2013 Sustainability & Connecticut Business Survey
The Connecticut Business & Industry Association (CBIA), together with our sponsor UIL Holdings, Inc., is pleased to present the fourth in a series of surveys on corporate sustainability—businesses’ efforts to reduce waste and resource consumption without compromising on quality, competitiveness, or profitability.
The 2013 Sustainability and Connecticut Business Survey examines Connecticut businesses’ sustainability objectives, strategies for meeting those objectives, and the opportunities they present. It gauges Connecticut companies’ commitment to environmental principles in their business operations and the impact of those efforts on business performance, stakeholder relations, and communities served.
- Two-thirds of Connecticut businesses report they are engaged in sustainability practices. This is up from less than half (47%) in 2007, when we first surveyed companies—but down from 74% in 2010, when our last survey was conducted.
- Among companies engaged in sustainability, the strongest area of involvement is energy efficiency (90%). Waste management (77%) and green purchasing (74%) are also substantial areas of activity.
- Renewable energy is the area of greatest interest among businesses for future activities.
- Most businesses (84%) acknowledge they were motivated to adopt or expand green initiatives as a means of reducing operating costs. Cost, however, is also the main barrier to going green, cited by 65% of respondents.
- Though slightly more than half (53%) of the surveyed companies said current economic conditions have not changed their level of commitment to sustainable business practices, 11% said they stepped up their efforts, while 9% made green practices less of a priority. Eighteen percent said green business practices are part of their DNA.
- In their experience, most businesses (72%) find Connecticut’s environmental regulatory climate more restrictive than other states’.
- State and federal tax incentives and refunds for capital investment continue to be highly favored as a way of enabling more companies to integrate green strategies into their business models.
Sustainability: Part of Doing Business
In 2007, when CBIA first began tracking corporate sustainability, fewer than half of the companies surveyed (47%) were pursuing or engaged in sustainable business practices; today, sustainable enterprises form the majority (66%).
Businesses today also define sustainability beyond traditional criteria, such as recycling; they are incorporating green strategies throughout their value chain, from sourcing of raw materials to marketing and distribution of finished products and disposal of waste.
Among businesses that have gone green, the most common sustainable practices are these:
- Energy efficiency and energy conservation (90%)
- Green waste management, including waste stream reduction, recycling, and waste to energy (77%)
- Purchasing recycled materials and other environmentally responsible goods or services (74%)
- Water conservation (46%)
Greening the Supply Chain
Sixty-two percent of surveyed businesses adopted green business practices in the production and/or delivery of their products and services to others in the supply chain; 32% did so in the products and services they purchase or use from others in the supply chain.
Nearly one-third (32%) require that businesses in their supply chain—manufacturers, suppliers, distributors, and retailers—adopt green business practices; 28% say their own customers requested or stipulated they incorporate green business practices into their supply chain; and 9% have received similar requests from vendors.
Typical requests from vendors and customers center on reducing or eliminating waste—in particular, paper—and switching to recycled products. Following is a sample of actions that businesses identified as stemming from vendor and customer requests:
- Use recycled paper and shipping materials
- Cut down on snail mail
- Consolidate shipping
- Switch to electronic invoicing
- Provide reusable packaging
- Go paperless
- Manufacture products for LEED certified buildings
The Business Case for Going Green
Forty percent of businesses surveyed changed or diversified their own product line or service delivery to become more environmentally or socially responsible.
Of those, a significant share say the move resulted in better employee engagement (44%), happier customers (33%), and new customers (22%).
In fact, adopting green initiatives generally boosted businesses’ bottom line (43% of all respondents), employee morale (43%), public image (41%), and client/customer relationships (34%). Of those companies that have adopted sustainable initiatives, 81% say going green has been worth the time and investment.
Specific benefits identified in an open-ended question included the following:
- Better image
- More sales, profits
- More efficient communications
- Reduced energy costs
- Better customer engagement
- Higher employee engagement
- Reduced operating costs
- Decreased stormwater runoff
- Lower costs for trash removal
- Cost savings in packaging
- Income from recycling metals and plastics
- Increased market share
- Group pride in taking a leadership position
The period from 2007 (when the nation’s financial crisis was still brewing) until now was marked by a deep recession and sluggish recovery, with an economy widely described as “stuck in the mud.” In spite of (and perhaps in part because of) difficult economic conditions, many businesses maintained or strengthened their commitment to sustainability.
