Profits and perils in green business

Most Australian business owners and executives see the need to reduce their business’s carbon emissions but are yet to begin taking action in big numbers, a new report has found.

According to PricewaterhouseCooper’s Carbon Countdown survey, while 80% of business leaders believe the business community needs to take an active role in responding to climate change, just 22% have taken action such as implementing new internal policies and procedures.

PWC climate services director Sean Lucy says the survey suggests Australian businesses are still processing the masses of information available about climate change.

“Organisations tend to become aware of the need to do something, then they think about it and then take action, so it’s a sign of where the business community is at in that cycle. They know there is a need for change and perhaps they are now looking for examples they can follow and who is leading the way,” Lucy says.

The need for leadership and more information on how to address climate change is another key finding of the survey, with many respondents suggesting they would like to see more government action on the issue.

Businesses are not waiting to take action where there is consumer demand for greater environmental sensitivity, however.

Lucy says one in four business leaders said they were responding to customer demand for more green services and products.

“We’re following the UK, where the trend for environmentally friendly products is most advanced, and now we’re seeing big retail players heading in that direction,” Lucy says.

The rush to pick up on growing customer demand for green goods and services is so significant that it may be leading some businesses to exaggerate their environmental claims for their products.

The Australian Competition and Consumer Commission has recently successfully prosecuted three businesses for misleading consumers about the low carbon emission status of their products and is now conducting an inquiry into the issue.

ACCC chairman Graeme Samuel says the premium consumers are prepared to pay for green products has triggered the rapid emergence of businesses offering carbon-neutral goods or services.

“As always happens with a new market, you get claims being made and sometimes you get people making excessive claims,” Samuel told The Australian Financial Review. “I’d say it’s the beginning sign that businesses may be going a bit too far.”

Nick Bez, research director with green consumer research firm Mobium, says businesses that exaggerate their green credentials risk a customer backlash.

“Any business that chooses to take a green position in the market that is deceptive will find that consumers will react by punishing them for that behaviour,” Bez says. “Consumers want brands to stand for something. If that doesn’t stack up they will walk away.”