Small Business Sustainability Overcoming the Barriers

Transcription

1 Small Business Sustainability Overcoming the Barriers July 2012 Helena Wright Centre for Environmental Policy Imperial College London

2 Small Business Sustainability Overcoming the Barriers Overview: Go Green Plus Lessons Learnt and Challenges Case Study Examples Recession Barrier and Opportunities How can the barriers be overcome?

3 Small Business Sustainability Source:

4 Small Business Sustainability Why is this important? 99% of all UK businesses are SME s (small and medium sized enterprises) <250 employees SMEs produce 110 million tonnes of CO2 per year Account for 20% of total UK GHG emissions SMEs have greater saving potential than larger organisations (MNCs) Globalised supply chains Source: Defra, BIS, Carbon Trust

5 SME share of employment within each industry in the UK (2011) Share of employment within SME s Source:

6 Small Business Sustainability Rising energy costs Policy/Regulation Supply chain Consumer demand Awareness Savings Push factors Pull factors Barriers: Lack of information/resources/support

7 Small Business Sustainability Drivers: Increased awareness Rising energy prices Economic benefits of eco-efficiency Regulatory pressure Commercial pressure Economic Barriers: Recession lack of access to capital Lack of expertise/eco-literacy Inconsistent policy drivers Lack of time or resources Social Environmental Sources: Revell and Blackburn, 2005; Seidel et al, 2008

8 Go Green Plus Project Funded by Delivered by

9 Included: Go Green Business Support Calculations On-site audit Monitoring, assessment & feedback Action Plan 12 hours support tailored to suit the needs of the business

10 12 hours of support covers Environmental Policy Energy Water Legal Compliance Waste Reduction & Recycling Procurement Transport

11 Case Study: Energy Bills Case Study: Business with large heater; highly inefficient & lack of information Sunk costs Thin metal factory roof Hourly energy costs one of the businesses highest expenditures Not able to access credit to replace inefficient equipment or to insulate

12 Access to Credit Some facts: 15% of SME firms were rejected outright for a loan in 2008 Lenders have become more risk averse and less likely to lend to businesses without collateral or those in an industry considered risky Only 27% of firms previously rejected for term loans found alternative funding Source: Warwick University

13 Recession as a Barrier? SME are more credit-constrained Cash flow is a challenge Reducing staff Yet: Innovation in the face of adversity Driver for efficiency New business models and entrepreneurship

14 Case Study: Lack of Information Overview: Replacing old equipment Not looking for efficient replacements Asymmetric information; e.g. Landlord-tenant problems Need for public regulation

15 Case Study: Policy Constraints Eco-aware security firm aimed for carbon neutrality Solar PV Panels: policy fluctuations Planning permissions and regulatory hurdles Missing information

16 Lack of Top Level Support Overview: Staff changes: need a Green Champion /EMS or ISO14001 Different management styles Staff engagement Economic benefits need to be clear

17 Going Green: Business Case Quick Wins / No regrets: Medium term measures: Longer payback measures: E.g. Lights/insulation, energy monitoring, recycling, radiator valves, plug timers, printing double-sided E.g. Transport, equipment E.g. Renewable energy

18 Quick Wins: Lighting Putting Passive Infrared (PIR) Sensors on corridors, basements or bathrooms can save up to 60% on lighting costs. Cost: 6-10 Savings: 100 s

19 Switch off Campaign Businesses switch off campaign: can save 10-20% of energy costs (Carbon Trust) Reducing the thermostat by 1 degree can save up to 10% on the energy bill

20 Energy efficient lighting LEDs

21 Annual running cost of light bulbs* 50 Halogen bulbs 50W vs 50 LED High Power 6W (equivalent to 50W) Annual Energy Consumption: 6260kWh Annual CO 2 emission: 2.7 tonnes Number of bulbs replaced yearly: 63 Annual Running Cost: 967 Annual Energy Consumption: 751 kwh Annual CO 2 emission: 0.3 tonnes Number of bulbs replaced yearly: 2.5 Annual Running Cost: 139 A 828 Annual Electricity Bill Saving - 86% saving * Lights on: 8 hours/day, 6 days/week - Average Cost/kWh: 13p

