Environmental Sustainability and Industry Road to a sustainable future Findings of the National Survey on Environmental Sustainable Practices September 2007 Environmental Sustainability and Industry Road to a sustainable future… Road to a sustainable future 2 Road to a sustainable future 2 © e Australian Industry Group, 2007 e copyright in this work is owned by the publisher, e Australian Industry Group, 51 Walker Street, North Sydney NSW 2060. All rights reserved. No part of this work covered by copyright may be reproduced or copied in any form or by any means (graphic, electronic or mechanical) without the written permission of the publisher. ISBN 0 9756763 9 3 Cover printed on Revive Silk 250gsm and consists of: 30% de-inked post consumer waste, 10% mill broke, 30% FSC bre minimum, 30% virgin bre. Inside pages printed on Revive Silk 130gsm, the only 100% Australian made recycled coated paper. 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Road to a sustainable future Environmental Sustainability and Industry Road to a sustainable future Findings of the National Survey on Environmental Sustainable Practices Environmental Sustainability and Industry Road to a sustainable future… Road to a sustainable future 4 Preface Better practices are emerging in industry… Road to a sustainable future 5 In October 2006, Sir Nicholas Stern released a ground breaking review that identied climate change as the greatest and widest-ranging market failure ever seen. e review concluded that the benets of strong early action through carbon pricing, technology policy and energy eciency will considerably outweigh the costs. is conclusion was supported by the Australian Business Roundtable on Climate Change’s report, e Business Case For Early Action, which showed that it is possible for Australia to deliver signicant reductions in greenhouse gas emissions at an aordable cost, whilst maintaining strong economic growth. For businesses to manage climate change, we need to maintain the ow of quality research and practical information, helping them adapt while simultaneously improving their competitiveness. e National Survey of Environmental Sustainable Practices and Industry is so signicant because it provides us all with an insight into where Australia’s business community is today, what actions businesses are already taking, and what opportunities exist. Sustainability Victoria is proud to be associated with the largest Australian survey of environmental practices by industry. e research was conducted with the Australian Industry Group and had participation from over 800 businesses across Australia. e results of the survey have been captured in the report, Environmental Sustainability and Industry, Road to a Sustainable Future. e report looks at how industry can lower greenhouse gas emissions while still maintaining a competitive edge. Not surprisingly the report reveals most companies are unsure about the implications of climate change on their bottom line; yet optimistically see climate change as an opportunity to promote their commitment to social responsibility while improving their energy eciency and save on costs. Alarmingly, only a 10% of companies said they were informed enough to manage risks associated with climate change. At Sustainability Victoria we are constantly asked what people, whether it be community, government or industry, can do to lower greenhouse gas emissions. is report can help industry understand what actions can be taken to make an impact to reduce carbon emissions. e report is a stepping stone for those organisations that accept the responsibility to contribute to the reduction of carbon emissions - I urge every business to read it. Geo Mabbett Chief Executive Ocer, Sustainability Victoria Climate change and its implications for Australia is a key policy and national priority. It is also a central issue for business as it tries to grapple with the challenge of lowering greenhouse gas emissions whilst remaining globally competitive. Despite the attention being given to this issue by government, media and the community, there has been little research into environment management practices by industry. Environmental Sustainability and Industry, Road to a Sustainable Future is the largest study undertaken of industry practice in Australia. It reports on activity of over 800 manufacturers and commercial constructors, with a total turnover of around $41 billion, representing 10.5% of all activity within the two sectors. e report shows that Australian industry is at the beginning of its journey towards environmental sustainability. Companies are deeply concerned about lowering greenhouse emissions, and are taking steps to reduce their consumption of electricity, gas, water and waste. Industry shares with the wider community an understanding of its obligation to be socially responsible, even if it involves some additional costs. As the report highlights, there are many opportunities for companies to lower costs and improve competitiveness, by adopting environmentally sustainable practices. But there are other cost considerations, and we need to be mindful of their implications for industry competitiveness. Companies clearly need more information on how they can improve sustainable practices, they need a better understanding of an emissions trading scheme, and they need better incentives, particularly for small to medium rms. I would like to thank Sustainability Victoria for its support to Ai Group in completing this important study. I hope it will prompt more businesses to take the journey on the road to environmental sustainability. Heather Ridout Chief Executive Australian Industry Group Environmental Sustainability and Industry Road to a sustainable future… Road to a sustainable future 6 PREFACE 5 EXECUTIVE SUMMARY Environmental sustainability and industry 11 THE STUDY Environmental sustainability and industry 15 Details of companies in the study 16 MANAGEMENT ATTITUDES Risks from climate change 19 Business opportunities from climate change 20 Balance of risks and opportunities from climate change 21 Understanding