Slightly more than half said their commitment to sustainability did not change in light of the difficult economy, and 18% said it’s part of their DNA. More than one in ten (11%) said economic conditions pushed them to do more when it comes to sustainability.
However, 9% of businesses surveyed said economic conditions negatively impacted their green initiatives. Indeed, the percentage of surveyed companies engaged in sustainable business practices today (66%) represents a decline from highs of 73% in 2009 and 74% in 2010.
Market research suggests consumer pushback is part of the problem. With less money to spend, consumers are less willing to pay more for sustainably manufactured or delivered products and services.
A GfK Green Gauge survey of 2,000 U.S. consumers (released in September 2012) found that while 93% say they have personally changed their behavior to conserve energy in their household, there is a drop of five to 13 percentage points from 2008 in the share of consumers willing to pay more for products that are eco-friendly, renewably sourced, organic, recycled, or biodegradable.
“At a time of slow economic recovery,” GfK reports, “paying significantly more to be environmentally friendly simply doesn’t compute for most people.”
Not surprisingly, then, 20% of Connecticut companies we surveyed this year say the main obstacle to going green is lack of a clear business case for sustainability.
Barriers to Going Green
For most businesses (65%), the biggest roadblock to sustainability is cost.
Lack of resources (28%) and lack of knowledge regarding sustainable practices (23%) also were identified but are not nearly as problematic today as they were in 2007, when fully half of all respondents identified these as barriers.
The absence of company leadership on sustainability was also much more of an impediment in 2007 (cited by 20% of respondents) than it is in 2013 (1%).
For Connecticut businesses that benchmark the effectiveness of their sustainability efforts, common metrics include monitoring energy and water consumption and associated cost savings, calculating the company’s carbon footprint, comparing quantities of recycled versus nonrecycled waste produced, and participating in the Global Reporting Initiative for sustainability.
Most respondents whose companies engage in sustainable practices, however, acknowledge their businesses do not measure the effectiveness of those actions (71%) or are unsure if they do (8%).
In 2010, when we last conducted this survey, one in 10 Connecticut companies said greening their business changed their workforce needs; today, that number is only one in 20.
A combination of factors could account for the decline. Ostensibly, more companies today have workers in place with the experience to manage green initiatives.
On the other hand, a smaller share of companies today are engaged in sustainability, compared with three years ago.
Green skills in greatest demand today involve measurement, tracking, and metrics (40%); building operations and weatherization (38%); and green marketing (29%).
Areas for More Emphasis
The last three years saw a decline in the percentage of Connecticut businesses surveyed that are engaged in sustainability. Although a battered economy and a back-to-basics ethic are partly to blame, skepticism about the business value of sustainability persists.
Businesses need to be able to answer some fundamental questions: Will going green save or cost us money? Increase or decrease our profit margins? Grow or shrink our customer base? Business cannot manage what they can’t measure.
In addition, a considerable number of respondents indicated they don’t own their facilities and therefore have limited control over energy choices and other aspects of rented space.
Better communication with property owners, together with government incentives for commercial landlords to improve their building envelope, conserve energy and water, and manage waste, would help address these concerns.
Indeed, at a time when most companies are making do with less—fewer employees, tighter credit, smaller revenue streams—government tax incentives, rebates, and subsidized training could help reverse the downward trend in green business operations.
Most businesses we surveyed say they would take advantage of government incentives for going green: 70% would participate in federal incentives, and 74% would participate in state government incentives.
Tax incentives (74%) and refunds for capital investment (71%) were most strongly preferred, followed by competitive grants (37%), subsidized consulting services (31%), and subsidized training (23%).
Training and consulting services could also go a long way toward helping businesses clearly define goals and metrics and measure their ROI.
On a hopeful note, 69% of Connecticut companies plan to make sustainable business practices an essential component of their growth and investment.
Only 7% do not plan to do so, and the remaining 24%—operating in an uncertain economic climate—say they’ll wait and see.
The survey was emailed to an estimated 5,000 businesses across Connecticut from Earth Day, April 22, into early May 2013; 434 businesses participated, for a response rate of 9%.
The percentages quoted in this report relate to the number of respondents answering each question; thus the sample size for each question varies.
In addition, all figures are rounded to the nearest whole number and may not total 100%. The margin of error is +/- 4.8 %.
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