Education, support needed for climate-concerned SMEs

A new survey by MYOB, has revealed a significant proportion of local businesses are concerned about the impact of climate change.

While the majority are acting to minimise their carbon outputs, support and education is needed to help more SMEs do the same.

The latest MYOB SME Snapshot found that overall, more than eight-in-10 (82 percent) of SMEs are concerned about the impact of climate change, with 43 percent very or extremely concerned. In contrast, 18 percent of SMEs polled said they are not concerned about climate change.

Building on this concern, two thirds of SMEs said they believe New Zealand businesses have a responsibility and therefore should play a larger role in helping to mitigate climate change, while nearly 19 percent said New Zealand businesses do not have a responsibility in helping to mitigate climate change.

MYOB Head of Go-To-Market Jo Tozer (pictured below) says despite the pandemic being their key concern over the last two years, New Zealand business owners are clearly worried about climate change and what it might mean for the country and the economy in the long term.

“We’ve seen massive disruption over the last two years, and that has perhaps prompted some of our SMEs to consider the looming challenge we face in mitigating the risk of climate change,” says Jo. “It is heartening though that, while many may only be on the start of their climate action journey, local businesses are keen to step up in the face of this particular issue.”

SMEs taking action, but appetite for more

Nearly half (48 percent) of local SMEs polled by MYOB currently have processes or systems in place to minimise their business’s carbon footprint and/or improve sustainability. When asked what actions they are currently doing to help mitigate climate change, the top five responses from this group included:

• 70% minimise the use of resources that are single use (e.g. reduced printing where possible, no single-use cups/cutlery allowed on premise)
• 62% operate a waste management and/or composting service (incl. recycling, rubbish and organic waste bins)
• 49% only use the energy that they need in the office (e.g. the lights go off if no one is in the room)
• 33% have staff work from home at least one day per week – reducing travel emissions
• 24% operate a local supply chain – they have zero or very limited overseas carbon footprint.

“While local SMEs are already taking positive steps to help mitigate climate change in the workplace, our Snapshot found that more than a third (35 percent) of SMEs think their business could do more to reduce its effect on climate change and there are still a number of small businesses who have no processes in place to improve sustainability at all,” says Jo.

“Given the challenges SMEs have faced over the past couple of years, survival, maintaining a steady cashflow, and navigating COVID-19 curve balls have of course been the top priorities recently. However, as we kick off a new year, now is a good time for local businesses to also consider how new ways of working or operating model changes could impact their carbon footprint and shape their sustainability plans.”  

When it comes to measuring the success of their workplace initiatives, however, the Snapshot highlighted that most SMEs need some help. More than two thirds (69 percent) of respondents said they didn’t know how to measure their business’s carbon footprint/impact, while 21 percent did, and ten percent of respondents said they were unsure.

Overall, however, nearly a third (32 percent) of SMEs polled said their business is not carbon zero or carbon neutral, but they are aiming to be. One fifth of SMEs said their business is already carbon neutral or carbon zero, while 16 percent said they have no desire to be at this stage. Thirty-two percent were unsure.

Barriers to doing more

Slightly less than the proportion of SMEs taking action, MYOB’s SME Snapshot revealed that more than two-in-five (43 percent) of SMEs do not have any systems or processes in place to minimise their carbon footprint and/or improve sustainability.

When asked what is stopping them from implementing any or more sustainable or climate-friendly initiatives into their business (option to select more than one answer*) nearly a quarter of SMEs polled (23 percent) said they feel they haven’t found the right sustainable or climate-friendly initiatives for their business, while 16 percent said they don’t know where to begin. Other key factors that SMEs said were hindering any or more action in this space, included cost, lack of free time and a lack of information*.

“From staying up-to-date with industry trends, COVID-19 compliance and managing the business, SMEs have had a lot on their plate, and finding the most suitable sustainability actions and initiatives for their business can require a decent time investment,” Jo explains.

“As a starting point, businesses could start by having conversations with their employees to brainstorm new sustainable or climate-friendly initiatives within the business, or if budget permits, bringing in external resource to assess where the business can implement new sustainable practices could be a good way to create change.”

Chartered Accountants Australia and New Zealand (CA ANZ) Business Reform Leader, Karen McWilliams, explains: “As the MYOB survey shows, SMEs are stretched for time and resource when it comes to implementing sustainability practices, but they can’t afford to miss the boat on this.

“Larger organisations with sustainability requirements are likely to give preference to sustainable SMEs in their supply chain, and consumers are increasingly demanding sustainable products. A recent Colmar Brunton poll revealed almost half of New Zealanders say they have switched to brands that are more sustainable.”

Opportunity for climate assistance

When asked what initiatives would be most helpful for their business to allow it to become more climate-friendly or sustainable, 44 percent of SME owners or decision makers said they would like funding/tax incentives from the Government for climate initiatives for small business, while 38 percent said more guidance from the Government on what their business can do or implement would be most helpful.

Meanwhile, 32 percent of SMEs would like subsidies for using cleaner, renewable energy, and 28 percent said time with a professional who can give advice on how to make their business more climate-friendly or sustainable would be helpful for their business.

“Local SMEs are calling for Government support that will help them easily identify and implement new sustainable practices, and with Finance Minister Grant Robertson announcing last December that Budget 2022 is set to outline further investment around climate change, many will be hoping more support is on the way,” says Jo.

“In the meantime, there is a range of resources and expertise that SMEs could look into in preparation for making changes within their business. From the Government’s Climate Action Toolbox, to the Energy Efficiency & Conservation Authority (EECA), or organisations like Toitū Envirocare – all would offer a helpful start for businesses looking for opportunities to take action,” says Jo.

CA ANZ’s Karen McWilliam, adds: “As trusted advisors to small business, chartered accountants can promote sustainability by helping to measure non-financial performance risks and opportunities, and navigate the maze of reporting networks. This is something we’ve covered in our recent sustainability playbook for small to medium enterprises and practices.”

The latest SME Snapshot insights on climate change build on news from MYOB late last year, announcing a new partnership with GreenCollar – Australia’s largest environmental markets project developer and investor. A continuation of MYOB’s workplace sustainability program and following a 2019 carbon usage audit across MYOB’s Australian and New Zealand offices, the partnership sees carbon emissions from MYOB’s Australian and New Zealand operations offset by locally generated ACCUs sourced from a selection of GreenCollar’s nature-based projects, including native vegetation regeneration and protection projects.