that they have the necessary time or resource to be able to tackle climate change to the best of their abilities – whether this be financial resource, or physical resource in the form of manpower. Robert Ferguson commented, “This lack of time and resource may stem from a wider lack of understanding of the broader benefits that adopting ‘green’ measures can bring, in addition to the general distraction the day-to-day running of the business. That said, we do wonder whether there are perhaps some misconceptions with regards to the ways in which businesses should be tackling climate change. Too many firms believe that they should be making grand gestures or doing something on a large scale, when in fact there are many simple measures that can be undertaken that can make a real difference. “For instance, investing in energy efficiency can simultaneously reduce costs and exposure to future regulatory risk. Employee education can also have a significant impact through stimulating behavioural changes. Meanwhile, some more advanced businesses are beginning to engage with their supply chain, helping to create an ‘environmental natural selection’ among providers, bringing the ones with the greatest carbon-lowering credentials to the fore while raising the standard for industry as a whole.” So what steps are middle market businesses taking to tackle climate change? Perhaps unsurprisingly, KPMG’s survey indicates that recycling wherever possible (98%), reducing energy costs (93%) and ensuring a sustainable supply chain (81%) are indeed the most popular green practices. However, some businesses are taking additional measures such as reducing the impact of business travel (70%), using renewable energy (47%) and offsetting carbon emissions (40%). Surprisingly, a majority of businesses (57%) indicated that they would prefer taxation to market-led strategies for policing carbon emissions. Robert Ferguson commented, “This could well be driven by the perceived complexity of carbon trading and the lack of in-house expertise, versus the simple certainty of taxation.”

 

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