The impact of small business on the environment

Objectives: Small businesses are estimated to contribute a significant proportion of global pollution, yet there is little empirical evidence to support this claim. The main aim of this research was to conduct an exploratory analysis of small business’s environmental impact in terms of waste, water and energy.

Prior work: Due to the negative impact small businesses are reported to have on the environment, their disengagement in environmental management practices has caused international concern. Much of the literature has concentrated on identifying the barriers and drivers of small business engagement. Little empirical work being conducted on the actual impact of they have on the environment or on the influence of the local context on their environmental practices.

Approach: A survey was developed and distributed to 466 small businesses within two light industrial areas in Perth Western Australia, which achieved a response rate of 87%. This survey will be replicated after a 12 month intervention is conducted. The two light industrial areas were selected as their Local Government Authorities are looking for businesses within their boundaries to improve their environmental performance.

Results: Initial results suggest that the small businesses do have a considerable impact on the environment in terms of waste disposal. Moreover, their environmental management practices concerning waste, energy and water were found to differ depending on the local contexts in which the small businesses operate.

Implications: As small businesses are both economically and socially important to all major industrialised nations, empirical research that provides evidence of their impact on the environment is critical. The implication here is that if the context in which these businesses operate influences the practices employed, developing strategies that acknowledge the influence and consequences of context may be more effective than those currently available. Differences identified within practices suggest that greater awareness and education is needed on water management than energy or waste, as this is the area where small business owner-managers have shown they have less knowledge and/or active engagement.

Value: This research is valuable in three ways. First, it adds to the knowledge of small business impact on the environment. Second, it identifies that context may be a factor that needs to be considered when developing strategies to engage small businesses in environmental management. Finally, it shows that the environmental management of water is the least well established environmental priority of small businesses at this time.