This article is written by guest author Didem Oner Levy
What does it mean being a green entrepreneur, when did this type of business start, and does it pay to go green?
Green entrepreneurship is used to define the path of green startups which adopt a sustainable and more environmentally friendly approach to business, offering effective solutions to social or environmental problems.
From this definition, it is possible to mistake it for a social enterprise. However, this is not what green entrepreneurship is about as the motivation behind it is still business-focused.
Liz Walley and David Taylor from Manchester Metropolitan University emphasise the key role that green entrepreneurs play in becoming a sustainable society, and present four ideal types of such business persons in their paper:
- Innovative opportunists: profits-driven
- Visionary champions: value-driven
- Ethical mavericks: value-driven
- Ad hoc enviropreneurs: profits-driven
This categorisation helps to demonstrate the true scope of green entrepreneurs who are not only people who want to make the world a better place but also people who see opportunities and simply use them.
First green entrepreneurs
Although green entrepreneurship is considered to be a new term and belong to the 21st century, what it represents actually dates back to the 19th century.
As Geoffrey Jones writes in his book Profits and Sustainability: A History of Green Entrepreneurship (2017), when food became industrialised in the Western world, a crisis began, so did the endeavours to create solutions.
Back then, the health impacts of industrialisation became apparent right away, unlike the climate impacts. Widespread use of low-quality sugar and chemical preservatives in packaged food resulted in deaths from food poisoning in Britain and Europe, as well as growing number of dental diseases. First green entrepreneurs emerged when food adulteration spread during the second half of the 19th century. Their motivation was to provide healthy food alternatives and to educate consumers about the growing health risk at the same time.
Who were these first green entrepreneurs? Here are some of the names mentioned in the book;
Sylvester Graham (1794-1851)
Graham is the father of the modern breakfast-cereal industry. In 1829, The Presbyterian minister invented Graham Cracker -using whole-wheat and high-fibre flour- as an alternative to white bread which was highly popular and contained chemical additives. He advocated for a healthy and balanced diet without meat and alcohol. He was also involved in the foundation of the American Vegetarian Society in New York City in 1850.
When Dr John Harvey Kellogg decided to set up a business with his brother Will Keith, he was a vegetarian and a fan of Graham crackers.
Benedict Lust (1872-1945)
Lust played a key role in transferring the concepts of natural healing and healthy food from Germany to the United States. After being cured of Tuberculosis through natural healing techniques, Lust decided to begin his career as a naturopath and founded the first naturopathic medical school in the world in New York City, along with health resorts in New Jersey and Florida. He also transferred Indian concepts such as Ayurveda and Yoga to the United States.
Bernarr Macfadden (1868-1955)
Macfadden contributed to the beginning of the culture of health and fitness in the United States. He was a regular customer of Benedict Lust’s health resorts and started to release a magazine called “Physical Culture.” In 1935, the magazine was selling more than 7 million copies.
Rudolf Steiner (1861-1925)
Steiner laid the foundations for the organic food business. The Austrian-born philosopher who founded the movement of anthroposophy introduced the biodynamic approach to agriculture.
The basis of renewable energies was also formed at the end of the 18th century when Poul la Cour did his experiments to generate energy from wind and when Frank Shuman worked on solar engines.
Modern-day green entrepreneurs
When we look at the present, a green business that prioritises sustainability can be found in almost any part of life from goods, energy, food, waste to technology, construction, and fashion. Many of them are small and medium-sized enterprises (SMEs) from mostly individual entrepreneurs.
Here are some examples from the UK’s green start-ups that have been shining recently;
Olio is a sharing app that aims to prevent food waste by connecting neighbours with each other and local businesses. The app which was founded in 2015 by two entrepreneur women attracted more than 2 million users in 54 countries.
London-based environment-friendly private transportation service claims to be the city’s only sustainable car service. The company uses only low and zero-emission vehicles (Toyota Prius and Toyota Mirai) and is ISO 14001 certified.
RootWave’s technology provides a sustainable alternative to chemical pesticides as it uses electricity to kill weeds. This innovation not only reduces CO2 emissions and water usage but also prevents soil erosion since tillage is no longer needed to remove weeds.
Since 2014, Bulb provides green energy to the UK’s homes. They use solar, wind and hydro sources to supply 100% renewable electricity and food or farm waste to supply part of their gas. To offset the emissions from the gas, the company supports carbon reduction projects.
London-based Toast is another startup that aims to tackle the food waste problem through business. The company points out that food production contributes the most to climate change and that one-third of all food ends up in landfills. Therefore, they get unsold bread and turn them into beer.
The free app which was founded in 2019 allows users to track their plastic footprint and encourages them to reduce it by setting goals. It has been downloaded more than 2,000 times by users not only from the UK but also from the US, Poland and Norway. The entrepreneurs have also partnered with charities tackling plastic pollution.
Does it pay to go green?
Such green business ideas sound amazing and fill everyone with hope for the future, but can green businesses be really profitable?
Researchers and analysts suggest that going green is cost-efficient; increases revenue through better access to certain markets, the opportunity of differentiating products and selling environment-friendly technology. Furthermore, it can result in increased transparency, better risk management and improved relationships with external stakeholders.
It is also important to mention that there is a clear growing pressure for businesses to become greener.
After more than 40 years of warnings from scientists and NGOs, today’s governments finally start putting climate change on their agenda. The problem is affecting every single human being on Earth and unfortunately not going linear. The impacts are now visible on a local, regional and global level. At this point, states do not have any option other than transitioning to a green economy through policy reforms and alterations in taxation and regulation.
Britain, where the Industrial Revolution first started in the 18th century, is now trying to pay the price of being an industrial society by setting ambitious targets to tackle climate change under the Paris Agreement. According to the Prime Minister’s latest announcement on emission targets, the UK’s new goal is to achieve at least a 68% reduction in greenhouse gas emissions by 2030, compared to 1990 levels. This rate is higher than the commitments of any other major economy.
In November 2020, over 1000 innovative and greenest projects from the UK’s SMEs received £134 million of government investment.
Given the current trends, from a business perspective, it is safe to say that there has never been a better time to go green whether it’s setting up a sustainable business from scratch or transitioning an existing one.