As is typical in emerging markets, CEE countries are undergoing rapid political, economic and environmental change. Economies are recovering, governments are stabilizing, market-oriented institutions are emerging, and local business activity is rapidly increasing and gaining exposure to the West. Although the level of development and pace of change varies substantially throughout the region, one consensus has emerged: the environmental challenges are too great for governments to solve alone. The private sector must take a more active role in optimizing the use of raw materials and energy, reducing emissions and protecting the natural environment.
Unfortunately, the CEE private sector faces two major obstacles in reducing their environmental impacts: the lack of financing and the lack of a well-developed environmental market. Limited financial resources is an obvious problem as many CEE industries experience new competitive pressures that encourage them to "profit now" and cut costs wherever possible. This problem is compounded by the difficulties in identifying environmental investments that are attractive to investors.
The other, less obvious obstacle is the absence of a well-developed base of local environmental businesses that can help solve the environmental challenges facing industry. Even when CEE industries have money for environmental projects, they often find it difficult to locate experienced local providers of environmental services and technologies and must look to more expensive western firms. This is especially a problem for small and medium- sized enterprises (SMEs) since most lack in-house environmental expertise and must rely on outside consultants to assist them in adopting sustainable industrial activities.
The development of an environmental business sector is affected by many factors including; political considerations, economic trends, environmental institutional capacity, environmental spending and regulatory enforcement. Like other sectors, environmental businesses need a thorough understanding of the markets in which they operate to be successful. This report brings together some of these factors and presents the status of this emerging environmental market.
In order to obtain an representative sample, the survey was conducted across the widest possible geographic and company (i.e. size and income) spectrums. This, however, proved to be a difficult task because there was no reliable list of environmental companies operating in each country. Interviewers were instructed to contact high ranking company representatives with an understanding of the company's operations and finances, such as the president, vice president, marketing director or technical manager.
The first of the four surveys was conducted in Hungary as a pilot for the others. Before designing a survey instrument, REC personnel met with several private Hungarian environmental business representatives in order to validate some assumptions about their information needs. The survey was drafted in English, reviewed by REC environmental experts and sent to Hungarian environmental professionals for revisions. A Hungarian market research firm was contracted to translate the questionnaire and conduct the survey in face-to-face interviews.
In Poland and the Slovak Republic, professional market research firms were contracted to translate the survey into local languages, conduct face-to-face interviews with 150 companies and perform statistical analysis of the results. In the Czech Republic, an environmental consulting firm collected the data and then sub-contracted a market research firm to perform the statistical functions on the 150 completed surveys.
For the purpose of this study, the term "environmental business" refers to a broad group of market-oriented businesses which provide services or technologies for environmental protection such as pollution control technology manufacturers, testing laboratories, waste transporters and environmental consulting firms. The survey group consisted of companies earning more than half of their annual revenues from environmental activities.