Going green—making environmentally sound decisions—seems to be a growing trend among small businesses. The results from Office Depot's Small Business Index report in 2012 found that 61 percent of small businesses were actively trying to go greener and 70 percent planned on going green. Besides the obvious benefits of conserving our limited natural resources, business owners are also discovering that going green doesn't hurt their bottom line. In fact, evidence shows that being environmentally responsible can not only boost company sales, but also create new product categories.
A competitive advantage
Whether your business is taking its first steps toward going green—such as instituting a company-wide recycling program—or deeply embraces sustainability as a core part of its mission, there is plenty of assistance available to accelerate your progress. "We help a range of businesses connect to the growing green marketplace and reach a larger audience," says Misha Clive, marketing and communications manager for the Green Business Network, a Washington, D.C.-based not-for-profit.
One way is through Green America's Green Business Certification, designed especially for small and micro-businesses. The certification is awarded to businesses that are environmentally responsible, socially equitable to its employees and the larger community, and transparent in its business practices. "Our certification program is industry specific, so businesses can get specific advice and resources on the next steps to take to improve the sustainability of their operations," Clive says.
While some skeptics might dismiss this as naive do-goodism, the reality is quite different. A Green America report revealed that 76 percent of small businesses that identified themselves as doing something green said that they saw a profit from their green products and services. "Green consumers are more willing to pay a little bit extra, and that helps with profit margins," Clive explains. "Green businesses actually save on overhead and increase their overall bottom line through their environmentally sound practices."
The report also found that 79 percent of small businesses surveyed said that going green gave them a competitive advantage because it helped them distinguish themselves to their customers—and their customers, in turn, become brand ambassadors. For example, South Dakota-based Native American Natural Foods sells bison cranberry jerky made from sustainably raised grass-fed bison and uses some of the profits to invest in the local community. In just one year, Clive notes sales jumped to $1.5 million through customer loyalty.
"Can you imagine that happening to some ordinary beef jerky that you buy in a convenience store? I don't think it's likely," Clive says. "It happened because their customers cared about what their business was. The jerky is now distributed in 4,500 stores. That's the advantage of being a green business."
A valuable exchange
Sometimes the opportunities from green business ventures aren’t always so obvious. Consider Enviro-Log, a Georgia-based business that manufactures environmentally friendly firelogs made by recycling waxed old corrugated containers. Instead of accumulating in landfills, the containers are turned into clean-burning firelogs that generate 50 percent more energy per pound than wood and release 80 percent less carbon monoxide emissions.
"We felt the environmental opportunity coupled with the retail opportunity made a very good green platform business," says Ross McRoy, president of Enviro-Log.
Enviro-Log will haul used waxed containers from retailers and supermarkets at no charge and, through a patented process, produce the firelogs. Still, educating retailers and consumers on the environmental advantages of switching to a new product takes effort.
Results seem to be paying off. McRoy doesn't share actual figures, but he says that sales are growing annually by double digits and that the number of their retail partners is expanding. "It might take you three rotations in front of a retailer to establish your pricing and your message," McRoy says. "It is an education process. We always say we have to do the work for them, so they can see the picture and see what we see."
Businesses where sustainability and eco-consciousness were part of the mission from the beginning will likely foster a culture that encourages innovative solutions and produces healthy profits, too.
Case in point: New Belgium Brewing, the third-largest brewer of craft beer and the eighth-largest brewer in the country. Founded in 1991 by an electrical engineer and a social worker, the Colorado-based company is 100-percent employee owned by its more than 500 workers.
New Belgium generates power through renewable waste methods, reducing their carbon footprint. "Energy creation had about a two-year payback for us," says Katie Wallace, sustainability specialist at New Belgium. "Ever since 2004, we've been making money and saving money on that. We're basically offsetting coal-powered electricity from our local utility."
New Belgium educates its employees on financials and sustainability metrics, and expects them to contribute to the process of saving money and resources. Sometimes even a small change can have huge repercussions.
For example, two employees came up with the idea of removing the cardboard dividers from the twelve-pack beer carriers. The move saved the company hundreds of thousands of dollars every year and hundreds of tons of cardboard. Since the dividers were inserted by hand, eliminating them also eliminated the leading cause of downtime on the packaging line and amped up productivity.
"Our CFO will tell you any day that we are profitable not in spite of our environmental efforts but because of them," Wallace explains. "We also find that engaging our co-workers in this effort and dedicating ourselves to a higher cause that's beyond making beer and making money and actually makes the world a better place is very fulfilling. We have a 97-percent retention rate—which gives us quite a bit of money that otherwise would be spent on turnover, training, and recruiting."
Not a bad way to help save the planet.