Economy

Small-Business Owners Struggling to Become More "Green"

by Dennis Jacobe, Chief Economist

One in three owners say economic conditions have impacted their plans to go green

PRINCETON, NJ -- One in three small-business owners say the economy has impacted their plans to become more "green," and fewer think their customers would be willing to pay more for environmentally friendly goods and services today (27%) than thought that was the case about two years ago (43%).

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Becoming More Green

Given the perception that fewer customers value being environmentally friendly in the current economy, it is not surprising that fewer owners (37%) are taking steps to show their customers they are environmentally friendly than was the case in 2007 (47%).

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Among this group, when asked why their companies take steps to show customers they are environmentally friendly, 9 in 10 attribute it to a personal commitment, while nearly three out of four say it is for good public relations and community goodwill. Additionally, 69% say they do so to attract customers and increase sales and 59% say they use this as a way to achieve cost savings.

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Still Making an Effort to Be Green

Although small-business owners perceive less demand for "green" goods, about half say their companies are doing as much as possible (18%) or everything that can be justified by cost (33%) to help the environment.

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While most small-business efforts to help the environment are fairly basic, some small businesses are doing more. Nearly 9 out of 10 small-business owners say their companies recycle and about three in four have switched to more environmentally friendly products in the past 12 months. A third or less of owners say their companies have made additional efforts to go "green."

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Commentary

Small-business owners' perceptions that their customers are less willing to pay more for environmentally friendly products and services are most likely correct. Current economic conditions seemed to have changed consumer views of the economic growth versus environmental preservation trade-off. In March, Gallup reported that for the first time in the 25-year history of asking Americans about the trade-off between environmental protection and economic growth, a majority of Americans said economic growth should be given priority even if the environment suffers to some extent.

At the same time, it is not surprising that one in three small-business owners suggest that the economic stresses on small businesses today have made it more difficult for them to make their companies more "green." Further, most small-business owners don't expect a lot of help from Washington, with only 32% saying President Obama's policies and plans for the environment will help small-business owners while 26% say these policies are likely to hurt them and 27% believe they will make no difference.

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In this regard, it seems as though Congress and the administration may have an opportunity to simultaneously boost the U.S. economy and improve the environment by helping America's small businesses become more "green." Whether it is tax cuts or credits, a special grant program, or something else, finding a way to help small businesses become increasingly "green" would seem likely to create jobs, stimulate the economy, and improve the environment without the controversy surrounding the "cap-and-trade" plan to tax and limit carbon emissions.

Survey Methods

Results for the Wells Fargo/Gallup Small Business Survey are based on telephone interviews with 604 small-business owners, conducted Jan. 22 to Feb. 2, 2009. For results based on the total sample of small-business owners, one can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

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Gallup http://www.gallup.com/poll/117340/Small-Business-Owners-Struggling-Become-Green.aspx
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