profitable green strategies for small enterprises
DESCRIPTION
This 2010 slide presentation was presented to an SBA development center group by Chris Yalonis. It covers the business case for sustainability in small businesses.TRANSCRIPT
Profitable Green Strategies for Small Enterprises
Presented to SBDC NxLevel Class, San Rafael, 11/30/2010
By: Chris Yalonis, Managing Partner, Sustainametrics, 415-309-0331
Content Introduction
The business case for SME sustainability
The new model of triple bottom line
The ROI of going green
Entrepreneurs leverage the sustainability wave
Best sustainable practices Cost savings Eco-label/certifications Avoid green-washing Product design and lifecycle management
References
About Sustainametrics Sustainability intelligence and consulting firm
helping SME’s, colleges and government entities green their operations and products/services.
Systems approach that leverages interconnections between economic, social, environmental performance
Our Core Competencies Sustainability plan development Green Certification Green Branding Materials, Water and Waste Management Energy and Greenhouse Gas Management
A Mega-Trend
(c) 2008 Foundation for a
Sustainable C
omm
unity
In business news everywhere…
Green and Sustainable(c) 2008 F
oundation for a S
ustainable Com
munity
New MetricsSustainability and the Triple Bottom Line
(c) 2008 Foundation for a Sustainable Community
Energy, Water Materials, Emissions and Waste, Operational and Design Efficiencies, New Project, Service Opportunities, Life Systems Impact
Revenue growthProductivityProfit marginReturn on InvestmentCost of capitalRisk ManagementValuation of enterpriseAppeal to investors
Community and Social impactHealth and safetyFair compensationEquality opportunity education Recognition
What is a Sustainable Enterprise?
Sustainable enterprise employs profitable strategies that approach social and environmental challenges as business opportunities and minimize negative social and environmental impacts.
Sustainable enterprises measure success in terms of “triple bottom line” value
The Entrepreneurial Spirit
See a need to fill
Self-starter, independent
Desire to grow financially
Thrive with change
Make connections few others see
Driven to persevere
Aware of strengths & weaknesses
Green Rush
$Trillion energy market
Public/Private Partnerships
Vision for People, Planet, Profits
Awareness of Systems
Attributes of Entrepreneurs . . . And Sustainability
Cover collage from Deloitte & Touche “Tax Wednesday” seminar, March 26, 2008
Conscious Consumers: Capture or Lose
• Healthy, local food movement• Increasingly “Freak Weather”:
Katrina, Russian fires, Pakistan floods, glacial disappearance
• Rising energy prices-peak everything
• 70-80% of consumers say they are switching to “green” companies, 20% actually did in 2009
• US LOHAS sector $420B by 2010 $845B by 2015
• 40% of MBA grads rated CSR as a an “extremely” or “very” important company reputation measure when job hunting (Hill & Knowlton Jan 08)
• 92% of students and entry-level hires seek an environmentally friendly company (MonsterTRAK.com survey, Nov 07)
• 83% of employees in G7 countries say company’s positive CSR reputation increases their loyalty and motivation (GlobeScan 2006)
The Race for Talent
IntangiblesNonfinancials
Reputation
TangiblesFinancials
29%
71%
Arthur D. Little, The Business Case for Corporate Citizenship
Company Value “Iceberg”: 2009
Sustainability indices equal or outperform the market: DJSI, Jantzi, FTSE4GOOD
SRI Funds Growing US SRI assets grew 258% from 1995 to $2.3T in 2005
DJSI Jantzi Social Index
Sustainability Investing is Not a Sacrifice
Sustainability Leaders A survey of Newsweek’s greenest companies
HP
•Strong GhG & toxic materials reduction program•First major IT company to report emissions associated with supply chain•Also very strong CSR efforts.
