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Media
release
7 October 2009
Breakthrough
data on Sustainable business activity
Launch
of an SME Sustainability Index
SME
"Environmentally Friendly" claims not sustainable
66%
of Managers want to take action on Climate Change
More
SME concern for Waste/Energy than accessing Business Credit
SME Sustainable Index at only 14.1 out of 100
Sustainable
SMEs experiencing significant cost benefits
70%
of SME Sector moving on Sustainability issues
Experience
shows Sustainability helps recruit best talent
Download
.pdf version of the media release (7 pages.)
The
Sustainability Index
The AFS SME Sustainability Index is a quarterly survey of Australian
Small and Medium Enterprises (SMEs). The Index measures each
SME on 21 Sustainable activities. Interviews are undertaken
with business decision makers in organisations employing 5 to 200
people. The survey provides a statistically representative
sample for this business sector by interviewing 800 decision makers
across 14 industries, making the results accurate to +/-3.5% at 95%
confidence
In the interview respondents identify
their
business performance, major concerns, regional orientation and if they
export. The survey collects classification information such
as title, gender, age of the respondent and the length of time in
business. A summary of environmentally sustainable activities
includes making reductions in paper, water, packaging, waste, energy
and chemicals. Respondents may indicate activities in areas
such as sustainability orientated employment, community engagement,
purchasing policy, grant access and the development of green
products. Each respondent considers whether these activities
were undertaken in the last twelve months. The responses are
weighted by their complexity to undertake to produce an Index
score. The Index score represents Australian SMEs adoption of
the 21 activities. A score of 100% equates to all SMEs are
performing each of the 21 activities. A detailed report of
industry specific scores (and potential scores) will be presented in a
future report and made available to Government.
Independent review of the data and its claims is undertaken by Net
Balance, a leading Sustainability Assurance Practitioner of the AA1000
Assurance Standard for corporate Australia. Through the Net
Balance Foundation advises SMEs on improving sustainability
performance.
Download
.pdf version of the media release (7 pages.)
The Australian SME
Sector
The survey is in accord with Australian Bureau of Statistics (ABS) data
of Small and Medium businesses. At last count this represents
some 306,617 firms (2007.)
Category
Employees
Number
%
Large firms
200+
5,876
0.3%
Medium-sized
firms 20-199
78,304
3.9%
Small
firms
5-19
228,313
11.3%
Micro-enterprises
0-4
1,699,277 84.5%
According to the ABS, the SME sector
accounts for around 73% of all actively trading businesses in
Australia, employing 4 million+ people or 42% of total employed
persons. It is estimated to contribute 46% of the value of
Australia’s domestic production.
ABS Sources: Cat. No. 8165.0, Cat. No.1321
[Further
comment available – see
Media contacts.]
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Research
Headline – Ability to Access Credit less of a concern than
Waste/Energy
When asked.. which of the following challenges do you consider is a
major concern for your business at this point in time? SMEs responded:
Maintaining revenues *
74%
Finding the right talent for your industry* 70%
Meeting government regulations*
55%
Consumer confidence
55%
Energy efficiency **
40%
Level of business debt
39%
Supplier stability
35%
Managing waste **
33%
Ability to access credit
27%
Reducing emissions **
25%
Global competition
19%
Union issues*
10%
** Denotes core Sustainability item
* Denotes related Sustainability item
AFS Executive Chairman
– Drew Le Grand
said “In times of the much publicised Credit Crunch, the
ability to access credit ranks below managing waste and energy
efficiency as a major concern for Australian SME's, equal almost with
reducing emissions as a major concern. Sustainability
concerns appear more important than global competition and Unions as
national SME priorities.”
[Further
comment available – see
Media contacts.]
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Research
Headline – A Sustainable Image Helps to Recruit the Best
Talent
One in four organisations nationally (result 26%) found that a
“sustainable image” helps them to recruit the best
employee talent. “Finding Talent” ranks
as one of the top priorities for SMEs (refers to table above.)
Net Balance Director
-
Terence Jeyaretnam commented
“International experience has also proven that organisations
that develop a reputation for sustainability can attract the best
recruits. Given a choice, recruits will not choose to work
with companies that have a poor sustainability image, this is even more
evident for industries with a traditionally poor reputation.”
[Further
comment available – see
Media contacts.]
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Research
Headline – 70% of SME Sector investigating
Sustainability Activities
Results of self classified responses to the question of 'the Business'
current position on Sustainability?'
Category descriptions:
1. No awareness of how
Sustainability matters to my Business
2. Aware … but no
interest at this time
3. Investigating
and/or monitoring only
4. Actively adapting
the business to be more Sustainable
5. Adopted
Sustainability as a fundamental part of our operating processes
Net Balance Director
-
Terence Jeyaretnam commented
“It is immediately impressive to see that more than 70% of
Australian SME’s are investigating, adapting or have adopted
sustainable processes as a priority in their operations. This
gives an important picture of the state of play. It will be
interesting to see how quickly the curve shifts over time.”
