--- description: With the world facing climate change challenges, Capterra surveyed 200+ companies for insight into their business sustainability practices. Read more here. image: https://gdm-localsites-assets-gfprod.imgix.net/images/capterra/og_logo-e5a8c001ed0bd1bb922639230fcea71a.png?auto=format%2Cenhance%2Ccompress title: What are the business sustainability challenges for SMEs? --- # What are the challenges for Australian SMEs implementing business sustainability practices? Canonical: https://www.capterra.com.au/blog/3489/climate-change-challenges-in-business-sustainability-australia Published on 28/02/2023 | Written by Laura Burgess. ![What are the challenges for Australian SMEs implementing business sustainability practices?](https://images.ctfassets.net/63bmaubptoky/64iWxRLBartrP5yNLDcYLO/b4ef2578b44752d312c2e72bb917b123/business-sustainability-and-climate-change-challenges-AU-cap-header.png) > The Australian government has committed to reducing greenhouse gas emissions to 43% below 2005 levels by 2030 in the global fight against climate change. But what sustainability challenges are SMEs up against, and is support available for those who want to do their part? Capterra surveyed 200+ Aussie companies on going green. ----- ## Article Content The Australian government has committed to reducing greenhouse gas emissions to 43% below 2005 levels by 2030 in the global fight against climate change. But what sustainability challenges are SMEs up against, and is support available for those who want to do their part? Capterra surveyed 200+ Aussie companies on going green.In this articleWhat is Australia’s climate change policy?What support is available for companies acting on climate change?What are the biggest challenges for companies committing to business sustainability?What are the positive impacts of companies going green?What is the outlook for Aussie SMEs and climate change concerns?Capterra’s first article in this two-part series looked at the climate change strategies of SMEs to see how organisations are modifying their practices to be more environmentally conscious. In part one, survey results found that adopting climate-friendly practices may prove difficult for some companies who are interested in reducing their carbon footprint but haven’t yet taken action. The main reasons cited by businesses were a lack of knowledge, it not being a priority, and insufficient funding. In part two, Capterra looks at the potential challenges businesses might face when implementing a climate change strategy. What government support is available? Are companies interested in using tools that can help measure their impact on the environment? Capterra surveyed 255 SME business leaders to learn more about business sustainability challenges. The full methodology is at the bottom of this article. What is business sustainability?Business sustainability refers to a company's strategic approach to doing business without negatively impacting the environment, community, or society. Sustainable business practices, such as reducing a company's carbon footprint, creating a climate-conscious workplace, and adopting a zero-waste culture, can help businesses address global climate change challenges. What is Australia’s climate change policy?Australia’s climate change policy initially aimed to achieve a 26-28% emission reduction by 2030 but was updated in July 2022. The Climate Change Bill 2022 was introduced to enshrine into law the government’s commitment to reducing greenhouse gas emissions and hitting net zero by 2050. The targets must be interpreted consistently with The Paris Agreement and Australia’s formal National Determined Contribution (NDC). Capterra previously highlighted that 57% of SMEs are currently taking climate change action. When asked if they thought the government’s aim to reduce CO2 emissions to 43% below 2005 levels by 2030 was feasible, 62% of these survey-takers optimistically said yes. A quarter of companies (26%) consider the objective unattainable, whilst 12% feel unsure. Despite the latest climate pledge from the government, Australia is still lagging in the global Climate Change Performance Index 2023. Originally in last place, the nation has moved into 55th out of 63 —just ahead of Iran, Saudi Arabia, and Kazakhstan— meaning there is catching up to do. But Australia’s 2.5 million small businesses can positively impact the nation’s total carbon emissions if they commit to reducing their carbon footprint every year. So, do companies feel supported in taking climate change action?What support is available for companies acting on climate change?Various government aid is available for Australian businesses that want to go green. 71% of the companies that are already implementing environmental practices are aware of this support, as:23% said they are receiving aid31% have made a request but have not yet received support17% are aware support exists but haven’t requested itHowever, over a quarter of businesses (29%) are unaware of the support they can access, with 16% stating no help is available and 13% of respondents indicating they do not know that government aid is a potential option. Capterra asked respondents who are aware of and are receiving government support about the type of aid available to them. Survey-takers cited ‘financial support to migrate to less CO2-emitting electrical systems and equipment’ (60%) the most. This was followed by ‘financial support to switch to renewable sources’ (42%). Companies can apply for different types of government funding. For example, The Energy Efficient Grants for Small and Medium Enterprises initiative means companies can potentially receive between $10,000 to $25,000 if their application is approved. Grants under this scheme can help SMEs monitor energy use and replace or upgrade existing equipment to improve and save on energy costs. But how do survey-takers feel about the support they have received?How useful is government support for companies taking climate action?Capterra’s survey found that 70% of SMEs receiving government aid said it was enough and helped make a significant change. 