Going green is a big business trend, so big in fact that it’s not one trend but several. Going green will not go away, but the various trends within the green business movement will change direction, creating opportunities for new products and new businesses. Looking forward, here are five green trends that entrepreneurs can capitalize on to make money while making a difference.
Going mainstream
Early green consumers were true green believers who were so devoted to the cause they did not worry about the price of green products. Being green can still command a premium, but as green goes mainstream and reaches more consumers it is expanding into products that compete with non-green products head to head. Being green is an added feature, but not the only one in products like the Prius, compact fluorescent light bulbs, and green cleaning products like Green Works.
One consequence of the shift is that green products become less about sacrifice and moral virtue, and more about having better qualities than the competition, providing overall value. They become more about providing efficient heating and insulation that save money, and less about wearing sweaters indoors on cold days.
How to capitalize on it: Find a product or service and make a competitive greener version of it that provides good value for consumers and the environment.
Examples of Opportunities: Eco-friendly and healthy fast food like Zen Burger, or fuel-efficient green car sales
The Ultra Greens
Even as some products target the mainstream market, others are moving to distinguish themselves by being ultra-green, raising the green bar by setting their goal as zero waste, no net greenhouse gas emissions, 100% sustainable, cradle to cradle and fair trade certified, and all around great products. No business is fully sustainable yet, but green businesses are declaring these ultra-green goals as their own, moving to distinguish themselves from more moderately green products.
Ultra-green products target ultra-green consumers. Price is less of an issue for these products and having solid green credentials is more of an issue.
How to capitalize on it: Take an existing moderately green product, and see how it could be greener. Build a café that is greener than Starbucks, produce food that is not just organic, but organic, locally grown, using sustainable agriculture methods, and with less of a carbon footprint.
Examples of Opportunities: Organic and local food, or low-carbon groceries
Becoming mandated
More and more eco-products are the result of regulatory mandates by governments at various levels encouraging the growth of green products to help both the environment and business. Growth in the markets for reusable shopping bags, low-flow toilets, and cool roofs are all being driven by government mandates, at the local, state and national level.
Climate change legislation will be a biggie, and there is a growing consensus that the US government will take action on climate change in the next few years. Government action on climate change in a cap and trade system would grow carbon markets to be worth hundreds of billions or even trillions of dollars. You don’t move trillions of dollars from one place to another in the economy without creating a great deal of opportunity along the way.
How to capitalize on it: Look for products that are already being mandated elsewhere (other states, different countries) and see how the trend will grow into new regions. The mandates for reusable shopping bags are likely to expand to more of the US and other countries. Take-back programs for e-waste, mandated reductions in landfill waste, and renewable energy mandates are additional opportunities.
Examples of Opportunities: Reusable shopping bags, cool roof installation, or green plumber installing water conservation hardware.
Green as social justice
Going green means different things to different people. For many people green is all about the impact of products and services on the planet. Increasingly though going green is also about the people we share our planet with. The impact of products on society, improving the lives of people, is increasingly important as one measure of their greenness. If green is going to be mainstream it transcends borders, and cannot merely export pollution or problems to other countries.
How to capitalize on it: Help companies examine and improve their supply chains to include information on human capital, the people involved in the process. Find ways to label and certify a broader range of products for their impact on people. Replicate what fair trade has done for coffee in other products. Help people in developing countries to lead healthier, more productive lives.
Examples of Opportunities: Environmental microfinance, green collar job training, or renewable energy for developing countries
Certification and Transparency
The rapid growth of green business is not without its challenges, including the scepticism of some green consumers toward increasing numbers of companies and products claiming to be green. If greenwashing is the problem, then transparency and certification are part of the solution. First, know where you stand, auditing your business’s impact on the environment and on people. Then, be open and honest in reporting this to others, providing numbers and not just pretty pictures in brochures.
How to capitalize on it: Find better ways to measure your environmental progress, certify your greenness, and then report on your progress. If you are a green business, become certified with one of the existing schemes. If the existing schemes do not cover your business, there might be an opportunity to improve them or to create a new certification.
