ask the expert | How to Grow a Green Business

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today we have a guest post from a fellow mum in biz: laura trotta from sustainababy. i am often asked "do you have any advice for those of us who want to have a green business?" so i approached laura to help us out, knowing her extensive expertise and tangible passion for eco-living & business!

It’s no secret that consumers are becoming more environmentally aware and are increasingly choosing to support businesses with strong green credentials.

Consumer demand for green products has continued to increase despite the global financial crisis and subsequent economic downturn.[i] Although green start up businesses seem to be popping up here and there, established Australian small businesses still have some way to go to address this trend. Reducing environmental impacts only ranked 13 out of 15 in the drivers of innovation for small businesses in the Australian Governments Key Statistics for Small Businesses 2011 report.

Clearly this indicates that many Australian small businesses are yet to realise that caring for the environment and growing a successful business are not mutually exclusive. Successful businesses of the future will need to be proficient at both to survive and smart business owners will not wait for that future to arrive.

Benefits of Operating a Green Business

“Going green” now makes perfect business sense. By improving the health of our planet you will also improve the health of your organisation in the following areas:

1. Increased employee satisfaction

Many employees take pride in working for a business that is responsible in its resource use and ‘gives back’ to society. High employee morale yields better efficiencies and retention which both help your bottom line.

2. Improved efficiency and profitability

Identifying and eliminating waste in your organisation can substantially improve your profitability. It can be as simple as reducing your energy or water consumption or as complex as identifying opportunities to reprocess waste products in your production line into sellable products.

3. Improved marketing capacity

Businesses with strong environmental credentials throughout all their processes have maximum marketing advantage and are best placed to attract new green consumers and establish new markets.

4. Improved ability to mitigate risk

A green business focus enables your business to proactively address new environmental requirements from vendors and suppliers, and anticipate future legislative requirements.

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(image source)

How to Turn Your Business Green

So whether you’re looking to start a new green business or improve the environmental performance of your existing enterprise, the following three areas are a good place to start.

1. Support environmental charities

Naturally, the quickest and easiest way for a small business to gain some eco credibility is to support environmental charities. Support can either be monetary donations or volunteer hours. There are many registered non profit organisations with a focus on conservation and environment and range from the well known WWF and Greenpeace to the more regional focussed OzHarvest Adelaide and Reef Check Australia. Be aware though that the more discerning green consumer is not easily fooled. If this initiative alone constitutes your business’s eco credentials, it may just serve to buy you some time while you review your business processes and make some adjustments to truly improve your environmental performance.

2. Offset your carbon emissions

There are a growing number of organisations that assist businesses to offset their carbon emissions. Companies such as Carbon Neutral can facilitate the calculation of your carbon emissions from activities such as vehicle usage and office/warehouse power consumption and will purchase carbon offsets on your behalf. Carbon offsets are credits for reductions in greenhouse gas emissions made at another location, such as wind farms which create renewable energy and reduce the need for fossil-fuel powered energy.

Similar to supporting environmental charities, offsetting your business’s carbon emissions should be seen as one component of your environmental program. It is best combined with a strategy that focuses on reducing energy consumption within business processes.

3. Review your Business Processes

To effectively improve your business environmental performance and efficiencies you will need to cast a critical eye over your business processes. This can be undertaken by the following steps:

  1. Construct a map of your business processes
  2. Identify inputs, outputs and wastes for each process step
  3. Review each of the inputs, outputs and wastes and question if it can be replaced by a more eco-friendly alternative or even eliminated.
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The more complex your business, the more involved this process will be. A simplified example of this process for the procurement and dispatch of goods by an online retail store is shown below.

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Opportunities for the above business to reduce its wastes include:

  • Working with all suppliers to place orders electronically (eliminates paper order form)
  • Reusing packaging materials from incoming goods in customer orders and recycling boxes that cannot be reused. Where virgin packaging materials are required, opt for eco-friendlier options such as biodegradable bubble wrap and recycled brown kraft paper.
  • Recycling office paper and printer cartridges.

Opportunities for the above business to reduce its resource usage include:

  • Purchasing electricity from renewable sources or installing solar energy panels on premise
  • Installing timers on lights and fans (e.g. in bathroom) so automatically turn off when not in use
  • Increasing natural light on premise and install energy-efficient light bulbs
  • Reducing double handling, packaging and transport of goods by drop shipping large items (e.g. furniture)
  • Dispatch orders on every other day to reduce transport trips (e.g. courier pick up or trips to the Post Office)
  • Using green courier companies for the dispatch of orders
  • Installing a compost bin in kitchen area for food scraps.

Businesses who manufacture their goods will have even more scope for improvement than a simple retail store. If your business manufactures goods, questions you should be asking to improve your environmental performance include:

  • How can our product/s be made more eco-friendly? E.g. change from conventional plastic to BPA-free plastic, conventional cotton to organic cotton.
  • How can our products be best packaged to minimise packaging materials required during transportation? Can we flat pack? Do we even need packaging?
  • Is there a local manufacturing option available that will minimise the distance (and emissions) of transporting our goods from factory to warehouse?
  • What wastes (e.g. offcuts) are produced and can these by made into a sellable product or recycled in the process?

There are several options to help you propel your business into the eco era including supporting environmental charities and offsetting your carbon emissions. However, it is only when you start reviewing the individual processes within your business to find greener alternatives will you be well on your way to growing a green business. Good luck!

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About the Author:

Laura Trotta (B.Eng (Environmental), M.Sc (Environmental Chemistry)) worked as an environmental engineer for large organisations including BHP Billiton and Western Mining Corporation for 11 years prior to establishing her green business Sustainababy when she became a mother. Sustainababy is an online eco parenting resource for parents wishing to lead a more sustainable lifestyle. Sustainababy is a Bronze Environmental Supporter of Trees for Life and was the first online retailer in Australia to offers customers the choice to offset emissions from the delivery of their order and was selected as a finalist in the AusMumpreneur 2011 Awards Eco-Friendly Business Category within its first year of operation. Laura lives in regional South Australia with her husband Paul, son Matthew (2) and one on the way.

[i] Boston Consulting Group (2009) Capturing the Advantage for Consumer Companies, 2009, p7