High Tech
•Ambitious emissions and waste reduction goals•Pursuing green lodging designation for all properties•Installing solar panels in parks•Extensive CSR efforts
Tourism
GE
•Leader in wind turbines, carbon fiber engines, CFLs, & high efficiency appliances•Lean manufacturing•Aggressive GhG reduction goals.•Supply chain impact
Manufacturing
Sustainability Strategies: Sources of Competitive Advantage
Marketing & Sales
• Increased sales • New product opportunities• Access to new markets• Improved customer loyalty, brand recognition
Operations• Reduced operating costs (energy, waste, raw materials)• Improved operational efficiencies• Resource productivity• Reduced liabilities
Finance &Accounting
• Increased access to capital• Improved investor relations
HR
• Improved productivity & morale• Lower turnover, absenteeism, accidents
Communication
• Improved corporate reputation• License to operate• Reduced political/ regulatory costs
•Organizational learning•New business models
& services•Strategic competitive
advantages
Corporate Strategy
Economic Best Practices Economic
Planning Develop and update Business Plan, succession plan and marketing plan Integrate sustainable principles into plan
Performance Invest in Capital Grow Profits Positive Cash Flow, manage debt
Practices Invest in Employee Professional Development Use Standard Accounting Principles
Environmental Best PracticesThe 4 W’s of Green Cost Savings Watts (Energy)
Review Gas and Electric Bill for the purpose of reducing consumption Adopt written goals about reducing energy consumption
Water Review monthly bills for the purpose of conservation Install new or retro fit appliances
Waste Measure production Purchase/sell products with reduced packaging Reuse items and recycle as much as you can
Wheels (Transportation) Incentives/Reduce barriers for use of alternate modes of transportation Explore telecommuting/online meetings/teleconferencing
Social Best Practices Social Responsibility
Family Friendly Policies Paid or unpaid leave for birth/adoption of a child Paid or unpaid leave for care of a dependant Provide a group health plan for employee participation
Civic Participation/Corporate Responsibility Make cash or in-kind contributions to local non-profits Match Employee contributions to local organizations Internship opportunities for local youth
Volunteerism Give employees time off to volunteer in schools or with agencies 100% of senior management serve on the board of a local non-profit.
(c) 2008 Foundation for a
Sustainable C
omm
unity
Local Showcases
Fairfax Fairfax Green™, by Fairfax Lumber & Hardware, is a program to provide green building products and information to our customers.
Environmentally friendly printing and graphic communications company dedicated to helping individuals and organizations promote themselves in more sustainable ways.
* using state-of-the-art recycled papers...* printing by a certified environmentally responsible company...* and shipped directly to you with zero climate impact
Green Branding
• Green Branding is critical to leverage environmental efforts into increased revenues
Great Branding Is transparent, engages deeply with customers, is meaningful and authentic…
People will forget what you say, but they never forget the way you make them feel
… becomes iconic
Green Certification
Green Certification adds credibility to your brand and validates environmental efforts.
Sustainability plan and program set-up for Green Seal
Green-washing Pitfalls
Hidden trade-offs: i.e.: Organic fruit from Peru
No proof: Need 3rd party verification
Over-generalized terminology: “green”, “eco-”, “natural”, “earth-friendly” sounds suspicious
Fibbing: Jumping the gun on your certification
Lesser of two evils: ie: lemon-scented ammonia
Lifecycle Management
Clorox Greenworks
Through market research, product formula tests, uncovered untapped latent market for fume free cleaning products
• Sustainability is smart business
• Important stakeholders’ expectations are rising
• New market forces & risks are in play
• Relevant to existing business priorities
• Can protect & enhance company value
• Measure ROI, savings
• Many willing, helpful partners
• Opportunity for leadership, avoid green-washing
Takeaways…
References Inspiration
Blessed Unrest by Paul Hawken Green to Gold, Andrew Winston
How to green your business The Truth about Green Business by Gil Friend The Green Business Guide by Glenn Bachman
Keep current www.greenbiz.com www.sustainablelifemedia.com
Green product guides www,goodguide.com
How will you become as big as your dreams?
Green Biz Plan Competition Criterion