Capterra’s survey of 255 local companies reveals that most Aussie firms worry about the impact of climate change on their business. What measures are companies taking to reduce their carbon footprint? What more could they do to play their part in achieving net zero targets?
In this article
- 75% of SMEs are worried about the effects of climate change on their operations
- Nearly half of Aussie SMEs are not taking action against climate change
- Sustainable measures companies are taking against climate change
- Going green is officially part of the company strategy for 80% of business leaders
- 62% of business decision-makers say more can still be done
Every company has a carbon footprint, whether a large corporation or a small to midsize enterprise (SME). 98% of businesses in Australia are SMEs and undoubtedly contribute to greenhouse gas emissions and volumes of waste such as hazardous chemicals and plastics. Extreme weather events like bushfires or the decreased demand for goods that are not sustainable also pose potential climate-related business risks.
By taking action, such as increasing energy efficiency, companies can form part of the solution in saving the planet and lowering the impact that global warming has on businesses. But do companies have climate change strategies in place? Capterra surveyed 255 SME business leaders across all industries to determine what their companies are doing to tackle the global crisis. The full methodology is at the bottom of this article.
75% of SMEs are worried about the effects of climate change on their operations
Australia had a difficult year in 2022, especially as the climate reached record-breaking weather conditions and companies faced a global energy crisis. The government also set a new ambitious climate target to reduce gas emissions to 43% below 2005 levels by 2030.
A warming planet can lead to business problems, such as rising energy costs, supply chain disruptions, and government mitigation measures. But are these potential issues at the forefront of business owners’ minds? Capterra’s survey found that climate change concerns amongst Australian SMEs are high, with 75% of business leaders saying their company is ‘extremely concerned’ (28%) or ‘somewhat worried’ (47%).
Employees also want climate-positive action from their companies, with 73% of managers saying staff have also expressed concerns about climate change. A previous study by Capterra found that employees value sustainability in the workplace, with 60% of Aussie companies having sustainable measures in the work environment.
Creating a ‘green team’ can help employees feel involved with the company’s sustainability measures. Employee engagement raises awareness and encourages staff to contribute ideas for future climate actions their company can take.
Nearly half of Aussie SMEs are not taking action against climate change
The government’s climate change strategy aims to reduce emissions, and one of the focal points is to support businesses and industries to adopt innovative and smarter practices and technologies. It also encourages businesses and consumers to reduce carbon emissions. But are Aussie companies taking action to help hit this target?
When asked if their company was modifying its business practices to minimise the impact of climate change, 57% of business leaders said yes. However, 43% of survey-takers said their organisation had not taken any action in favour of the climate. This group comprises 32% of companies interested in the initiative and 11% who are not.
Survey-takers at SMEs that do not take action against climate change but are interested in doing so were asked why their business hasn’t made any changes yet. The main reason cited by respondents was due to ‘a lack of information on how to take action’ (40%). This was followed by ‘not being a current business priority’ (33%) and ‘insufficient financial resources’ (28%).
There are several initiatives in which some Aussie companies are currently involved, from which survey-takers can draw inspiration. Climate Active sees the government partner with businesses to drive climate change action. Any company of any size can be Climate Active certified as proof the brand has achieved carbon neutrality.
Companies must measure and reduce emissions, offset remaining emissions, and publicly report on this to be certified. There are also case studies from over 400 of Australia’s well-known brands that are Climate Active certified, which detail what measures they have taken.
Sustainable measures companies are taking against climate change
Every year, Australia produces around 76 million tonnes of waste, with 27% going to landfills. Companies that reuse, recycle, and recover resources can help to measure their waste and reduce the number of materials that end up in landfills. But what actions are survey respondents taking to manage waste and be environmentally conscious at their organisation?
Recycling and waste reduction
One of the most popular measures companies are taking to minimise the impact of climate change includes ‘recycling materials used in the production process and/or in the offices’ (53%). This was followed by ‘separate waste bins’ (for plastics, paper, and organic waste) and ‘reducing waste’, both 51%, respectively. Recycling not only reduces waste disposal costs, but it can create a positive company culture and enhance the organisation's reputation.
