IBM green business research:
Analysis and comparisons to overseas data
Prepared for
Prepared by Ben Parsons
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Executive summary
IBM has commissioned the New Zealand Business Council for Sustainable Development (NZBCSD) to run an online survey through its ShapeNZ panel. The study explored business owners’ and employees’ perceptions around environmental sustainability and the role of IT infrastructure on organisational energy use. The total sample was 2302 business respondents, with a sub-group of 200 IT Managers. The data from this survey has been used to compare NZ businesses’ attitudes to that of their counterparts in Australia and other nations, from prior IBM research.
Key findings included:
Ø 65% of respondents believe businesses must become more environmentally sustainable for New Zealand to have continued success in the global economy. Interestingly, IT managers and those working in the IT industry were less likely to hold this view.
Ø 21% of respondents believe their organisation has an environmental or sustainable development strategy – compared to 55% in Australia and 41% in the US.
Ø 48% of NZ business respondents claim environmental considerations have either no impact or only a slight impact on their organisation’s purchase decisions. Just over a quarter (28%) of businesses say environmental considerations have a moderate or significant impact. Organisations in the Government Administration & Defence and Manufacturing industries gave greater consideration to environmental considerations.
Ø New Zealand businesses, like their overseas counterparts, are reporting relatively rapid rises in energy costs. In 30% of New Zealand businesses, energy costs are rising faster than any other cost. 45% of respondents in the Manufacturing industry reported that energy costs have increased most in the past year.
Ø Though many organisations may not have an environmental or sustainable development strategy, 50% of NZ businesses have made operational changes to reduce their energy costs or environmental impact and 24% plan to make changes in the next year. These NZ findings compare well to overseas businesses’ plans, where 34% of Australian and 42% of US small to medium businesses have either made or plan to make changes in business operations to reduce energy costs.
Ø The proportion of an organisation’s energy used by IT equipment is similar in NZ businesses as it is to Australian and other overseas businesses. Despite this, only 39% had made IT infrastructure a key part of the organisation’s environmental strategy, compared to 61% of Australian organisations.
Ø The most commonly given reason for NZ organisations to reduce the emissions from IT infrastructure was cost reduction (45%), while Australian IT managers were more likely to reduce IT emissions out of concern for the environment (62%).
Ø 26% of NZ IT managers did not think it was not possible to reduce IT emissions without compromising performance. Those who believed it was possible most frequently cited infrastructure consolidation as a way to reduce emissions without compromising performance.
In summary, it seems that though NZ employees may feel sustainability is an important issue, many organisations have yet to develop corporate strategies for energy reduction, or reducing energy from IT to the extent of their overseas counterparts. While many NZ businesses are taking steps to reduce their energy use and environmental impact, these measures could be enhanced by greater awareness around the energy usage of IT infrastructure and ways to reduce it.
Background and business need
IBM seeks to understand New Zealand businesses’ attitudes toward environmental sustainability and the steps they are taking to reduce their environmental impacts. This study follows on from similar studies conducted by IBM among small and midsize businesses (between 50 and 500 employees) in eight countries including Australia, India, France, USA, Brazil, Germany, Benelux, and China, about energy efficiency and environmental concerns.
Objectives
Specific research objectives were to discover:
Ø How much emphasis do New Zealand businesses place on environmental sustainability compared to their overseas counterparts?
Ø What steps are New Zealand businesses taking to reduce their environmental impact, and how do these compare to similar overseas businesses?
Ø What role does IT infrastructure play in the energy usage and conservation plans of NZ businesses compared to overseas businesses?
Survey methodology
To achieve the research objectives, IBM commissioned the New Zealand Business Council for Sustainable Development (NZBCSD) to run an online survey through its ShapeNZ panel of business owners and employees. The data from this survey has been used to compare NZ businesses’ attitudes to that of their counterparts in Australia and other nations, from prior IBM research.
This survey may be published with the prior approval of the New Zealand Business Council for Sustainable Development.
Findings
A total of 2302 New Zealand business owners and employees completed the online survey between 26 February and 9 March 2008. A survey sample of this size has a margin of error of +/-2 per cent at the 95 percent confidence level. However, since some respondents did not answer all questions, the sample size and margin of error differs slightly for each question.
