Small businesses are taking small steps to become more environmentally friendly, according to the Small Business Index survey by Wells Fargo and Gallup. The majority said they are doing at least "everything that can be justified by cost.” However, 67 percent think their customers will not pay more for environmentally friendly goods and services. In April 2007, 49 percent thought customers would pay more.
Only 37 percent of respondents actively show their green credentials to customers, down from 47 percent in April 2007. The number one reason for showing their green credentials was "as part of a personal commitment or responsibility." The second reason was for public relations purposes, and the third reason was attracting customers.
One-third of the respondents said the current economic situation affected their plans to become more environmentally friendly. Seventeen percent said their companies are doing "very little or nothing at all"to become environmentally friendly.
There is good news. Over the last year, almost 90 percent participated in recycling, and over three-quarters (77 percent) switched to more environmentally friendly products. Thirty-two percent said they used some form of alternative transportation (other than a car).
Forty-five percent said they assessed how much energy their company uses. Sixty-eight percent switched to energy-saving appliances, light bulbs or vehicles. Forty-five percent percent believe specific actions can be taken by their company to improve environment.
The survey has been conducted for the last 23 quarters. The current survey was conducted on January 22-February 2. It was based on 604 small business owners across the U.S.
“Going green’ has been good for the environment, and even better for our bottom line,” said Marion Hook, owner of the AdobeRoseInn, a bed and breakfast in Tucson, Arizona. “We know that the money we’ll save long-term by making even small changes, such as using cisterns, florescent light bulbs and solar tubes, will far outweigh the short-term costs. We also find that our guests appreciate our efforts, and happy guests lead to repeat customers. ‘Going green’ is a part of a long-term strategy, and it will help keep our business financially sound, now and in the future.”
“At Wells Fargo we recognize the importance of integrating environmental responsibility into business practices and procedures,” said Marc Bernstein, head of Wells Fargo’s Business Direct lending and Small Business Segment. “We know that the contributions of small business owners are a vital part of the overall success of the economy, and in much the same way, we know their contributions can make a real difference in the state of the environment.”
Recent surveys indicate customers will pay for green products
Recent surveys indicate that customers are willing to pay more for environmentally friendly products and services. A Forester survey said 18 percent of customers would pay more for environmentally products, and recent Carbon Trust research said customers think its important to buy from environmentally responsible companies. In a Yahoo survey, 77 percent described themselves as green, and 57 percent said they made a green purchase in the past six months.
Four out of five respondents in an Opinion Research Survey said they are still buying green products and services despite the recession. In a 2009 Cone Consumer Environmental Survey, 34 percent said they are more likely to buy environmentally responsible products. Forty-four percent said their environmental shopping habits not changed much, and only eight percent said they are less likely to buy environmentally friendly products.
In a Consumer Electronics Association survey, 33 percent said they expect to make some type of green electronics purchage within next two years. Fifty-three percent said they would be willing to buy a television with green attributes, and 89 percent said energy efficiency would be a factor in choosing their next television.
During February 651,000 jobs were lost. The unemployment rate is over eight percent. As Obama put it in his weekly address, it is the highest unemployment rate in a "quarter century." During the address, he mentioned the Consumer and Business Lending Initiative, a $1 trillion program to revitalize lending.
The initiative expands the $200 billion program started in November that lends money to investors so they can purchase securities that are backed by debt. It was called the Team Asset-Backed Securities Loan Facility. The initiative will also include securities backed by commercial real estate mortgages.
Stimulus package and businesses
The American Recovery and Reinvestment Act contains help for small businesses, including $730 million to the Small Business Administration, which is an independent government agency that helps small businesses. The $730 breaks down as follows:
$375 million for temporary fee reductions or eliminations on SBA loans and increased SBA guaranteed shares, up to 90 percent for certain loans
$255 million for a new loan program to help small businesses meet existing debt payments
$30 million for expanding SBA’s Microloan program, enough to finance up to $50 million in new lending and $24 million in technical assistance grants to microlenders
$20 million for technology systems to streamline SBA’s lending and oversight processes
$15 million for expanding SBA’s Surety Bond Guarantee program
$25 million for staffing up to meet demands for new programs
$10 million for the Office of Inspector General
“The tax incentives and credit stimulus elements of the Recovery Act will truly help small business owners affected by the credit crunch, and will provide financing opportunities to help them create new jobs in their communities,” said Acting SBA Administrator Darryl K. Hairston.
