A study conducted by the Business Development Bank of Canada (BDC) has revealed 82 per cent of Canadian entrepreneurs are taking steps to reduce the environmental impact of their activities.
Pierre Cleroux, BDC’s vice-president of research and chief economist, said he is encouraged by this strong number, but added there was another aspect of the study that surprised him -most.
“84 per cent of Canadian entrepreneurs said they believe it is their own responsibility to take action,” said Cleroux. “We were surprised by this number being so high.”
Another highlight from the study – A Transformation in Progress: How Canadian Entrepreneurs Are Taking on the Environmental Challenge – was what motivated respondents to take environmental action.
“They said it was personal conviction,” explained Cleroux. “So, the No. 1 reason why they are taking action is personal conviction . . . 63 per cent.”
Other key findings of the study, which surveyed 1,515 Canadian business leaders and 1,014 consumers, found that 43 per cent of respondents expect climate change will negatively impact their business. Another 11 per cent said extreme weather has already had an impact on their business over the past five years.
On the consumer side, 34 per cent consider the environmental impact of their purchases, while 60 per cent said price remains their primary buying criterion.
Related to cost, 41 per cent of entrepreneurs indicated the costs associated with their green initiatives are not passed on to consumers, but rather absorbed by the company. Another 25 per cent take steps to educate customers about their environmental efforts.
The BDC conducted the study to provide a roadmap for businesses at each stage of their green transition, offering direction on how to assess current environmental performance, reducing energy and water consumption, eco-design products and services, and more.
One of the first steps surveyed businesses have taken to help the environment is to reduce waste.
“A lot of people are eliminating waste, so they are finding ways or taking action to reduce waste,” said Cleroux. “A lot of businesses, especially if they are in production, they recycle their waste with other industries.”
Other green actions include reducing electricity and water consumption, as well as eliminating paper.
“They are always surprised by how much they save on that,” Cleroux said of paper reduction. “We don’t realize how much paper we use.”
A benefit to all
“By becoming more efficient, they often perform better financially,” said Cleroux. “In our research, the leaders, the ones who were taking the most action, perform better in terms of revenue growth and profit.”
The BDC’s study included “green profiles” of Canadian companies and found 26 per cent were considered beginners, 54 per cent are in transition and 20 per cent are leaders or taking advanced steps in green performance.
“Our study shows that acting for the environment doesn’t hurt financial performance,” Cleroux said in a release. “In fact, it can boost profits and speed up the economic recovery. We hope our findings inspire others to take even more environmentally beneficial and profitable business decisions.”
Pandemic not a factor
Cleroux said COVID-19 has not impacted how Canadian entrepreneurs are investing in green initiatives.
“If you would take action on the environment for your personal convictions, I think the pandemic wouldn’t change that,” he said.
“There are a lot of challenges related to the pandemic, but you’re going to run your business with your own conviction and if your conviction is to reduce the impact of your business on the environment, then you will continue to do that even in tough times.”
Cleroux has a 25-year career as an economist including positions with the Province of Quebec, advisor to Montreal International and 12 years at the Canadian Federation of Independent Business.
“I’ve worked all my career as an economist, but for different organizations,” he said, underscoring the Quebec and Saudi Arabian governments as examples.
For the Saudi Arabian government, Cleroux worked to diversify the country’s economy beyond the oil sector.
“I’ve had positions that are very different,” he said, “but always in the economic field.”
A bank for entrepreneurs, BDC provides access to financing and advisory services to help Canadian businesses grow. It is a crown corporation that operates at arm’s length from its sole shareholder, the Government of Canada.
BDC has 100 business centres across the country, 2,400 employees and has committed $36-billion to small and medium businesses.