30% said it helped, but more can be done to support businesses implementing environmentally conscious measures.Survey-takers were asked in which areas the government should make more efforts to encourage companies to minimise the impact of climate change. Giving more financial support (54%) was the most-selected answer for business leaders. Other areas include:Be more precise about the environmental regulation framework (53%)Have clearer communication with businesses (48%)Introduce a green tax on energy, transport, or pollution (43%)Put more restrictions on companies to avoid pollution (42%)Tips for SMEs: Compliance software enables companies to keep up with environmental regulations, by helping to report on emissions, hazmat procedures, and regulatory policies. Identifying areas of non-compliance is crucial for SMEs, whether internal or external, and can help to reduce any legal problems. What are the biggest challenges for companies committing to business sustainability? Implementing a business sustainability program can present challenges, even if some companies have government support. According to the companies already taking action, the main challenges they face include a lack of financial resources (49%), a lack of knowledge and skills (42%), and administrative processes (38%).Not all steps towards going green have to cost a lot of money, and being more efficient by lowering energy consumption and reducing waste, for example, means businesses can save on costs. To take control of the company’s energy consumption, SMEs first need to track and analyse usage; for instance, via smart meters and energy management tools. How can SMEs overcome business sustainability challenges?Implementing environmental measures does not have to be complicated, and a corporate climate strategy can help to overcome these problems. Companies can start by dedicating a few hours a month to the initiative, focusing on recycling, eliminating plastics, switching to LED lightbulbs, and using more efficient appliances. Team training is also essential if companies want to increase their sustainability practices. A previous survey by Capterra found that companies implemented 64% of employees' sustainability initiatives. Offering employees time to learn about this area can encourage them to commit to going green, bring ideas, and feel part of a dedicated cause. When it comes to organising and reporting on sustainability practices, strategic planning tools can aid with goal setting and help companies to track their milestones. Prioritising a sustainability strategy may concern some organisations, but companies must keep up with consumer demand, regulatory requirements, and investor interest. What are the positive impacts of companies going green?For companies to remain relevant, sustainability should be integral to a corporate strategy. Capterra asked the survey-takers taking climate action to share the outcomes their company has seen. The top three results include improved ‘employee morale’ (47%), ‘customer satisfaction’ (42%), and ‘brand differentiation between competitors’ (34%). Notably, 9% of respondents said they had not noticed any results yet. Conscious consumerism is rising, with shoppers researching products before buying them. For example, customers may boycott brands that mistreat workers, purchase cruelty-free beauty products, or buy locally grown food products. Companies can focus on consumer awareness by updating customers on any environmental actions they have carried out via newsletters or social media. Capterra’s previous survey found that a company’s sustainability practices influenced 61% of consumers’ purchase decisions. Businesses committed to taking climate action and being transparent about their practices with a green mission statement will likely appeal to consumers more. Other positive green results companies have seen include ‘more investment’ (32%), ‘increased profitability’ (27%), and ‘stakeholder satisfaction’ (27%). An influential factor in the movement towards sustainable business practices is investor pressure. Investors recognise environmental, social, and governance (ESG) as a value driver. A promising business sustainability plan may encourage investors to help. Tips for SMEs: ESG tools can help companies collect data on their initiatives and report their metrics and progress to potential investors. This also benefits businesses that cited a lack of financial resources as the top challenge of investing in environmental measures. What is the outlook for Aussie SMEs and climate change concerns?Committing to sustainability as part of a corporate strategy is rewarding for businesses, and SMEs also play a crucial role in climate action success. Over half of survey-takers (57%) reaffirmed this by agreeing with the statement, ‘immediate action must be taken to limit the impact of climate change, or it will be too late’. Although this statement acknowledges a positive outlook, 28% of respondents alarmingly agree that ‘climate change is a problem, but fighting against it shouldn’t be a priority right now’. A further 11% believe ‘it isn’t a cause for concern’, and 4% think ‘it’s too late to revert climate change as the damage has been done’. Therefore nearly half of Australian businesses (43%) are perhaps not as concerned about the goals outlined in the Climate Change Bill 2022. More could be done regarding government support for sustainable businesses, including access to more funding and education on climate change and companies' roles. SMEs must recognise that taking action benefits the planet and can help businesses; for example, with brand image and customer loyalty. A business sustainability plan can also attract investors and improve financial performance. Companies can start small by implementing simple climate action measures in the workplace (such as recycling, waste reduction, and using a carbon calculator). These steps are crucial if Australia is to take carbon emissions reduction targets seriously before 2030.Looking for sustainability software? Check out our catalogue\! ## Disclaimer > Methodology Capterra conducted this survey online in November 2022 among 255 business leaders and managers in Australia. The criteria selected for this study are as follows:Australian residentOver 18 years of ageOwner, 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/officeMust be able to identify the main business model of their company (B2B, B2C, or B2G)Works in a company founded more than a year agoWorks in a company selling services and/or productsWork in a company that manufactures, produces and sells its products directly or performs through a third party ## About the author ### Laura Burgess Laura is a Content Analyst at Capterra, researching and giving insight on tech trends to help SMEs. 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