Entrepreneurs are turning their companies green, using a range of approaches from investing in alternative energy to banning plastic forks in the pantry
Businessweek, August 7th 2009
Entrepreneurs, already at the forefront of the environmental revolution with the products they sell, also are proving to be leaders of a less visible but equally powerful trend: the transformation of their companies into lean, green operations. Some say concern for the environment is their inspiration to go green; others are looking to cut costs or trim waste. Regardless of motivation, there are “countless thousands of small businesses out there greening,” says Byron Kennard, founder and executive director of the Washington (D.C.)-based nonprofit Center for Small Business & the Environment. “It’s a technological and cultural revolution.” According to an April survey by the National Small Business Assn., 38% of small companies surveyed have invested in energy efficiency programs in the past 18 months. Some 13% had invested in alternative energy sources, 6% had purchased or leased hybrid or alternative fuel vehicles in the past 18 months, and 18% had given employees incentives to cut back on driving.
Together, these changes have the potential to make a sizable impact. Small companies account for half the country’s industrial and commercial energy use, according to Energy & Security Group, a consulting firm based in Reston, Va. Because energy-efficient improvements typically reduce consumption by 30%, entrepreneurs have the potential to reduce their collective CO2 emissions by 182.2 million tons annually—the equivalent of 36 coal-fired power plants—and to lop $30 billion off the nation’s energy bill.
Such gains don’t come easily. It takes a lot of work—and sometimes outside consultants—to figure out how best to reduce the environmental impact of a business. And while some green initiatives save money, tight credit markets can make it difficult to finance green investments. Some 52% of companies surveyed by the NSBA cited weak cash flow as the main obstacle to making improvements in energy efficiency.