[Further
comment available – see
Media contacts.]
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SME
"Environmentally Friendly" are not Sustainable
Asked if they believe their business is environmentally friendly, 72%
indicated they are – but asked about the sustainability
activities undertaken, less than 15% were undertaking a threshold level
of the relevant activities that are of a sustainable nature to be
considered environmentally friendly.
Net Balance General
Manager – Ross Wyatt commented
“Environmentally Friendly” is a dubious term and
does not necessarily accord with undertaking sustainable business
processes. In some case it may show a lack of awareness or
unwillingness to believe their business may have a negative
environmental impact.”
Research
Headline – SMEs Experiencing Success with
Sustainability
When asked what is the biggest success or discovery SMEs have had with
regard to Sustainability – business owners and managers
responses included the following comments...
- "I
think, looking closely, we have seen more opportunities to recycle what
was previously classed as waste"
- "There
are cost savings and other sustainable benefits in applying a policy of
using electronic communications rather than seeing clients.
Our bottom line is better off by being sustainable."
- "When
we introduced the energy management system, we found that it reduced
power consumption by 5%-10%"
- "Introduction
of new machinery has reduced our off cuts of waste"
- "The
gaining of traditional owner acceptance of our activities on their
land."
- "Water
savings of 30%"
- "Staff
morale increased, the staff got right behind our plan and new systems"
- "With
a government grant we implemented rain water tanks and it has worked,
saving water, waste water and water costs generally"
- "Our
business is able to provide services in this area; we now give advice
on the carbon sequestration value of land"
Net Balance Director -
Terence Jeyaretnam said:
“SME opinion suggests that resource efficiency
is starting to produce material bottom line benefits in reducing the
costs of doing business relating to water, waste and energy. It shows
how sustainable behaviour “pays off.” The results
are a huge realisation and one right at the centre of the National
Recycling Initiative."
[Further
comment available – see
Media contacts.]
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Research
Headline – Two Thirds of Managers willing to Take Action on
Climate
The graphic below depicts the SME attitude to climate. It is
calculated in response to two questions, concern
about their businesss impact on climate change and their willingness to
act. The percentage of the population is shown (white %) in
each quadrant.
Category Descriptions
Change Agents – Concerned about their impact and willing to
take action where possible.
Worriers – Concerned about climate change but challenged
to see what action to take.
Ostriches – Not concerned and unwilling to take action at
this time.
Heroes – Not concerned about their businesses impact but
willing to take action anyway.
AFS Executive
Chairman
– Drew Le Grand
said “Business owners and managers see themselves as empowered to
take action on climate change and their actions have a great
impact. They can identify opportunities to take significant
action which maybe a contrast to the general public.”
Net Balance Director
-
Terence Jeyaretnam commented
“Over 50% of SMEs are concerned about their
business’ contribution to climate change. Over 33%
of decision makers would be willing to take action even though they are
not concerned about the impact their business makes to climate
change.”
[Further
comment available – see
Media contacts.]
[Return to top]
Index
Launch Score – SME Sustainable Activity at 14.10%
The
initial results of the SME Sustainability Index provide a score of
14.10 out of 100.
Details on the construction of the Index can be found on in the first
section (top of this page).
Net Balance Director
-
Terence Jeyaretnam commented
“This latest research is showing over two thirds of
businesses have taken steps to become more waste, energy and resource
conscious in the past twelve months, although the more complex
activities are still to be investigated and adopted. On
average, organisations are participating in 5.59 sustainable
activities. The overall Index will be a vital measure of
Government policy and SME activity.”
About AFS
'Smart askers'
AFS 'Smart
askers' is an information services company, specialising in survey data
collection across Australia and New Zealand. AFS is recognised for its
superiority in reaching business decision makers; all projects run with
AFS have ISO quality accreditation.
About Net
Balance
Net Balance is Australia’s largest sustainability advisory
and assurance firm with offices in Melbourne and Sydney. Net
Balance works with some of Australia’s largest corporate and
brands on sustainability and with SMEs through Net Balance Foundation (www.netbalance.com).
Media
Contacts
Net Balance
Terence
Jeyaretnam Net Balance – Director
Contact for expert analysis: +61 3 8641 6400
Ross Wyatt Net Balance -
General Manager
Contact for expert comment: +61 3 8641 6400
AFS 'Smart
askers'
Drew Le Grand - AFS
Executive Chairman
Contact for research comment: +61 3 8789 4444
Brett Galvin - Media
Co-ordinator
Contact for urgent details: 0400 324 705
brett.galvin@afs-smart.com.au
Download
.pdf version of the media release (7 pages.)
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