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Attitudes and Perceptions of Small Firms to the Environment and Sustainability
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Small firms and the environment
Factors that influence small and medium-sized enterprises’ environmental behaviour*
Ann Smith, Robert Kemp and Charles Duff
Since the Earth Summit held in Rio de Janeiro in 1992, the role of business and industry in achieving sustainable development has increasingly become the focus of attention of policy-makers throughout the world. Business and industry are seen to be the cause of, and an important part of the solution to, environmental problems. Indeed, Agenda 21, the action plan produced as a result of the Earth Summit, emphasises the importance of involving business and industry, workers and trade unions in sustainable development.
The EU has been an important driver for the promotion of sustainable development and the Single European Act and the Fifth Environmental Action Programme, Towards Sustainability, require environmental considerations to be incorporated into all EU policy. Recent EU initiatives such as eco-taxes, the EU eco-labelling scheme and the Eco-Management and Audit Scheme (EMAS) have complemented the more traditional ‘command-and-control’ approach of environmental legislation with economic drivers, voluntary and industry-led approaches.
Small firms make up a high proportion (99%) of businesses in the UK, they employ more than half the workforce (58%) and they make a significant contribution to the gross domestic product (Smith and Kemp 1998). Collectively, small and medium-sized enterprises (SMEs) are claimed to be the source of around 70% of environmental pollution (Hillary 1995). Although environmental legislation has been increasing year on year since the 1970s, it is only since the early 1990s that pressure to improve environmental performance has focused on SMEs. As a result, many initiatives have been introduced to assist small firms to improve their environmental performance and take up new environmental technologies (CEC 1989).
Much of the funding available through EU initiatives to improve the environmental performance of SMEs has been accessed by business-support organisations such as Business Links, Training and Enterprise Councils (TECs), Groundwork, business environmental associations and academic institutions. These organisations offer a variety of services to SMEs ranging from environmental awareness-raising seminars through more formal training to technical on-site support. The most successful projects have been waste minimisation schemes that demonstrate both cost savings and environmental improvement (CEST 1997, 1998). The Department of Trade and Industry (DTI) and the Department of the Environment, Transport and the Regions (DETR) have provided significant support for industry and business, seeking to improve their environmental performance through initiatives such as the Environmental Technology Best Practice Programme (ETBPP) and the Environment and Energy Awareness Programmes.
Although there have been a number of notable successes involving SMEs and environmental management (Smith and Kemp 1998; Sheldon 1998a; Robinson 1998), many of the EU and national funding programmes for SMEs are largely under-spent. For example, the Small Company Environmental and Energy Management Assistance Scheme (SCEEMAS), a UK government scheme that offered a grant of up to 40%–50% of the consultancy costs for SMEs to implement EMAS, has been withdrawn.
The difficulties in encouraging SMEs to take up free and highly subsidised opportunities of assistance to improve their environmental performance have been noted by a number of authors (BCC 1996a; Rowe and Hollingsworth 1996; Merritt 1998; Sheldon 1998b).
Based on the fundamental premise that improved environmental performance will lead to enhanced competitiveness, Groundwork commissioned Market Opinion Research International (MORI) to conduct a survey of small firms in the UK to identify the factors that influence their environmental behaviour (MORI 1998). The survey also sought to identify the organisations that have influence over small firms and to inform policy-makers and opinion-formers of the likely needs of their SME audiences. In other words, where might efforts best be directed to facilitate a greater uptake by small firms of activities to improve their environmental performance? This chapter provides an account of the research undertaken and considers the findings of the Groundwork survey—Small Firms and the Environment 1998—in the context of the so-called ‘intractable SME sector’ and environmental management.
Methodology
A questionnaire was designed jointly by MORI, Groundwork and the University of Hertfordshire to address the following key areas:
- The perceived role SMEs play in the national economy and the local environment
- Ratings of the environmental performance of respondents’ own companies, and benefits of improved ‘green’ performance
- Which support bodies or initiatives have been or would be contacted?
- Awareness of environmental legislation
- Registration/certification currently held or planned
- Costs associated with environmental issues
- Which types of organisation or individual have enquired about the environmental performance of respondents’ companies, and which might cause changes to practices?
- Preferred format for supply of environmental information
In order to check the flow, routing and wording of the questionnaire, a number of pilot interviews were conducted. No major changes to the questionnaire were required in light of the pilot study; however, a number of minor refinements were made.
Some questions were prompted in that they allowed the respondent to select an answer from a list of options provided. Other questions were unprompted and no ‘hints’ were provided. The results indicate where questions were prompted or unprompted.
Telephone interviews were conducted with 300 managers of SMEs (companies with fewer than 250 employees) between 17 February and 17 March 1998. All interviews were carried out by MORI In-Line Telephone Surveys Ltd, using computer-assisted telephone interviewing methodology. The interviews were conducted by telephone at the respondents’ place of work and there was only one interview per company. The respondents were the designated senior managers within each company, specifically responsible for dealing with environmental issues.
The companies were sampled from The Business Database’s corporate listings and, apart from industrial sector and company size, the selection of companies from the database was random (see Table 1). Non-commercial organisations were excluded.
The DTI Small Firms Statistical Unit (1993) stated that 94.4% of UK enterprises were ‘very small’ or ‘micro’ companies (1–9 employees), 5.1% were ‘small’ companies (10–99 employees) and 0.3% were ‘medium’ companies (100–249 employees). The sample profile did not match the national profile in that the proportion of ‘micro’ companies was under-represented and the small and medium-sized companies were over-represented (see Table 1).
Table 1: Sample Profile for the 1998 Survey
| Number |
| |
| Number of employees | |
| 1–9 | 76 |
| |
| 10–36 | 65 |
| |
| 37–49 | 41 |
| |
| 50-99 | 54 |
| |
| 100-249 | 64 |
| Turnover | |
| £0–£249,999 | 33 |
| |
| £250,000–£499,999 | 21 |
| |
| £500,000–£999,999 | 19 |
| |
| £1 million–$4.99 million | 89 |
| |
| £5 million and over | 73 |
| Market sector | |
| Manufacturing | 141 |
| |
| Construction | 14 |
| |
| Service [including transport, wholesale/dealing/retail] | 133 |
| Region | |
| East Anglia | 11 |
| |
| East Midlands | 21 |
| |
| Greater London | 27 |
| |
| North-East | 18 |
| |
| North-West | 35 |
| |
| Northern Ireland | 14 |
| |
| Scotland | 22 |
| |
| South-East | 49 |
| |
| South-West | 48 |
| |
| Wales | 7 |
| |
| West Midlands | 30 |
| |
| Yorkshire & Humberside | 18 |
All the results from the questionnaire are given in percentages. The figures are based on the full sample of 300 companies and are accurate to between ±3% and ±6%. Where the figures do not add up to 100%, this is due to computer rounding, multiple answers or the exclusion of ‘don’t know’ or refusal answer categories. An asterisk (*) represents a figure less than 0.5% but more than zero.
Results
The questionnaire results were used to analyse the level of awareness of respondents, the activities undertaken by their companies to mitigate environmental impacts and the sources of advice and training consulted.
SMEs’ perceived role in the national economy and the local environment
When asked what contribution SMEs in general make to the national economy, respondents perceived that their ...