Survey data has been weighted to reflect the demographic characteristics of the New Zealand population, based on 2006 Census data. Weights have been applied by gender, age, ethnicity, income, employment status and political party vote.
Within this sample, a total of 200 IT managers, and people in associated IT roles responded to the questions specifically targeting IT infrastructure. This sample has a margin of error of +/-7 per cent at the 95 percent confidence level. Again, since some respondents did not answer all questions, the sample size and margin of error differs slightly for each question.
The opinions of these NZ respondents have been compared to that of 120 Australian small and medium business respondents, 500 American small and medium business respondents and 873 other international small and medium business respondents. The international data has been sourced from prior IBM research. SMB Survey Methodology.
The IT manager questions in this study have been compared to the results from another Australian IBM research study. The Australian survey was conducted over the telephone with 104 IT Managers, IT Directors, and Chief Information Officers from Australian organisations with over 500 employees and across a distribution of industry types.
2.1 Respondents were asked firstly to say how strongly they agreed or disagreed with the following statement: “In order for New Zealand to have continued success in the global economy, NZ businesses must become more environmentally sustainable.” As shown in figure 2.1 below, just under two-thirds (65%) of business owners and employees agreed that New Zealand businesses must become more environmentally sustainable in order to have continued success in the global economy. Fifteen per cent disagreed and 19% either did not know or were neutral.
Figure 2.1: Percent agree and disagree to the statement “In order for New Zealand to have continued success in the global economy, NZ businesses must become more environmentally sustainable”
Base: 2298 employees and business owners
Significant differences in the perception that NZ’s continued success in the global economy requires businesses to become more environmentally sustainable included:
Ø Those who work in the Education (74% agree or strongly agree) or Health and Community Services (72% agree or strongly agree) industries were significantly more likely to agree than those who worked in the Information Technology and Computing Products and Services industry (55% agree or strongly agree)
Ø Those who were employed in an IT management or similar role (across all industries) were significantly less likely to agree (61% agree or strongly agree) than those who do not work in an IT management role (69% agree or strongly agree)
2.2 Respondents were asked whether their organisation currently had an environmental or sustainable development strategy. As figure 2.2 shows, just over one-fifth (21%) of NZ businesses do have such a strategy. It is possible that this number is slightly under-represented, since 39% of respondents did not know whether their organisation did or not. The organisations these respondents work for may have such a policy but have not communicated it widely; or the respondents may have simply forgotten. Those respondents who have senior level decision-making authority in their organisation (responsible for purchase decisions in excess of $100,000) were significantly more likely to report that their organisation had an environmental or sustainable development strategy (54%).
Figure 2.2: Percent of businesses that have an environmental/sustainable development strategy
Base: 2291 employees and business owners
The proportion of NZ businesses with an environmental or sustainable development strategy is considerably lower than that among overseas businesses, as shown below in table 2.2. This discrepancy is particularly obvious between NZ and Australian businesses, with over half of our Australian counterparts having an environmental policy. Again, the NZ data may be slightly under-reported, as above, since the proportion of ‘don’t knows’ is also higher among NZ businesses than in other countries.
Table 2.2.1: Does the organisation you work in have an environmental – or sustainable development strategy currently? Compared to overseas businesses from prior IBM research
NZ / Australia / US / Other internationalYes / 21% / 55% / 41% / 46%
No / 39% / 34% / 54% / 44%
Don't know / 39% / 11% / 5% / 11%
Base: 2291 NZ employees and business owners, 120 Australian small and medium businesses, 500 US SMBs, 873 international SMBs
Among New Zealand businesses, those within the Government Administration and Defence industry were significantly more likely than any other industry to have an environmental or sustainable development strategy (48%). As shown below in table 2.2.2, Organisations within the Health and Community Services, and Retail & Hospitality industries were the least likely to have an environmental strategy (12% and 18% respectively).
