Published July 28, 2020
Your guide to creating a sustainable business as an entrepreneur, from inception to development-
- Why Should We Care About The Climate Crisis?
- What is Sustainable Entrepreneurship?
- A Price Worth Paying
- A Holistic Approach to Development
- What is a Green Business Model?
Launching a business is terrifying. There are so many factors and risks that it can often feel like a wading pool of self-doubt. Sleepless nights, trials and failures, and the quest to materialize customers are a constant battle where you have to create your own armor.
If becoming a man-at-arms wasn’t difficult enough, ecologically and socially conscious entrepreneurs are fighting a global battle in their quest to exploit new opportunities and deliver products in a sustainable manner, all while turning a profit.
As businesses are forced into closure and millions are left without jobs, the COVID-19 pandemic has brought about unprecedented challenges, exposing the underbelly of our broken systems and ongoing climate crisis. Small businesses have especially taken the hit, and as some public companies were snatching loans, many unemployed individuals have turned to building their own brand and products to sell online.
The opportunities to address sustainability concerns are worth pursuing. Entrepreneurship involves creativity and innovation, and those that value protecting the environment act as catalysts for change in the current economy, disrupting the status quo of destruction seen by big corporations.
Growing consumer awareness pressures businesses to adopt new processes to protect our environment and flatten another kind of curve. The driving force behind this global shift comes at the grassroots level and from consumers themselves, giving entrepreneurs a platform to lead this growth with tangible results.
Research shows us huge market growth in the sustainability sector. Utilizing eco-design theory, developing a full LCA, and marketing the product accordingly will set entrepreneurs up for success.
Why Should We Care About The Climate Crisis?
Environmental preservation has gained a lot of attention in recent years.
These trends are causing companies to change how they produce their products, especially in the field of consumer-packaged goods, whose packaging makes up roughly 51.8% of our nation’s landfills.
One image burned into our brains is that of the sea turtle and the plastic straw. A quick Google search will produce images and videos of researchers pulling a straw from a sea turtle’s nose. This video, shared globally, sparked an uproar and push to ban all plastic straws.
A staggering 91% of plastic isn’t recycled. Straw bans have spread like wildfire and many companies are nixing plastic straws in favor of their paper counterparts. Businesses like Starbucks and Mcdonald’s have followed suit due to increasing public pressure to use alternatives.
From fast fashion to agriculture, many industries participate in the planet’s contamination and need to assume their responsibility. Growing fervor over ethical consumption is leading consumers to vote with their dollar and assume social responsibility.
When looking at our ecological footprint, the earth’s capacity to provide what we need is declining. There are fewer forests, a limited availability of freshwater, and rising constraints on the amount of food the earth can produce. Our ecosystem is suffering while the resources we consume and the waste we produce is expanding.
Our overflowing landfills show us we are not living how we were designed. Pretty soon industries will be hawking real estate atop Garbage Island. A not-so-distant dystopian future awaits us if we fail to make necessary changes.
Entrepreneurs are paving the way as the emergence of Zero Waste, eco-friendly, and green initiatives are taking place to foster a sustainable world.
Smoking the competition in a different type of green industry enters sustainable entrepreneurship.
What is Sustainable Entrepreneurship?
Businesses need to adapt to the growing eco-concerns of the consuming public.
The sustainability market is still in its development stage and this market presents not only uncertainties but also opportunities.
Sustainable entrepreneurship is a new research field that is still emerging. It is a multidimensional concept that encompasses economic, environmental, and social factors. From the Etsy sellers to Coca-Cola company, changing internal processes creates a ripple effect to combat social issues and mitigate climate change.
These entrepreneurs want to be part of the solution, but does this impart their profits?
A Price Worth Paying
According to a survey of American and UK consumers conducted by GlobalWebIndex, 57% said they would pay more for sustainable products.
NYU Stern’s Center for Sustainable Business research into U.S. consumers’ actual purchasing of consumer-packaged goods (CPG), using POS data contributed by IRI, found that products marketed as sustainable grew 5.6 times faster than products not marketed as sustainable (If you explain one acronym, explain them all). Despite the fact that sustainability-marketed products are 16% of the market, they delivered more than half of the market growth from 2013 to 2018, accounting for 50% of growth in the sampled CPG market (See if you can take out at least one “market”).
Promotional markers such as fair trade, non-GMO, cruelty free, and USDA organic were used in this particular study to determine sustainability-marketed products. Strict parameters were set, and on-package communication that said ‘natural’ or ‘recyclable packaging’ was not considered.
Research shows sustainable materials are more of a consideration for younger audiences, partly due to their upbringing during the climate crisis, the Great Recession, and presently, the coronavirus pandemic. Between boycotting Nike, single-use plastics, and palm oil, consumer activists have been busy.
As a new business owner trying to come up with a product or service, it’s important to pay special attention to market trends. We know sustainability is one of them. People are eating it up. Millennials and Gen Z are expecting it.
According to data analytics company Nielson’s research, 75% of Millennials are willing to pay extra for sustainable products compared to their Baby Boomer counterparts. They look to companies and brands to have sustainable products and practices. With 56% of the world’s population under the age of 34, and with Millennials focusing on eco-conscious trends, the expectation of businesses to act sustainably is rising.
Sustainability claims attract consumers who are excited to purchase eco-friendly products. Research shows sustainability-related strategies are necessary to be competitive today and even more so in the future.
