Many of the nation’s small and medium sized businesses will be forced to reduce their carbon emissions as the flow on impact of the carbon tax takes hold according to the findings of a major survey by the Australian Institute of Management VT.
The survey of business leaders and management personnel found that 58 per cent of participants believed that ‘major polluters will require their SME suppliers to limit their carbon emissions’. Support for this view was highest among CEOs and Board members (65% support).
“This research confirms that a lot of SMEs are in for a shock. SMEs can expect a growing number of the major organisations they supply to will require them to have systems and plans in place to measure and reduce their carbon emissions. SMEs need to be ready to meet that requirement,” said Susan Heron, the CEO of the Australian Institute of Management VT.
“What’s driving many corporations - and not just the major polluters - is that if they want to measure the real carbon footprint of their business operations they will need to know the carbon emission levels of the products and services delivered to them by their SME suppliers. Although this is not a formal reporting requirement of the tax to be introduced on July 1, it is emerging as a flow on consequence as major corporations seek to demonstrate their sustainability credentials to the general community.”
Of concern is that less than a quarter (23%) of those surveyed said their organisations were prepared for the ramifications of the carbon tax.
The survey, ‘Australia’s Carbon Tax’ attracted 936 participants across all industry sectors (including govt). Only 38 per cent of those surveyed said the introduction of the carbon tax was ‘justified’. Twenty two per cent of respondents were unsure on this point.
Sixty per cent of CEOs and Board members and 51 per cent of senior managers surveyed believe the carbon tax will have a negative impact on their organisations. ‘Increased costs’ and ‘reduced profitability’ were the two main negative factors of the tax according to survey participants.
Just 24 per cent of respondents consider the tax will benefit the economy. A further 27 per cent were undecided.
Of concern is less than a quarter (23%) of those surveyed said their organisations were prepared for the ramifications of the carbon tax. Those least prepared were SMEs employing 51-100 people where just 14 per cent said their organisations were ready. The situation was little better in organisations with over 5,000 people (31% ‘prepared’).
“Our survey reveals there is little support for scepticism about climate change with just 12 per cent of respondents, including only 3 per cent of CEOS and Board members saying they don’t believe in global warming or carbon reduction measures. This shows there is a high degree of goodwill in the business community to support initiatives to boost sustainability practices,” Ms Heron said.
“What’s needed is increased dialogue between Government and employers to reduce the fear and uncertainty that our survey shows has been generated by this tax.
“In turn, employers need to more effectively engage with their people on the ramifications of the tax to achieve greater understanding of the relevant issues and to develop innovative solutions to the problems being faced.
“The survey found that CEOs and lower level personnel have differing views on the tax’s impact. For example, 68 per cent of CEOs believe increased costs will flow from the carbon tax, yet just 42 per cent of team members support this view. Similarly, 35 per cent of CEOs say the tax will increase internal workload compared to 17 per cent of team members who believe that. Also, CEOs are more than twice as likely as team members to say the tax will reduce profitability – 50 per cent compared to 24 per cent.”
A surprise finding was that only three per cent of survey participants said they ‘trust’ political parties as ‘sources of information on carbon reduction mechanisms’.
For further information, please contact:
Leigh Funston AFAIM
Head, Stakeholder Relations
Australian Institute of Management VT, Melbourne
M: 0414 866 697
The Australian Institute of Management is the nation’s major provider of management development, executive insights and research services. AIM is a non-profit organisation with 25,000 Professional Members and 5,000 Corporate Partners across Australia.