How will Small to Medium Business cope with the Emission Trading Scheme?
The Australian Institute of Management issued the warning that small and medium businesses will be “seriously disadvantaged” if they expect to avoid the impact of the Federal Government’s emissions trading scheme. after the release of the Government’s green paper on its carbon pollution reduction scheme.
The institute said many small and medium enterprises (SME’s) had been misled by the green paper, which says the scheme will cover only 1000 of Australia’s 7.6 million registered businesses.
All SMEs will soon feel the flow-on impact of the new scheme and their managers need to be ready for it,” she said. Already, some of Australia’s major companies have placed strict environmental requirements on their supplier organisations under the banner of ’sustainable supply chain management’. The SMEs that have verifiable sustainability measures, supported by the right organisational structure and culture, will be best placed to meet the marketplace realities of the new scheme.”
In May Westpac announced it had set up a sustainable supply chain code of management to bring the businesses it dealt with into line with its thinking on responsible business practice.
Gemma White, program manager of VECCI’s (Victorian Employers Chamber of Commerce and Industry)“Grow me the money” has just returned from a conference in London on greening supply chains. “The large companies that attended like Nestle and Coca-Cola want to green their supply chain. They are looking at their own environmental performance and now they are looking outside their own companies to that of their suppliers, and putting pressure on them. Most multinationals are moving in this direction.”
She says they are looking at their agricultural suppliers then they will move onto other suppliers. “Companies headquartered in Europe for example are moving very quickly on this because there are more regulations there.” The big problem is that every organisation wants the reports in a different format and there is a need for tools to be developed that can standardise measurements.
White says that they have not had any SMEs report that they are being pressured by suppliers to measure their carbon footprint. “It is a perceived pressure. They expect it to happen and want to be proactive,” she says.
Jonathan Jutsen, executive director of consultancy Energetics, says some financial institutions are asking for Life Cycle Analysis reports from their suppliers.
Retailers increasingly interested in the environmental footprints of their suppliers. “For example retailers in Britain are looking at carbon labelling and “carbon miles” are talked about a lot in the UK. This is a real problem for long distance exporters. Woolworths is looking at the feasibility and benefits of carbon labelling and Tesco is a long way down the track.”
Ikea has done some work on its total emission footprint, which also includes the impact of customers coming to their stores. For example it has done a lot of work on ensuring people can catch public transport for its new stores. “Ikea is also looking at delivery options to reduce carbon emissions.
There could be many benefits from being an early adapter, including the satisfaction of doing your bit for the environment. But I have previously discussed “greenwash” and the need to be careful you cannot make claims you cannot substantiate.
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