So we know there’s a huge growth within the market to foster sustainable businesses practices.
How does a budding entrepreneur reap the benefit of these profits?
A Holistic Approach to Development
Here you are. An entrepreneur that educates themselves and others on global warming and the impacts that filling our landfills has on our environment. You are tuned on to consumer trends and know your target audience is all about that green lifestyle.
What’s next? Where do you go from here?
Create a businesses action plan with sustainable development as a fundamental tenet.
Sustainable development is the idea that human societies must meet their essential needs without sacrificing the ability of future generations to meet theirs. It involves a focus on economic and social development, as well as environmental protection, for generations to come.
In a market system, sustainable development requires sustainability innovation, and entrepreneurs who can deliver better products and churn profits, all while solving environmental problems, will be successful with today’s consumers.
In one recent study, researchers found that the most important factors for driving sustainable entrepreneurship were behavioral factors (such as empathy, altruism, pro-social motivation, competitive intelligence, and self-efficacy), with a weight of 49.59%. The next most important were business-related factors (such as job satisfaction, profit, and business management), which had a score of 30.26%.
These findings show sustainable entrepreneurship must be characterized by ethical principles and values, as well as satisfaction with your job, in order to actualize goals into action.
Entrepreneurs must be intrinsically driven and they must perceive that they are capable of performing the tasks required to pursue sustainable goals. Believe in yourself, hang in there, you can do it- you know the adages.
Surely, success in a new business endeavor starts with a great idea that people are going to want to spend their money on. However, what proves most important is not slapping on some buzzword to your label, but on being a person that innately cares about the environment and believing you can make a difference.
Sustainable entrepreneurs enmesh their personal objectives into the very fabric of their business model, so much so that their preferences are reflected in the company’s goals and mission statement.
It’s going to be much harder for a new company to profit off this new wave of eco-conscious consumers if their heart isn’t in it. The product or service you’re selling must be sustainable from inception to execution.
The integration of sustainability considerations in the early phases of a new venture is important.
We now know business management, or the planning, organization, management, and control of an organization’s resources, is critical to sustainable development.
But how do we maximize economic profit and social benefit?
What is a Green Business Model?
When talking about sustainability within the parameters of business, we want to look at the entire life cycle of a product, from the extraction of raw materials to production, to consumption where it can then be upcycled, recycled, or composted.
This global movement towards a circular economy involves building products that last and relocating waste from the end of the supply chain, efficiently using resources over and over again.
Eco-design involves minimizing environmental impact throughout a product’s life cycle. Think of this strategy as an approach in designing products.
One method of evaluation is the life cycle assessment (LCA). Think of this approach as a decision-making tool for developers to assess environmental impacts throughout the entire life cycle of a product.
LCA is one of the most useful methodologies to determining eco-design.
As an entrepreneur, you must first determine how, and of what material, new products will be manufactured and distributed. Development of the initial design encompasses specification of raw materials, energy inputs, purchasing specifications, hazardous materials generated, recycling of the product after consumer use, and worker health and safety.
Take for example Moon Lit by Britt. I had this idea to use old jars, a nuisance that wreaks havoc upon the kitchen cabinets of many, to create candles.
- Initial design included the carrier- an up-cycled jar. So now it came time to specify raw materials. I decided to use biodegradable soy wax and eco-friendly wicks. I also sourced ethical, organic essential oils. All of these materials had to come in recyclable or compostable packaging.
- Luckily, the energy inputs are from my own sweat and tears, and the use of some heat from a gas stove. The harm done on the environment is minimal and is in constant consideration.
- While e-commerce businesses have their own environmental impact in the way of carbon emissions (shipping by plane/truck), the product is sustainable, which brings us to packaging.
- Every single candle is packaged in up-cycled, padded envelopes (usually Amazon, that doggone conglomerate) and the candle itself is kept safe with recycled papers. See what I mean now about circular economies? I did not, myself, produce any of these things, but rather found them already produced from the earth’s materials.
- At the end of it’s cycle, once the wax is burned, the tin that held the candle wick can be recycled, and the jar can be reused for virtually any purpose! Luckily, soy wax is easy to clean with hot soap and water. I love to just pop my used candles in the oven to let the inside melt before I wash them in my sink.
How a product is made starting from the very beginning at the drawing board influences where that future waste is going to wind up.
A full LCA provides analysis of impacts along the product chain, including raw materials acquisition, material and product manufacturing, packaging, consumer use, and product disposal.
New sustainable ventures need to put considerable thought into how they are producing and sourcing products for the earth’s conservation.
More than just a trend, sustainable entrepreneurs and their practices affect the livelihood of everyone on this planet.
- Sustainable entrepreneurship involves economic, environmental, and social factors.
- We should all care about the environment: the earth is warming, biodiversity is thinning, air and water pollution are worsening. Earth is our home and we only get one.
- Consumers are choosing sustainable products. Research shows that most consumers, especially younger audiences, are more likely to buy a sustainable product. The use of promotional markers lead to an increase in profit. We are seeing exponential growth within the market for sustainable products.
- Sustainable entrepreneurs must be passionate about sustainability and believe in themselves and their product’s mission to be successful.
- Utilizing eco-design theory and a full LCA and marketing the product accordingly will set entrepreneurs up for success.
Tackling climate change, reducing waste and plastic consumption, and healing our ecosystem are important, and quite frankly our survival depends on it. For the sake of the sea turtles and your great-great-great-great grandchildren, go green!