Examples of Opportunities: Green building certification, auditing and certifying green business practices, or sustainability reporting
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Recent Comments | 5 Total
November 9, 2008 at 8:46pm by Jeffrey McCloskey
It’s my belief that in order for the Green Movement to be sustainable, there needs to be both significant transparency with respect to their claims and reporting. It needs to be substantiated with solid evidence with metrics and transparent reporting. Today’s consumers and stakeholders are much more engaged than those of past generations. If you make any claims about ‘How green’ you are – you had better have the data to back it up.
While the mandated take-back recycling of e-waste products is a great green initiative, I am very concerned about the transparency of the industry. Both BusinessWeek and 60 Minutes have covered this topic with in great detail within the past several weeks. I’ve had the opportunity to really see the darker side of the e-recycling catastrophe. While both the companies and communities participating in these programs are doing the ethical thing, much of this waste is not being disposed of properly. It is typically brokered by e-recycling middle-men which ship this waste to overseas processing centers. Should these groups be more accountable to their stakeholders? Are they really participating in ethical business practices by displacing their responsibilities? What can we do as stakeholders to creating more transparency of these practices? I think we need to hold these organizations more accountable for their efforts in e-waste recycling. We need 21st century transparency for a 21 century problem.
Jeffrey McCloskey
Carey Business School
November 10, 2008 at 11:57pm by Sampath Srivatsan
Going-Green” is being socialized more now in the business arena. Why do we think we are talking about this today’s world? It is time we as human beings have realized that our ultra modern style of living and globalization has caused huge impacts to our planet earth. Now we as residents of the planet feel that we are morally responsible for this degradation in the planet health and trying to clean up our acts. Adapting green initiative is like doing the “right thing”. As Glen rightly said the Green initiatives provide business opportunities and the organizations can be proud that they are good corporate citizens who are morally responsible in doing the right thing for the company as well as the society around them. It also improves the branding value of their products which are eco-friendly too. I agree with Jeff, that we need to have good metrics and transparency in reporting for green movement to be sustainable. Also there need to need good stringent policies around electronic disposal and if there arise a situation, the e- recycling middle men are certainly answerable to the customers and stakeholders.
The price for going green is costlier. Can we exercise this in the current economy?
It is a question that every organization needs to question itself, put forth its stand to its stakeholders and customers. Rest lies in the hands of the customer…
November 14, 2008 at 5:15pm by Jeffrey Krasney
At a time when the economy of the US is more than sputtering (witness the US auto manufacturer’s request of assistance from the government), the present offers a time of unprecedented challenges to combat high energy prices; depleted natural resources; volatile sources from foreign oil; record deficits and environmental challenges. A rhetorical question we must ask of ourselves and our business and political leaders is whether we will embrace such a new; but yet, unexplored world; or will we choose the easy solution; that is, to continue heading in the same direction on an unstable and often rocky path, we just traveled. As recently as a decade ago, most green technologies were far more expensive to implement than the current fossil fuel (carbon-based) technology. Since the 1970’s (and the intervention of OPEC’s cartel), the cost of fossil fuels has moved in a continuous upward direction; yet, nevertheless, often experiencing many unexpected and sometimes wild gyrations. For those individuals setting strategy for their companies, I suspect planning an energy budget over a five-year time line duration has not only been challenging, but also highly problematic. For example, those leaders and CEO’s leading the airline and auto manufacturing industry, are often saddled with uncertain fuel costs; when budgetary constraints are subject to the vagaries of the world’s oil and gas commodity markets. Today, the opportunity for businesses; organizations and customers to purchase a certain percentage of their energy (and electricity) from green-based sources; with the guarantee of a “locked-in”and/or consistent price assurance – should be viewed as a “no-brainer.” Such an opportunity for businesses to create economies of scale may also become a fixed cost fundamental on the balance sheet; that is, if efficiencies improve and production volumes are increased. Finally, it is possible, even if the the thought may remain slightly speculative that if going-green cost trends are maximized, a Moore’s Law for green technology; that is, a trend of declining costs may further drive down costs. As one GE vice-president expressed, “Coal, natural gas, and oil costs move in directions that can be hard to predict.” Thus, the opportunity to engage and create dynamic, lucrative businesses for those established companies, entrepreneurs and investors – awaits; and offers to those who have prescient vision more than empty promises; but rather, prosperity and profits.