Businesses are looking at the fundamentals of demand for green initiatives from customers as political debate rages on the best way to reduce Australia’s carbon emissions, with a new report finding that consumer demand outweighs tax incentives as a key driver to operate a more sustainable business.
Over 250 businesses across Australia were analysed by the Grant Thornton International Business Report (IBR), a survey which investigates privately held business attitudes toward sustainable practices and their motivations for considering greener alternatives.
82% of Australian privately held businesses have identified consumer demand for green goods and services as a core reason for making their business more environmentally -friendly
Over 90% of respondents reporting that environmental credentials had no impact on whether they had won or lost customers over the past 12 months.
Although greater tax incentives to invest in R&D for the development of low carbo products or services (77%) and rising energy bills (71%) are considered key motivators, a high proportion of respondents still pointed to tenders demanding greener suppliers (69%) as a key factor in operating a more environmentally-friendly company.
Tony Markwell, National Head of Privately Held Business at Grant Thornton Australia, remarked:
“From the data we can see that the core challenge that our country faces is the lack of consumer pressure to encourage a change in business practices. However, there is still a responsibility on the part of business to account for their environmental impact and make the necessary changes to reduce this – the extent to which business can viably make these changes though will greatly depend on the policies proposed.”
In responding to the question “What would encourage you to operate a more environmentally-friendly/sustainable business?” businesses highlighted the following reasons for going green:
- Consumer demand for green goods and services – 82%
- Tax incentives to invest in R&D around developing low carbon products and services – 77%
- Rising energy bills – 71%
- Tenders from clients demanding greener suppliers – 69%
- Greater tax incentives for installing renewable energy sources – 68%
- Tax incentives to invest in energy-efficient equipment/technology – 53%
- Free energy audits and expert advice – 10%
- Just not a priority in the current downturn – 4%