of environment issues 22 Most critical environment management priority 23 Perceived responsibility to reduce carbon emissions 24 Understanding of an emissions trading scheme (ETS) 25 Support for an emissions trading scheme 26 MANAGEMENT PRACTICE Sta with some responsibility for environment matters 29 Awareness of greenhouses gases 30 Measures adopted to lower greenhouse gases 31 Environment management systems 32 Reporting on environment performance 33 Auditing and benchmarking of energy consumption 34 Use of government grants to support environment activities 35 ELECTRICITY AND GAS Introduction 39 Importance of electricity 40 Variation in electricity cost by sector 41 Cost savings on electricity use 42 Importance of gas 43 Cost savings on gas 44 WATER AND TRADE WASTE Importance of water 47 Obligation to lower water usage 48 Most critical water saving priority 49 Water management practices 50 Cost savings on water use 51 Recycling of water 52 SOLID WASTE Importance of solid waste 55 Recycling of solid waste 56 Cost savings on solid wastes 57 PRODUCT DESIGN Recyclability of products sold 61 Product design and suppliers 62 SURVEY QUESTIONNAIRE 66 Contents Road to a sustainable future 7 Environmental Sustainability and Industry Road to a sustainable future… Road to a sustainable future 8 Road to a sustainable future Executive Summary Environmental Sustainability and Industry Road to a sustainable future… Road to a sustainable future 10 [...]... formally and 15% informally The Study Road to a sustainable future 14 Environmental Sustainability and Industry Road to a sustainable future… Road to a sustainable future 15 Environmental sustainability and industry The largest survey undertaken of environment practices by Australian industry Background n n n n n n n n The efficient management of finite resources and the reduction of the environmental. ..11 Environmental sustainability and industry Road to a sustainable future… The study Management practice 1 The Australian Industry Group in conjunction with Sustainability Victoria has completed the largest survey of environmental practices by Australian industry 12 Significant resources are being allocated to environmental issues Over 1,300 staff and consultants were identified... factory floor 3 The overall objective of the study was to understand and document business environmental performance It examines management attitudes and practice with respect to environmental sustainability; the levels of consumption of electricity, gas and water and the efforts made by companies to lower usage; as well as waste management and product design Management attitudes 4 Businesses regard the... with that of continuing to grow and remain globally competitive The debate over a national emissions trading scheme, which State and Federal Governments have committed to introduce, has also heightened attention on industry s role Despite the importance of the issue, there has been little work done to understand and document industry practice in regard to environmental sustainability In order to better... understand and document industry environment performance It includes a mixture of data relating to the culture and opinions of industry on climate change, as well as data on management practices The study gives particular attention to companies understanding of an emissions trading scheme The significance of companies level of reliance on resource inputs is gathered through data on electricity, gas and. .. Vic Road to a sustainable future Qld SA Over half (54%) of the respondents were companies in Victoria, with a further 24% from NSW, and the remainder from Queensland and South Australia Management Attitudes Road to a sustainable future 18 Environmental Sustainability and Industry Road to a sustainable future… Road to a sustainable future 19 Risks from climate change Climate change is a high market risk... firms n Understanding by state A fundamental starting point for moving towards environmental sustainability in any business is acquiring of good understanding of key issues relevant to business practice This study sought information on company understanding of a range of broad issues relating to climate change: an emissions trading scheme, government programs and regulations, recycling and the impact... firms and 37% for medium firms 16 About 14% of companies report their environmental performance to the community, with 60% of large firms doing so 17 Over one in every two firms had undertaken audits on electricity and other resources over the last three years 18 The vast majority of activity on environmental sustainability has been undertaken by companies using their own funding Electricity and gas... human activity is increasingly key to business decision-making Climate change and its implications for Australian industry has emerged in recent years as a major policy issue affecting the states and nation overall As households are being asked to reduce their consumption of electricity, gas and water, so too is industry For industry, responding to the challenges of climate change involves balancing... appliances when not in use Installing energy efficient globes Installing skylights and improved lighting systems Power factor correction Putting time clocks on heaters Acquiring more efficient equipment and plant Moving to a more eco-efficient site Exploring installation of co-generation plant 12 Environmental sustainability and industry Road to a sustainable future… use was achieved in 2005/6 In the following . Environmental Sustainability and Industry Road to a sustainable future Findings of the National Survey on Environmental Sustainable Practices September 2007 Environmental Sustainability and. a sustainable future 6 PREFACE 5 EXECUTIVE SUMMARY Environmental sustainability and industry 11 THE STUDY Environmental sustainability and industry 15 Details of companies in the study 16 MANAGEMENT. to take the journey on the road to environmental sustainability. Heather Ridout Chief Executive Australian Industry Group Environmental Sustainability and Industry Road to a sustainable future… Road