Business Demands Green Tax Breaks

by Jason Gorringe, Tax-News.com, London

04 June 2010

An international survey has found that governments worldwide must introduce new tax breaks to increase the uptake of green investment. 75% of companies involved in the survey said they would look to adopt green policies if they were available on a subsidized basis.

The survey, conducted by workspace solutions provider Regus, revealed that only 37% of companies worldwide actually measure their emissions and less than a fifth of companies (19%) measure the carbon footprint left by their activities. 46% of companies globally declare that they will only invest in low-carbon equipment if the running costs are the same or lower than those of conventional equipment. A disappointing 40% have invested in low-carbon equipment and only 38% have a company policy to do so.

In every country, small companies are below average on their actual and predicted level of green investment, indicating that smaller businesses are harder pressed to select low-carbon equipment when this comes at marginally higher price, as short-term needs are more urgent than long-term investment. Only 19% of small businesses said they monitor their carbon foot print compared to 43% of large businesses. Similarly only 36% of small businesses had invested in green equipment compared to 59% of large businesses. Ambitious government targets are evidently not taking into account the reality of green equipment take up among smaller businesses, the report surmised.

The survey also analyzed sectoral differences. It said that companies in the ICT sector had a carbon footprint comparable to that of the aviation industry. 53% of companies in this sector had invested in green technology and 57% had a policy to do so. By contrast only 25% of companies in the consultancy sector monitor their carbon foot print, but 71% declared that the majority of their equipment was energy efficient.

Mark Dixon, Chief Executive of Regus, commented:

“The uptake of green equipment and monitoring initiatives is still disappointingly low, particularly for smaller companies. Yet small and medium-sized companies account for half of any country’s business turnover. If governments are serious about meeting ambitious carbon emission reduction targets by mid-century, then they need to properly incentivise the change. At the moment, low-carbon business technology is often limited in range and sold at premium pricing. This is proving an obstacle for businesses to invest. Tax breaks will help enormously, as our survey shows, and by accelerating uptake will also help to create a mass market where unit prices fall.|”

“Environmental investments are not limited to technology alone, but need to be applicable to all effective and measurable environmental initiatives, such as the minimization of premises under-occupancy. Conservative estimates hold that 38% of office space is unoccupied at any given time, yet that space is still being heated, cooled and lit, generating tonnes of unnecessary carbon emissions each year. Reducing office under-occupancy should therefore be just as eligible for tax breaks as low-energy equipment.”

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