A survey released today shows the Federal Government needs to more actively engage with Australian companies - particularly small and medium sized enterprises - about the emissions trading scheme (ETS) to help protect jobs and profits.

The survey by the Australian Institute of Management Victoria and Tasmania (AIM VT) reveals that SMEs - the ‘engine room’ of the Australian economy - are largely unprepared for the flow-on impact of the ETS. (SMEs are defined as those employing less than 200 people). 

Only 20 per cent of SME survey participants said their companies had started planning for the introduction of the ETS. Survey respondents employed with large companies indicated a higher level of ETS preparedness - 47 per cent said planning was underway.

“The alarmingly low level of business planning for the ETS means this week’s decision by Government to push back the introduction of the scheme to 2011 will provide much needed additional time for consultation,” the CEO of AIM VT, Ms Susan Heron said.

“The implementation of the ETS will be one of the most significant challenges for Australian business since World War II. The carbon price and cap nature of the scheme will ensure it impacts on almost every aspect of a company’s operations.”

A total of 570 top level business people - CEOs, company owners, senior managers and board members were involved in the survey. Participants were evenly represented from a cross-section of Australian industry. The survey, conducted by AIM VT in April, followed the organisation’s previous ETS business survey in June last year.

Thirty-two per cent of survey respondents said they had ‘little or no understanding’ of the size of their company’s carbon footprint.

Sixty-three per cent of respondents, when asked how the ETS would impact on their company, said it would increase costs – up from 39 per cent of respondents in the 2008 survey. The number of people who said the scheme would reduce profitability doubled to 32 per cent (16 per cent in 2008). Just 19 per cent of respondents said the scheme would provide a market advantage for their companies (12 per cent in 2008).

“Major polluters will be the initial targets of an ETS, but the flow-on effects of the scheme’s carbon reporting requirements will quickly hit SMEs – particularly those which supply to large organisations,” Ms Heron said.

“SMEs should start thinking of themselves as part of the carbon footprint of the companies they supply to. Already, some major companies are working on sustainable supply chain practices.

“It is clear that some companies will have to demonstrate higher levels of ETS readiness to maximise the prospects of a smooth transition to the new scheme and to take advantage of any business opportunities that arise.

“A pointer to the communication challenges facing Government is our survey’s finding that 88 per cent of respondents believe the Government’s initial draft ETS legislation lacked ‘clarity’.”

The Australian Institute of Management is the nation’s major provider of management development, executive insight and research. It is an independent, not for profit organisation with more than 28,000 professional members and more than 5,000 corporate partners across Australia. The Institute is a federated organisation with each state managing its own operations.

News media contact details for the Australian Institute of Management Victoria and Tasmania are:

Leigh Funston Head, Stakeholder Relations Australian Institute of Management Victoria and Tasmania 181 Fitzroy St, St Kilda Victoria 3182 T 61 3 9534 8181 M 0414 866 697 F 61 3 9534 5050 W www.aimvic.com.au E lfunston@aimvic.com.au