Doing business in fight climate change - brief analysis of a survey

Within the framework of the Fight Climate Change project, the cluster member KISMC participates in, a survey was conducted in the period January - March 2022, which aimed to obtain indicative information about the readiness, commitment and needs for doing business or implementing projects in such sensitive thematic areas as "fighting climate change" , "green transition" and "circular economy".

The responses received, while not claiming to be representative, nevertheless contributed to a better understanding of the opportunities and challenges for conducting and doing business in these areas. 

Below is a brief analysis and conclusions from this study. 

The survey involved 75 participants from 15 countries, mostly from Europe, who were distributed as follows:

• 57 business representatives - production and consulting companies, suppliers or users of green technologies, services and projects, of which micro-enterprises predominated (36 companies with a staff of up to 9 people), 17 SMEs and 4 large companies with over 250 employees
• 18 representatives of NGOs, scientific and educational and public organizations.

It turned out that nearly 70% of the respondents are familiar with and/or interested in the issues of "fighting climate change", "green transition" and "circular economy". It can be seen that this topic, under the influence of the UN, world institutions and EU policies and programs, has entered a maturity phase in spreading in Europe and over the world, and there is already a clear interest in direct engagement and participation of bussines and public and non-governmental organizations.

Interesting results were obtained from the answers to the question whether and in which areas the respondents offer technologies, services and products or participate in green transition projects. It turned out that quite a large percentage (44%) of them do not actually offer such at the moment, but intend to do so in the future. This is indicative and shows that the topic is firmly on the agenda of business and educational, non-governmental and scientific organizations.

As can be seen below, the answers are distributed among the main thematic areas relatively evenly (taking into account that the respondents had possibility to indicate more than one answer):

• energy: measurement, monitoring and saving, mobility and transport efficiency, etc. - 27%
• air: quality and risk monitoring, harmful emissions, health protection, behavioral changes, etc. - 21%
• water: measurement and monitoring of consumption, purification, reuse, etc. - 19%
• materials: optimized consumption, eco-materials, recycling, reuse, etc. - 17%
• others related to this topic - 15%.

Following the objectives of the survey, we reviewed with interest the answers from which we can judge the future behavior of the surveyed representatives of businesses and organizations, i.e. in which areas they are most interested in innovating, investing or implementing various projects. Here, too, the distribution of answers is relatively even, but still the first three topics are of the greatest interest. Below is the distribution of responses as a percentage of responses received:

• recycling, reuse and efficient recovery of substances left over from the production process, turning waste into useful materials and fuels that would otherwise be thrown into ever-growing landfills - 51%
• improving wealth, health and the environment for people at the bottom of the pyramid - 48%
• reduction of energy consumption due to inefficient systems, new ways of consumption and higher energy efficiency - 44%
• improving processes related to agriculture and food production, such as making more food more available, cultivation more sustainable and processes less wasteful - 33%
• implementing smarter energy saving systems and developing alternative energy sources to reduce emissions and reduce costs - 33%
• development of alternative and clean sources of energy to reduce the use of expensive and polluting fossil fuels - 28%
• creating a more efficient and environmentally friendly construction process and building materials, thereby attacking one of the largest sources of harmful greenhouse gases and physical waste - 15%
• others related to the green transition - 5%

At the start of this project, most of us did not have an accurate idea of ​​whether and how much climate change and other similar phenomena are affecting business, and how much this impact actually creates new business opportunities for those who are developers, suppliers, customers or implementers of green projects, products, services and technologies? In other words, we asked the participants in which areas climate change creates new opportunities for doing business.

Below are the responses in descending order of their share in percentages:

• introduction of systems and business processes for green and circular economy - 53%
• reduction and reuse of waste and materials - 44%
• investing in "green" projects, products and technologies - 39%
• tools to improve energy efficiency - 36%
• increasing market demand and introduction of sustainable business models - 33%
• use of suitable environmentally friendly materials - 33%
• impacts to reduce harmful emissions - 25%
• optimizing consumption and improving water quality - 21%.