22 LED tubes and T5 tubes

23 Annual running cost of tube lamps* 50 T8 tubes 5ft - 110W vs 50 T5 tubes 5ft 35W (same output) Annual Energy Consumption:13772 kwh Annual CO 2 emission: 7 tonnes Number of bulbs replaced yearly: 0.3 Annual Running Cost: 1831 Annual Energy Consumption: 4382 kwh Annual CO 2 emission: 2 tonnes Number of bulbs replaced yearly: 0 Annual Running Cost: 570 A 1262 Annual Electricity Bill Saving - 69% saving * Lights on: 8 hours/day, 6 days/week - Average Cost/kWh: 13p

24 Sustainability Strategy Impacts Tangible Assets: Equipment, land, resources, facilities Stock/Produce and services Intangible Assets: Branding, reputation and goodwill Marketing, winning tenders Expenditures: (P&L) Energy (gas and electricity) Water, waste, and transport

25 Trends and Common Issues High Street and Retail Particularly lighting, waste, transport and delivery Leisure and Beauty Water as a key resource, natural products Manufacturing Energy-intensive processes Heated warehouses Office buildings Computing, lighting, heating, waste Food Industry Waste, energy, local sourcing

26 Assessing the Value of Sustainability Source: Hart and Milstead, 2003

27 Case Study: Life Cycle Thinking SMEs in the Supply Chain: A whole system approach Suppliers/Producers Sustainability in Design, minimising use of raw materials Middle Transportation and Processing End Users/Buyers Waste and re-use at consumer level SMEs as buyers

28 Case Study: Hotel Rafayel 5-Star Hotel, Battersea Achievements: 18,000 savings on LED lighting 12 x E-Cube devices fitted 79 tonnes of CO2 Saved annually Awarded Best Green Business Award

29 Lighting savings: Go Green Plus Average from sample of 58 businesses Average size: 12 employees (~700 employees total) Just lighting: Average Potential Savings Average Payback Period (in years) 1,171 potential saving per year on lighting 1.27 years Average Potential Tonnes of CO2e saved Average 4.78 tonnes of CO2 per year could be saved Saving potential per tonne + 245

30 Scaled Up Lighting Savings 1,171 potential bill saving per SME through efficient lighting 4.5m small businesses in UK (Source: BIS.gov) UK businesses could save around 5.3 Billion per year Savings can be re-invested and create jobs Value of Green Deal initiatives

31 Water Usage in Small Businesses Source: South Staffs Water

32 Waste and Recycling Drivers: Economic & Policy drivers (Landfill tax = 64/tonne) Widely accepted amongst staff. Barriers: Time/space constraints for separation of waste Lack of coordination in shared premises. Presence of unfair contracts from rogue waste companies; need legal reform to protect small businesses.

33 Successes Case Studies further highlights: Putney Wharf annual savings of 6,000 from LED bulbs and other initiatives to save water and recycle Look In Video efficient lighting reportedly also increased number of customers visiting the store Westoz Construction recycling timber; diverting an estimated 70 tonnes of waste from landfill each year which saved more than 14,000 p.a in waste disposal costs

34 Carbon Reduction Data: Go Green Plus Grid Electricity Natural Gas LPG Fuel Oil Diesel Petrol Other

35 Emerging Innovations Cloud computing Paperless offices Video conferencing Digital marketing Cycle to work schemes

36 Summary: Overcoming Barriers Regulatory support and consistency Access to financial support / loans Support services for small businesses Opportunities in the supply chain: MNC/Public Procurement Awareness of financial benefits

37 Further Reading Carbon Trust Green your Business for Growth Guide Energy Saving Trust trust.org.uk Merton Chamber Cafe Direct EcoToolkit -

38 THANK YOU Helena Wright Centre for Environmental Policy Imperial College London Ecopia