Table 2.2.2: Proportion of organisations with an environmental or sustainable development strategy by industry
Yes / No / Don't knowGovernment administration and defence / 48% / 17% / 35%
Manufacturing / 31% / 33% / 36%
Education / 24% / 36% / 40%
Information technology and computing products and services / 24% / 48% / 28%
Other commercial / 23% / 42% / 35%
Health and community services / 12% / 41% / 47%
Retail trade and hospitality / 18% / 40% / 42%
Base: 297 Education, 153 Government Admin, 325 Health & Community, 67 IT, 127 Manufacturing, 286 Retail & Hospitality, 1043 Other Commercial employees and business owners
Among NZ businesses, those who did have a policy in place were asked to give some comment about their policy. As table 2.2.3 below shows, the most common mentions included recycling, steps to meet various quality standards and waste minimisation.
Table 2.2.3: Areas covered within NZ businesses’ environmental or sustainable development strategies
Recycling / 29%Meet ISO/Goldmark/GBC/ Enviroschool/regulatory standards / 19%
Waste minimisation/reuse/disposal / 15%
Energy saving / 15%
We have an environmental policy (no further info provided) / 13%
Part of company philosophy / 10%
Strategy under development / 7%
Strategy exists but needs improvement / 5%
Environmental building design / 3%
We have a green team or similar / 3%
Organic/sustainable products/food / 2%
Carbon offsetting / tree planting / 1%
Other / 6%
Base: 448 NZ employees and business owners who commented on their organisation’s environmental or sustainable development strategy. Percentages add to more than 100% as multiple responses were given
2.3 Respondents were asked how much influence environmental considerations had on their organisation’s purchase decisions for products and services. As figure 2.3 shows, in just under half (48%) of NZ businesses, environmental considerations have either no impact or only a slight impact on purchase decisions. Just over a quarter (28%) of businesses say environmental considerations have a moderate or significant impact.
Figure 2.3: Impact of environmental considerations on business purchase decisions
Base: 2295 employees and business owners
Environmental considerations have a significantly greater impact on those in the Government Administration and Defence industry (38% said environmental considerations have a moderate or significant impact). As table 2.3 below shows, organisations in the Manufacturing industry also gave greater consideration to environmental considerations, while those in the Health and Community Services and Retail & Hospitality industries were less likely to be influenced by environmental considerations when making purchases.
Table 2.3: Impact of environmental considerations on purchase decisions by industry
Government administration and defence / 38% / 39% / 24%
Manufacturing / 34% / 47% / 20%
Other commercial / 31% / 47% / 22%
IT and computing products & services / 24% / 57% / 19%
Education / 23% / 53% / 24%
Retail trade and hospitality / 22% / 51% / 27%
Health and community services / 19% / 49% / 31%
Base: 297 Education, 153 Government Admin, 325 Health & Community, 67 IT, 127 Manufacturing, 286 Retail & Hospitality, 1043 Other Commercial employees and business owners
2.3.1 Those respondents who felt that environmental and social considerations have some impact on their organisations’ purchase decisions were invited to comment further. As table 2.3.1 shows, the most common themes were the use of eco-friendly or sustainable products and services.
Table 2.3.1: How NZ businesses’ purchase decisions are influenced by environmental or social considerations
Use eco-friendly products/organic/recyclable/locally produced / 22%Don't know/purchasing decisions out of hands/not enough done / 19%
Use sustainable products/practices/services / 14%
Recycle / 11%
Inherent in business practices/philosophy / 8%
Fuel efficient vehicles/travel less / 6%
Cost is a factor / 5%
Responsible waste disposal/minimisation / 4%
Energy saving, switch off computer etc. / 4%
Govt. Department/ Enviroschool/ accreditation body requires it / 4%
Depends on /driven by staff willingness/motivation / 3%
Environmental education / 2%
Calculate carbon footprint / 1%
Annual reports consider social and environmental performance / 1%
Other / 14%
Base: 207 NZ employees and business owners who commented on how their organisation’s purchase decisions were affected by environmental social considerations. Percentages add to more than 100% as multiple responses were given
2.4 In almost one-third of New Zealand businesses, energy costs are rising faster than any other cost, as figure 2.4 shows. This is similar to findings in other markets from prior IBM research, where roughly one third of Australian (31%) and US (38%) organisations list energy costs as being among their most rapidly increasing expenses.