One of the important answers for us was what were the views of the respondents regarding the business models used in the circular economy. We wanted to know if the ones we put in the survey are known and which are the most used. It became clear that they are all familiar with two leading ones - platforms for sharing (47%) and recycling (36%). Below are the ratings of all the business models, ranked in descending order of their share in percentages:

1. sharing platforms (web-based digital platforms for using goods and resources by renting, selling, sharing) - 47%
2. replacement and recycling (renewable, recyclable and biodegradable materials are used for their products and design. Fossil fuels are replaced with renewable energy) - 36%
3. the product as a service (the manufacturer owns and maintains the product, and the customer pays for certain functions or services/activities) - 29%
4. use of waste resources (recycled waste is raw material for new products) - 29%
5. product life extension (providing repair and reuse services to extend product life) - 28%

When asked what result the respondents would like to achieve if they implement or use an innovative business model, their desire to have better access to partnerships and funding from the EU, to improve their economic results, and to facilitate their access to knowledge and green innovation received the greatest result, respectivly 52%,48% and 48%  Interestingly, however, 11% frankly do not know what answer to give, which is an area for future analysis. Below is the distribution of the results obtained, again arranged in descending order of their share in percentages:

• new opportunities for partnerships in green projects (including those funded by the EU) - 52%
• improving production efficiency and economic results - 48%
• transfer of green technologies, knowledge, information and know-how - 48%
• securing new jobs - 24%
• improving the international image and innovative branding - 17%
• don't know - 11%
• other (specify) 3%

What are the attitudes of the respondents about how to finance their green projects. This was for us one of the most important questions because it would also determine our conclusions about the support and incentives needed to activate the green transition and the circular economy. We were not surprised that the largest percentage of respondents indicated that they would rely mainly on EU funding. The green and social entrepreneurship is extremely difficult and a purely market approach is treated by businesses as risky, and besides, there were also public organizations and NGOs among the respondents, which also supports this thesis. That is why the search for funding from the EU and through national government grant schemes received the highest results, respectively - 72% and 37%, and such ways as direct investments and venture capital only at the level of 24%.

Below are the responses in descending order of their share in percentages, with the sum of these percentages exceeding 100% because each respondent could vote for more than one option.

• opportunities for EU funding and tenders – 72% 
• government grant schemes – 53%
• public-private partnership projects – 37%
• direct private and foreign investments – 24%
• venture capital - 24%
• business accelerators -17%
• lending from international financial institutions – 12%
• bank loans – 3%
• other (specify) - 1%

Our last question for this analysis was related to the extent to which respondents see their involvement in R&D and business processes related to the green transition and the circular economy. Of the mentioned opportunities, the largest percentage (53%) of the respondents saw their participation in partner projects, financed and/or financially supported by the EC or another financial institution.

Below are all responses, ranked in descending order of their share in percentages, with the sum of those percentages exceeding 100% because each respondent could vote for more than one option:

• participation in a partnership for the implementation of projects financially supported by the EC or other institutions or financial bodies - 53%
• participation as an expert or consultant in the development or implementation of private or public projects in this field - 33%
• participation in online meetings and webinars led by an expert to explain the new wave of work and funding and the use of appropriate business models - 32%
• receiving individual consultations and mentoring on your business plan and projects in this area - 32%
• long-term vocational training courses and/or training based on a university curriculum (traditional as well as distance learning or online life sessions) - 21%
• other (specify) - 3%

There is no doubt that the challenges of climate change are large, dynamic and will lead to ever greater changes in the behavior of governments and the international community. However, the business response must be in sync with all these measures, and the innovative behavior of entrepreneurs, small businesses and corporations must be based on a flexible approach of combining business purposes with the corporate social responsibility.

We believe in the motto of the social entrepreneurship - do business for good!