Small Businesses, Too, Can Profit From Sustainability Strategies
Monday, August 27, 2007 / AS
When I'm asked, during a speech or an interview, to name some companies that are leading or lagging on sustainability, I invariably start talking about global corporations--companies like DuPont, General Electric, Unilever, Citibank, or PepsiCo who are racing to get to the top of the Dow Jones Sustainability Index, or companies like Exxon who appear either to not get it or to not care.
I often forget to mention small business, which is a serious mistake. Small business is the engine that drives economic growth, creates jobs, and provides many people with their initial view of how companies operate. Unless sustainability takes hold in businesses of three, twenty, or one hundred employees, it will not take hold at all.
If you help to run a small business, you need to be thinking about sustainability issues--and especially if one of the following five descriptions applies to you:
1. You provide goods or services to a large business. More and more large companies are “greening their supply chains” by making environmental and/or social performance a condition of sale. Wal-Mart, for example, has just imposed packaging reduction requirements on its 60,000 suppliers, many of whom are small businesses. McDonald’s has a strict supplier code of conduct that encompasses everything from the treatment of animals to the use of pesticides to child labor. You should look at some of the codes and requirements now being applied by big companies to the small firms they do business with; similar requirements may be coming your way in the near future.
2. You can benefit by being seen as part of your local economy. Many consumers are now making a conscious effort to “buy local” as a way of supporting the communities in which they reside. Locally-grown produce has long been considered fresher and of higher quality than food shipped in from parts unknown. Now concern over climate change is making people more aware of the environmental consequences of shipping food and bottled water long distances. Lots of people are shopping at local, independent stores rather than chain outlets because they feel there is more accountability. As a small business manager, you can look for ways to participate in--and benefit from--the buy-local movement.
3. You see a way to increase your profits by helping to solve environmental or social problems. Many companies whose business mission is to help solve environmental or social problems are booming. In my home state of Massachusetts, the clean-tech sector, composed primarily of small businesses, is growing at a strong clip, from solar power to biotech. Small companies like Waltham, MA-based Recycline are making successful businesses out of helping consumers and society reduce waste.
4. You see a way to reduce your costs by being more environmentally or socially conscious. Of course, small busineses, like large ones, can save money and help the planet by reducing waste and by saving water or energy, especially with the cost of fuel and waste disposal rising in many places. And because your business is relatively small and simple (compared to a global giant like GE), identifying and implementing opportunities to "green" your processes is likely to be easier for you than for a Fortune 500 company.
5. You see a way to build your business by linking it to a social or environmental cause. Many consumers like to do business with companies that share their values and are putting their money where their mouth is by supporting causes they believe in. There are all kinds of examples, involving businesses both large and small--for example, The Dancing Deer Bakery in Boston's Roxbury district donates a percentage of profits to local environmental and social causes, especially to helping the homeless.
Small businesses have many built-in advantages in the pursuit of sustainability. There are far fewer internal barriers (read: bureaucracy) to creating triple bottom line initiatives and tracking their progress in a small organization, and spreading the word among managers and employees is also easier when workers are numbered in the teens rather than the thousands.
Finding the time and the resources to get going may be the biggest challenge, but if you start by identifying a solid business case--that is, a clear and compelling argument for the profit-boosting potential of an environmental or social project--the resources can usually be found.
1 comments -
Add a comment - I often forget to mention small business, which is a serious mistake. Small business is the engine that drives economic growth, creates jobs, and provides many people with their initial view of how companies operate. Unless sustainability takes hold in businesses of three, twenty, or one hundred employees, it will not take hold at all.
If you help to run a small business, you need to be thinking about sustainability issues--and especially if one of the following five descriptions applies to you:
1. You provide goods or services to a large business. More and more large companies are “greening their supply chains” by making environmental and/or social performance a condition of sale. Wal-Mart, for example, has just imposed packaging reduction requirements on its 60,000 suppliers, many of whom are small businesses. McDonald’s has a strict supplier code of conduct that encompasses everything from the treatment of animals to the use of pesticides to child labor. You should look at some of the codes and requirements now being applied by big companies to the small firms they do business with; similar requirements may be coming your way in the near future.
2. You can benefit by being seen as part of your local economy. Many consumers are now making a conscious effort to “buy local” as a way of supporting the communities in which they reside. Locally-grown produce has long been considered fresher and of higher quality than food shipped in from parts unknown. Now concern over climate change is making people more aware of the environmental consequences of shipping food and bottled water long distances. Lots of people are shopping at local, independent stores rather than chain outlets because they feel there is more accountability. As a small business manager, you can look for ways to participate in--and benefit from--the buy-local movement.
3. You see a way to increase your profits by helping to solve environmental or social problems. Many companies whose business mission is to help solve environmental or social problems are booming. In my home state of Massachusetts, the clean-tech sector, composed primarily of small businesses, is growing at a strong clip, from solar power to biotech. Small companies like Waltham, MA-based Recycline are making successful businesses out of helping consumers and society reduce waste.
4. You see a way to reduce your costs by being more environmentally or socially conscious. Of course, small busineses, like large ones, can save money and help the planet by reducing waste and by saving water or energy, especially with the cost of fuel and waste disposal rising in many places. And because your business is relatively small and simple (compared to a global giant like GE), identifying and implementing opportunities to "green" your processes is likely to be easier for you than for a Fortune 500 company.
5. You see a way to build your business by linking it to a social or environmental cause. Many consumers like to do business with companies that share their values and are putting their money where their mouth is by supporting causes they believe in. There are all kinds of examples, involving businesses both large and small--for example, The Dancing Deer Bakery in Boston's Roxbury district donates a percentage of profits to local environmental and social causes, especially to helping the homeless.
Small businesses have many built-in advantages in the pursuit of sustainability. There are far fewer internal barriers (read: bureaucracy) to creating triple bottom line initiatives and tracking their progress in a small organization, and spreading the word among managers and employees is also easier when workers are numbered in the teens rather than the thousands.
Finding the time and the resources to get going may be the biggest challenge, but if you start by identifying a solid business case--that is, a clear and compelling argument for the profit-boosting potential of an environmental or social project--the resources can usually be found.
Labels: Dancing Deer, McDonalds, Recycline, Small Business, Supply Chain, Wal-Mart
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By 
luis, on
August 30, 2007 2:41 PM
Great post!
If the economics don't work, recycling efforts won't either.
As our little contribution to make this economics of recycling more appealing, http://LivePaths.com blogs about people and companies that make money selling recycled or reused items, provide green services or help us reduce our dependency on non renewable resources.