WHAT IS GREEN ENTREPRENEURSHIP?
A business is an activity of buying and selling goods and services to make a profit (i.e., having an income or revenue that is greater than costs).
All businesses must be financially viable. Without this basic pre-condition, they cannot sustain themselves, pay their staff, and continue to produce products or offer services to the market. Some businesses ONLY care about this.
Or they may only care about their staff’s well-being or their environmental impact where it affects their production, reputation, and sales, and therefore, their profits.
SO WHERE DOES SUSTAINABILITY FIT IN?
Sustainable development (and sustainable business development) has been defined in many ways. A frequently quoted definition is: “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
In the past, the development of businesses, and the economic growth they drive, have generally been unsustainable from an environmental perspective. Fossil fuels, including oil, diesel, kerosene, and natural gas, which the current economic system depends on, are finite. Burning them for energy damages the environment and contributes to climate change.
Extractive industries, such as logging and mining, remove resources in minutes that took hundreds of millions of years to form. Almost everything we buy is packaged in plastics that do not decompose, but will stay in landfills, or worse, in oceans, long after the person who used them is gone.
Businesses must be part of the solution to these problems. A sustainable business strives to balance the economic (financial), social (people), and environmental (biodiversity, ecosystems) benefits of the business as part of its core business objective. For a business to be sustainable, it must not exploit resources or people to improve profit margins.
A sustainable business knows that if it depletes the resources that it is using faster than they can be generated, it cannot go on indefinitely. Similarly, viewing itself as part of the broader community, it ensures that its staff are paid fairly and have a good quality of life.
WHAT IS A GREEN BUSINESS?
There is no single definition of a green business, but generally, it’s a business whose core business model addresses an environmental or social issue – this is, it improves energy or resource efficiency, reduces greenhouse gas emissions, decreases waste or pollution, protects or restores ecosystems, promotes local culture, or supports communities.
A green business will typically do any or all of the following:
- Incorporate principles of sustainability into its business decisions and actively monitor them.
- Pay staff a fair wage for the work they do and ensure that they are able to maintain a good work-life balance.
- Maximise the social benefits of the business (e.g., by employing marginalised groups). Some businesses set up foundations to assist with this – but a sustainable business doesn’t confine its social activities just to charitable donations – it looks for every opportunity to increase the social benefits of the business in its day-to-day operations.
- Supply environmentally friendly and/or local products and services that replace demand for non-green or imported products and services.
- Help its community become more sustainable (e.g., by reducing energy use or water use, or reducing waste or pollution).
- Make efforts to reduce resource use (energy, water, materials), and replenish, enhance, or substitute an environmental resource that is used by the business (e.g., replanting trees, enhancing soil fertility, using renewable energy).
- Make an enduring commitment to environmental principles in its business operations. These will often be detailed in a publicly available and regularly updated Sustainability or Environmental Policy
What is a social enterprise?
A social enterprise exists to generate revenue (and sometimes profits) to sustain socially-beneficial activities. A social enterprise can be for-profit or non-profit. At its core is a purpose to improve lives and/or the environment. It has determined that it can best do that by creating a stream of revenue from producing and selling products or services to sustain its activities and programmes.
The difference between a social enterprise and a green business largely stems from the motivations behind their existence rather than what they do. As a hypothetical example, two businesses that produce construction material from crushing recycled glass have been established with different motivations. Business A has seen the amount of glass going to the landfill and decided to explore ways to address this issue.
They have looked at various uses for recycled glass – repurposing the glass into other products such as vases, lights, and jewellery, and crushing it for use as an aggregate in the construction sector. Weighing these different options, Business A decides that crushing glass for construction is the best business solution to this waste management issue.
Alternatively, Business B developed because the founders wanted to find employment for young unemployed labourers in their neighbourhood and developing a glass crushing business is a viable option.
These motivational differences mean that the two businesses may make very different strategic decisions. For instance, if the demand for construction material changes so that crushing glass for construction products is no longer viable, Business A may consider repurposing recycled glass into other products, but Business B may decide to stop recycling and crushing glass and look for other options to employ labourers. In this example, Business A is mainly a green business, while Business B is a social enterprise.
Video 1: https://youtu.be/m9AS6KT7a5Y
Video 2: https://youtu.be/twGev010Zwc