In elementary school, we were all taught the importance of recycling – collecting newspapers or bottles to start eco-friendly daily habits. Nowadays, universities across the nation engage in sustainability competitions and organize campus sustainability leaders. My own university, the University of Virginia (Wahoowa!), organized events like the Dorm Energy Race in which dorms compete to use the least energy, or the Game Day Challenge in which attendees to a football game are encouraged to recycle. These types of events are emulated throughout various American universities. With buzz phrases like “Go Green” or products ranging from cars to detergents, green practices are a growing addition to our everyday vocabulary and purchasing habits. For example, an ABC award show that recognizes individual and team athletic achievements, the ESPY’s, just went green. In 2015 and 2016, founder and CEO of Three Squares Inc. and former NWBC council member, Jaime Nack, was on site with ESPN greening the ESPY awards of that year.
But, in regards to your business, does the green movement have an economic payoff?
Out of 18 countries, including the U.S., surveyed in the National Geographic “Greendex” report, consumers “tend to think that environmentally friendly product premiums are worth the extra cost.”[1] Of course, value for sustainability and eco-friendly goods does not necessarily translate into action, but a Nielsen study shows that in 2015, 72% of Generation Z (for more about Generation Z read up on a post by NWBC Fellow, Kia Amirkiaee) respondents are “willing to pay more for products and services that come from companies who are committed to positive social and environmental impact.”[2] Women on average are also more inclined to purchase ecofriendly products, and think about climate change on a personal level. Given how women view ecofriendly products, and that women control account for about $7 trillion[3] of all American spending and control 80%[4] of household purchases in developed countries, savvy business owners who look toward long-term trends should look toward green entrepreneurship.
Let’s bust a myth: green businesses practices don’t always levy more costs for businesses. In fact, businesses can save from pursuing sustainability. Results from a Women In Green focus group show that the participants increasingly associated “going green” with the belief that it is a long-term cost savings strategy. Reduction in energy usage as well as paper use reduction, combined with the conservative use of other materials can cut businesses’ costs. This explains why larger companies and corporations use environmental consulting businesses and management platforms for waste management and resource conservation. A 2016 CDP report estimates that by 2030 the global cost of climate change impact will reach between $2 trillion and $4 trillion. This sharply contrasts an estimate from Global Industry Analysts that by 2020 the global market for green building alone will reach $529 billion. Economic opportunities for green entrepreneurship extend from green building to a diverse and vast range of untapped market entities, but this is just one example.
When it comes to specific receipts and profits for green businesses, we still need more data. This field is still so new that data is scarce, but it is clear that economic potential and opportunity exists within green entrepreneurship. And, as E. Freya William’s book, Green Giants: How Smart Companies Turn Sustainability into Billion-Dollar Businesses, shows, prominent businesses have started to go green in order to get “green.” Williams identifies that nine companies such as Chipotle, Ikea, Toyota (with its Prius car), and others, have generated combined revenues of more than $100 billion from their sustainable products or services.
Green is an exciting arena, both for market growth and opportunity. Small business owners, particularly women, should keep an eye on the developments and innovations possible within green entrepreneurship. Look for an upcoming report detailing the opportunities within green entrepreneurship and why women should take advantage of the green economy. It will also include advice from successful, experienced women in the green economy, and interesting need-to-knows for the aspiring green entrepreneurs, like how most sustainable practices help businesses cut costs!
Interviewees for this report include industry experts and green entrepreneurs like Jamie Nack, founder of the Women in Green Forum. Others include: Kari Warberg Block, founder and CEO of EarthKind and Susan Hunt Stevens founder and CEO of WeSpire, to name a few. Throughout the course of this research on green entrepreneurship, the qualitative data and insights the various women interviewed for this report help build an interesting case and perspective on why women should engage green entrepreneurship and what type of economic opportunity exists within green enterprises.
Tara Razjouyan is a summer research fellow for the NWBC and a master’s candidate of leadership and public policy at the Frank Batten School of Leadership and Public Policy at the University of Virginia.
[1] Greendex 2014: Consumer Choice and the Environment – A Worldwide Tracking Survey. (2014, September). Retrieved from http://images.nationalgeographic.com/wpf/media-content/file/NGS_2014_Gre…
[2] GREEN GENERATION: MILLENNIALS SAY SUSTAINABILITY IS A SHOPPING PRIORITY. (2015, November 05). Retrieved August 11, 2016, from http://www.nielsen.com/us/en/insights/news/2015/green-generation-millenn…
[3] The Women’s Business Enterprise National Council and WEConnect International Introduce the Women Owned Business Logo Quote by MiKaela Wardlaw Lemmon, 2014.
[4] Stevens, C. (2010, April). Are Women the Key to Sustainable Development? Retrieved from http://www.bu.edu/pardee/files/2010/04/UNsdkp003fsingle.pdf