Fixing the Healthcare system will save businesses money
Last Thursday, Obama held a healthcare summit. He linked addressing the problems with the healthcare system to "putting America on a sustainable fiscal course." The U.S. healthcare system is in sorry shape. The Commonwealth Fund Commission gave the U.S. healthcare system a score of 65 (out of 100) when compared to other industrialized countries. The overall performance of the healthcare system did not improve from 2006 to 2008, and access to healthcare decreased. The efficiency of the healthcare system continued to be low.
The U.S. spends twice the amount per capita on healthcare that other industrialized countries do, but ranks last among 19 industrialized countries. It ranked 15th last year. The rate of uninsured adults increased from 35 percent in 2003 to 42 percent in 2007. According to the Commonwealth Fund Commission, “We are headed toward $1 of every $5 of national income going toward health care.”
Health insurance premiums for employers increased almost five times faster than inflation over the last five years, according to a 2008 study by the National Coalition on Healthcare (NCHC). Health insurance premiums also increased four times faster than wage growth. Premiums are rising at double digit rates. "It is becoming clear to many companies that at current rates, their health insurance expenses will outpace their profits,” the NCHC study stated.
The rising costs of premiums affects businesses by reducing their capacity to grow, which in turn affects the economy because the job growth rate slows and wages do not increase.
Productivity decreases for businesses unable to provide their employees with coverage. The HR Policy Association puts the annual cost of decreased productivity between $87 billion and $126 billion.
A survey last year by the Kaiser Family Foundation asked employers what changes they will make to health plans for the next year. Forty percent said they are or are very likely to increase workers contributions. Forty-one percent said they will increase deductible amounts, 45 percent will increase office visit cost sharing, and 41 percent will increase
the amount employees will pay for prescription drugs.
Last September a study by the Urban Institute titled Making Healthcare Reform Work for Small Businesses showed that small businesses are more affected by rising health insurance premiums than large businesses. In 2006, only 35 percent of businesses with less than 10 workers offered health insurance to employees, but 98 percent with 1,000 or more workers did.
A study titled The Future of Employment-Based Health Benefits by the Employee Benefit Research Institute concluded that employers “have clearly passed the tipping point on retiree health benefits, which are in a sharp decline.” The percentage of businesses with less than 200 employees that offered retiree health benefits decreased from 68 percent in 200 to 59 percent in 2007.
The National Federation of Independent Business (NFIB) believes that the “current system of health insurance and health care is financially unsustainable and threatens the health and financial security of the American people.” Small business owners and their employees are “especially vulnerable to the weaknesses of our current system.”
Obama's healthcare plan
Obama does not support a government-run healthcare plan or letting health insurance companies operate without regulation. Instead he favors a plan that requires health insurance companies to cover pre-existing conditions, creates a Small Business Health Tax Credit to help small businesses afford offering their employees coverage, and prevents insurers from overcharging doctors for their malpractice insurance.
Obama's plan would also create a National Health Insurance Exchange which would include private insurance options and a public plan based on benefits available to congressional members.
Today the UN Secretary General, Ban Ki-moon called for businesses to "re-orient your organizations for the economy of the future" while speaking at the UN Global Compact's World Economic Forum in Davos/Switzerland. Ban Ki-moon described a green economy as low-carbon, energy efficient, investing in sustainable technologies, and creating jobs.
Ban Ki-moon acknowledged the momentum for a "global green new deal." He urged business leaders to "develop good policies and practices in the areas of human rights, the treatment of workers, the environment and anti-corruption." He also urged business leaders to use the Global Compact's "accountability framework and disclose your progress annually." He reassured them that by "doing so" they would help "restore trust, confidence and credibility into the markets."
The Global Compact is a "leadership platform...offering a unique strategic platform for participants to advance their commitments to sustainability and corporate citizenship," according to its website. It has over 4,700 participants from 130 countries.
Ban Ki-moon called it the " world's largest corporate sustainability initiative," and urged business leaders to join in the Global Compact's "new phase."
Studies confirm green economy will create millions of jobs
A study released by the United State Conference of Mayors last fall details the advantages of a green economy. The advantages include "investments in new technologies, greater productivity, improvements in the US balance of trade, increased real disposable income across the nation…lower costs of doing business, and reduced household energy expenditures.” The study called for investments in renewable energy, alternative fuels, and clean technology, which it describes as "critical to our competitiveness in the global economy, to our living standards, indeed, to our future."
A joint study by the Center on Wisconsin Strategy, The Workforce Alliance, and The Apollo Alliance states that a "greener American economy can and will create jobs," but the amount of jobs created "depends on the scale and terms of future investment."
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