If 2007 was the year when international scientific consensus on
climate change became clear, 2008 is the year when it has become a
mainstream consumer issue.
The then Secretary of the Victorian Department of Environment
and Sustainability, Professor Lyndsay Neilson, announced more than
two years ago that government has moved beyond the debate about
global warming and is now concerned with developing appropriate
responses. Whilst debate continues in many circles, mainstream
business and academia has followed the same course, in response to
the weight of public opinion on this issue.
It is difficult to recall a subject that has entered the
mainstream of political, social and commercial thought with the
same impact and increasing momentum as has concern about the
consequences of climate change. Australians have the highest per
capita carbon footprint of any member of the OECD. Emissions are
increasing twice as fast as in the USA and Japan and up to 5 times
as fast as in Europe. This results largely from Australia's
unique geography and small population. Nonetheless, it requires an
urgent response and the Australian public is now demanding
leadership from its politicians, and is increasingly coming to
expect the same from the business community.
The methodology for achieving the broader aims of reduced
emissions remains the subject of vigorous and legitimate debate. In
recent times we have seen the release of the Garnaut Report and the
Federal Government's White Paper on Climate Change. It would
appear that some form of global trading in carbon credits is
destined to be adopted as the most appropriate response, although
the framework and detail of such a trading scheme is far from
The former Howard Government argued that adoption by Australia
of a levy (in the form of a carbon tax) on our carbon producers,
without a global commitment to the same regime, would place
Australia at a significant competitive disadvantage, and place an
unfair burden on our primary producers and heavy industry. By
extension, it is argued that individual businesses may suffer
financially if they elect to adopt potentially costly environmental
For businesses that compete internationally, the consequences
may indeed be significant. However, for businesses competing in the
domestic market, there is a legitimate body of opinion suggesting
that recognition of sustainability will confer economic and
financial benefits on a business. Factors supporting this view
include the following:
The Australian public now demonstrates a high level of concern
for the effects of climate change (stemming immediately from
concerns about the adequacy of our water supplies.) To the extent
that they are consumers and customers, the public is increasingly
inclined to differentiate in favour of businesses demonstrating a
level of social concern and responsibility.
The demographics of public opinion on this issue indicate that
Generations X and Y have the strongest level of interest in and
concern about environmental factors. Most of our current employees
and virtually all of our future employees will fall within those
demographic bands. To that extent, "green" businesses may
become the employer of choice in the increasingly competitive
market for skilled labour.
Conversely, employee retention may improve in those businesses,
eliminating the massive and often underestimated costs of
recruitment and induction of new employees. It is generally
recognised that it costs between 50% and 100% of an employee's
annual salary to replace an employee. If the rate of a
company's staff turnover can be reduced by as little as 5%, the
resultant savings are likely to exceed the total cost of achieving
carbon neutrality. (Note that this will vary according to the size
and individual circumstances of each enterprise.)
Adoption of sustainability practices will create a cleaner and
more positive work environment, which may result in a direct and
material improvement in productivity.
Corporate branding opportunities may arise from the early
adoption of carbon neutral or other socially responsible
As with the Quality movement of the 1990s, many corporations
may refuse to deal with organisations that are not certified to be
Valuable networking opportunities can be favourably exploited
by businesses that become leaders rather than followers within
their own industry sectors.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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