Small and Medium-Sized Business Struggle to Reach Net-Zero Targets
SAINT JOHN — Atlantic Canadian small and medium-sized businesses have a long way to go, and an uncertain path to take, to meet net-zero targets.
The latest in APEC’s ongoing series of reports on climate goals in Atlantic Canada looks at the obstacles confronting small and medium-sized enterprises (SMEs) in pursuit of net-zero goals.
“Only about three per cent of Atlantic SMEs in 2020 adopted clean technology, as compared to four to six per cent in other parts of Canada,” says APEC senior policy analyst, Fred Bergman. “That’s lower, but it’s not significantly lower.”
Atlantic Canada being home to the smallest provinces in Canada, both population-wise and geographically, means scale and scope make green tech goals harder to achieve.
“Certain technologies might not work as well here, such as solar in parts of Labrador, because they have less sunlight… it might be because the wind doesn’t blow as much in a particular location … so that type of clean technology just doesn’t make sense.”
The organization has identified actions SMEs, which make up over 99 per cent of businesses in Atlantic Canada, need to take to get on track for net zero. It categorized them as: measure, change, and invest.
“Some of them may not have the technical knowledge or staff in-house to help measure their emissions, and that’s where they might require a consultant or expert to assist them with that,” says Bergman of the “measure” component SMEs need to start on the net-zero journey, with tools like energy audits.
“This is not just in terms of measuring their emissions, their GHG emissions from their activities, but it’s also in terms of assessing their energy use. What types of fuels or non-emitting fuels are they using? How much electricity are they using behind the scenes?”
Bergman says the “change” component can be simple, things that involve small tweaks to processes like turning off computers or other electricity-using devices, rather than leaving them in sleep mode. Or supporting carpooling to the office. These are behavioural changes that shouldn’t cost much, but which also will only produce small, but significant, results.
“Invest” is the biggest factor as far as impact goes, but it’s also the most expensive and, in this environment of uncertainty, the most risky.
“These are the known technologies that are quite ingrained, such as investing in electric vehicles in terms of transportation, or in investing in ways to improve energy efficiency in buildings. Whether that’s better windows and doors, whether that’s more insulation, whether that’s converting to using heat pumps where possible, or installing solar panels on your roof,” he says.
“In terms of their industrial production processes…I know some of the larger firms are looking at: ‘How do we tap into wind turbines to help power our plant? Do we decide to use hydrogen or natural gas to run our production lines, instead of relying on fuel oil.”
“Those get a bit more expensive.”
And in this time of high inflation, making a significant investment that could will take years or possibly decades to pay off is a hard sell compared to making another investment in your company that could help increase profits and pay for itself much more quickly.
In fact, APEC’s report found that insufficient return on investment and competing capital investments were the top two obstacles to clean technology adoption.
There is another issue. For businesses that rent or lease their operating space, it’s much more difficult and more risky to make investments in the buildings themselves to reduce emissions since they don’t own them.
Bergman says it may still be worthwhile for businesses to talk to landlords about making these kinds of investments in buildings. In addition to the energy savings of such investments, landlords may be willing to make concessions regarding rent. But if a business needs to leave the building, that investment will be lost – so it’s important to get a clear agreement on the leasing terms for businesses thinking of making such investments.
There’s also the question of if governments themselves are able to keep up with the pace they’re purporting to set regarding the transition to lower emission choices.
The report cites the story of Tacora Resources Inc of Newfoundland that is “committed to reducing its environmental footprint” in part by substituting fuel use with electricity. The changes it wants to make would “require a doubling of its electricity allotment from NL Hydro. The allotment is currently capped due to a lack of transmission capacity” the report says.
That presents a significant logistical problem that governments and utilities need to address.
For its part, APEC says the government should introduce a net-zero educational campaign for SMEs and put more emphasis on emissions reduction for public procurement opportunities.
Alex Graham is a Huddle reporter in Saint John. Send her your feedback and story ideas: [email protected].