Using less energy
Another important and popular measure, according to business owners, is ‘using less energy’ (52%), for example by lowering heating or cooling and switching to LED light bulbs. Reducing power consumption can reduce running costs for companies. An energy-sufficient strategy also helps with compliance and can improve working conditions for employees, such as their comfort and productivity.
Introducing a paper-conscious policy
‘Promoting a paper-conscious policy’, such as printing a document only when it's indispensable, was also one of the most-selected measures used by survey-takers (45%). Less paper use can reduce the cost and clutter of maintaining records and save money on printer upkeep and ink, and envelopes and postage. It is efficient for clients to receive invoices or important documents almost immediately instead of relying on the post, which also speeds up how quickly they pay.
Going green is officially part of the company strategy for 80% of business leaders
Some larger businesses are setting a positive example in the journey to achieving net zero by 2050 (as determined in The Paris Agreement). IKEA’s annual carbon emissions fell 6% from the pre-pandemic level despite record sales. Although its carbon footprint from materials expanded, the drop in emissions came from using more renewable energy across operations and a larger share of sales in energy-efficient light bulbs and plant-based food.
But do smaller businesses have goals to help achieve global net zero emissions? 80% of the survey-takers already applying changes to their business practices said they officially have specific climate change goals within their company strategy. Only 21% said they are taking measures without a specific goal.
When asked who was responsible for implementing climate goals in their company, ‘a department with more than one person working only on that’ was the most cited response (24%). This was followed by ‘a group of people with other non-related responsibilities’ (18%) and ‘managers or Board of Directors’ (16%).
An environmental, social, and governance (ESG) team can help companies make sound, environmentally friendly decisions. Small efforts towards sustainability in the workplace by the ESG team, such as waste reduction and energy-efficient upgrades, can benefit the company’s reputation whilst decreasing its carbon footprint.
62% of business decision-makers say more can still be done
A combined total of 98% of business leaders whose company is making changes to their environmental measures say it has been successful. However, within this group, 62% said that despite being somewhat successful, they could still do more. SMEs must remember that small actions still add up in the global fight against climate change.
The following factors should be considered as part of climate change strategies:
1. Assess your current carbon footprint: Companies can use one of the many free online carbon calculators available on the internet to estimate their carbon emissions. This can help businesses identify strategic approaches to reducing emissions. Targets can be set that are related to certification, as seen with Climate Action, and key performance indicators (KPIs) can be measured using sustainability software. Companies may also opt to use carbon credits.
2. Measure business waste: Companies should visually assess the bins presented just before collection, noting the sizes, how full they are, and how often they are full. They can then identify the most suitable waste collection contractors (private or from the council) and implement material collection systems around the premises (e.g., wheelie bins may not be the same bins used for collecting materials).
3. Reduce company travel: Corporate travel, particularly via flights, has been greatly reduced since the coronavirus pandemic, with many companies using video conferencing instead. Reducing travel on the road also cuts back on pollution and emissions. With many companies following a hybrid model, employees working from home have reduced commuting time.
4. Build a culture of awareness: Educating employees on climate change can encourage them to be more environmentally conscious and to get involved in sustainability initiatives. Training programs can equip employees with the right knowledge about environmental issues and measures, such as recycling and saving energy in the workplace. Employees can form a ‘green team’ to feel more involved and create a team atmosphere.
In the next article in this two-part series, Capterra looks at the potential challenges businesses might face when implementing a climate change strategy. What is the Australian government doing to help smaller businesses? Are they providing financial support? We answer these questions and more.
Capterra conducted this survey online in November 2022 among 255 business leaders and managers in Australia. The criteria to be selected for this study are as follows:
- Australian resident
- Over 18 years of age
- Owner, executive manager, or senior manager at an SME (company with 2-250 employees)
- Works in a company where a significant portion of the employees regularly attend a physical workspace/office
- Must be able to identify the main business model of their company (B2B, B2C, or B2G)
- Works in a company founded more than a year ago
- Works in a company selling services and/or products
- Work in a company that manufactures, produces and sells its products directly, or performs through a third party