Economic Development News & Insight


The Higher ED Blog: Barriers to household and business sustainability practices

Tara Vinodrai / November 23, 2015

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The Higher ED Blog: Barriers to household and business sustainability practices

With the United Nations Conference on Climate Change fast-approaching, we noted that we would dedicate some of our time here at Higher Ed exploring issues related to sustainability and the green economy (starting with a new use for Ontario’s decommissioned coal plants). Debates rage about what changes are needed and what policy instrument will work best to address these issues. Much of this discussion is focused on national and international agreements, but there is also room to consider how the behaviour and practices of individuals and firms can be changed as well. This week, we review two recent major research papers completed by students in our Local Economic Development program to understand differences amongst households and firms in how they have (or have not) taken steps to reduce their impact on the environment.

Reducing household electricity consumption?

As communities begin to consider how to reduce their footprint, there remains a question about how to best achieve this goal. Recently, communities have been using approaches like social marketing campaigns, financial incentives or technology-oriented solutions to encourage lower levels of consumption in areas such as water and energy. An example of a technology-oriented solution is an energy hub management system, which is designed to empower individual locations (everything from detached homes to large manufacturing facilities) to monitor and reduce electricity consumption.

Such solutions are the focus of the University of Waterloo’s Energy Hub Management Systems (EHMS) project funded by the Ontario Centres of Excellence. However, having sophisticated smart grid technologies, like those designed by the EHMS project, does not necessarily mean that individuals will use them. Thus, in partnership with Milton Hydro, the EHMS group recruited 25 households in Milton, Ontario to participate in a pilot project where they collected data on energy consumption, use of the technology, and other household characteristics.

As part of this project, Siamak Khorrami worked with his supervisor, Paul Parker, to understand how these pilot project households used the technology solution (hardware, software and mathematical modeling tools) designed and developed by the EHMS group. Siamak used the very detailed data on these 25 households to explore issues related to technology adoption. One of the questions he asked was: Are individuals with more experience with information technologies willing to use and engage with new smart grid technologies? Through carefully analyzing the data on these 25 households, Siamak did not find any strong association between households that are more tech savvy and higher levels of engagement with the EHMS. In other words, households that were more familiar and comfortable with technology did not necessarily use the EHMS systems more (or better) than other households. This challenges one of the key assumptions we make when planning and implementing community-wide solutions to environmental and economic development challenges, and certainly one that requires further exploration.

Adopting sustainability practices in the commercial real estate sector

Businesses are also increasingly asked to disclose and report on their sustainability practices. Yet, there is great unevenness both between and within sectors in terms of the uptake of various sustainability initiatives. For instance, Canada’s commercial real estate (CRE) sector lags behind domestic and international sectors in all areas of sustainability performance. From an economic development perspective, the CRE is important as it is responsible for the inventory of land available for site selection and business development. Moreover, the Canadian CRE accounts for over 340,000 jobs and makes a GDP contribution of approximately $32.5 billion annually.

Ailish Wade, under the supervision of Michael Wood, sought to understand the differences amongst firms in Canada’s commercial real estate sector. She started by reviewing how the CRE sector has dealt with sustainability issues in a number of different geographic contexts, including leading nations such as Australia and the United Kingdom, as well as in other countries.

A consistent theme is that, even amongst CRE firms committed to socially and environmentally responsible property investing, there are substantial differences in terms of their sustainability performance. Why? Ailish explored this question in the Canadian context through detailed case studies of four CRE firms, examining their publicly available annual reports, corporate sustainability reports, and other information, as well as interviewing representatives from the firms and several sector experts. She examined the internal capabilities of the firms with respect to stakeholder engagement, knowledge management, innovation, visioning, risk-taking, and the extent to which sustainability was embedded within firm practices.

Despite limited sample size, Ailish’s findings suggest that firms with strong sustainability performance also had more and better developed capabilities, in areas such as stakeholder engagement and partnership development, compared to the firms with moderate sustainability performance. This provides some clear avenues for future exploration, as it suggests that the ability of organizations to behave in more sustainable ways rests on their pre-existing capabilities.

Lessons learned?

Increasingly, the economic development community is being asked to address sustainability concerns, whether driven by the requirements of community sustainability plans, political agendas, legislative and regulatory changes, or strongly held community or organizational beliefs. The two research projects discussed here both demonstrate that even if households, organizations, or communities want to become more sustainable, the road to change is far from straightforward. In the case of household energy consumption, even individuals capable of using technologies don’t necessarily put them to use. Often times, we assume technology provides the answer, but careful thought needs to go in to how we design and implement community-wide systems. And in the case of Canada’s CRE, firms need to have well-developed capabilities in other areas of business practice to even adopt sustainability practices. There might be a role for sector-wide business upgrading that will–in the long term–facilitate the transition to a sustainable future.

About the author

Dr. Tara Vinodrai is Director of the Local Economic Development graduate program at the University of Waterloo and Assistant Editor of Higher Ed blog. She is an expert on urban economies, regional development, innovation and clusters, and the creative/cultural economy. Follow her on Twitter @TaraVinodrai.

About the series

Higher ED: Insights for the Next Economy is a platform for students, guest speakers, staff and faculty of the University of Waterloo’s professional and graduate economic development programs to share knowledge with the field at large. The series takes works destined for an academic audience and reworks them into a fresh, easy-to-digest blog article.

Established in 1988, the Local Economic Development program is the only master’s program in Canada devoted solely to local economic development. It offers a balance between theory and practice by combining coursework, a major research paper, an internship, and weekly seminars featuring guest speakers. Students are prepared for careers in local, community, or regional economic development.

The Economic Development Program is a nationally-accredited provider of professional training. It delivers certification programs and seminars that offer a deep understanding of the Canadian context in a convenient block format. Peer learning is combined with informative lectures and practical case studies to provide dynamic instruction that is beneficial for junior and senior-level practitioners.

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