Rebates could help business change

Small and medium enterprises (SMEs) would be more receptive to change if they were offered rebates for environmentally sustainable practices, according to a Swinburne study.

Business lecturer Dr Aharon Factor has conducted a study of Melbourne-based SMEs, suggesting how the government could make its carbon tax more palatable by rewarding them for changing their practices.

"Research estimates that globally small and medium businesses are responsible for almost three-quarters of industrial pollution, dwarfing the environmental impact of big business," Dr Factor said. "Yet small businesses are often not on the regulatory radar, partly because their numbers make enforcement a problem."

Dr Factor said experience had shown that the more environmentally efficient a business's production processes, the more efficient and competitive the business tends to be - ultimately increasing the government's tax take.

"There is a win-win for everybody. But it will only work if governments invest in training and support services to help these businesses become more efficient in the first place."

Dr Factor surveyed 350 business managers of businesses with no more than 250 employees, and interviewed 14 in more depth.

He found change will be encouraged down the supply chain as international corporations alter their practices. But he also found that SMEs look to government for leadership and assistance programs.

"Legislation alone will not be effective in driving change. It needs to be supported by local government providing improved infrastructure to support recycling, for example, while state and federal governments provide the overarching policies, financial incentives, rebates and education programs."

He found that while Melbourne businesses were making some progress on sustainability these were largely cosmetic changes centred on basic business practice. He also found that while awareness of environmental issues was high, change has been largely restricted to management-level energy consumption and basic waste handling.

Easy-to-recycle wastes such as paper and some types of wood and steel are widely recycled, but more difficult materials - polystyrene, shrink wrap, coolants and paints - still end up in landfill.

And while SMEs are conscientious about switching off lights and machinery and introducing low-consumption lighting, his study found they were generally not buying green energy because they didn't benefit from incentives available to big business.

Dr Factor said this indicates that a two-tiered approach to helping business change is needed. The first tier would address basic business practice in terms of recycling and energy use, ensuring enterprises had access to programs, resources and services to help them maximise recycling and minimise energy consumption. The second tier would tackle the more complex changes of long-term significance - operations and product design.

Both tiers can be addressed through a combination of programs, education, policies and incentives administered across all government levels, he said.

And if SMEs are appropriately resourced for change, they could reap benefits by producing less waste and using less energy - gaining cost savings and marketplace advantage.

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