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Profitable Green Strategies for Small Enterprises
- 1. Profitable Green Strategies forSmall Enterprises Presented to SBDC NxLevel Class, San Rafael, 11/30/2010 By: Chris Yalonis, Managing Partner, Sustainametrics, 415-309-0331
- 2. Content Introduction The business case for SME sustainability The new model of triple bottom line The ROI of going green Entrepreneurs leverage the sustainability wave Best sustainable practices Cost savings Eco-label/certifications Avoid green-washing Product design and lifecycle management References
- 3. About Sustainametrics Sustainability intelligence and consulting firm helping SME’s, colleges and government entities green their operations and products/services. Systems approach that leverages interconnections between economic, social, environmental performance Our Core Competencies Sustainability plan development Green Certification Green Branding Materials, Water and Waste Management Energy and Greenhouse Gas Management
- 4. (c) 2008 Foundationfor a Sustainable Community A Mega-Trend
- 5. In business newseverywhere…
- 6. (c) 2008 Foundationfor a Sustainable Community Green and Sustainable
- 7. (c) 2008 Foundationfor a Sustainable Community New Metrics Sustainability and the Triple Bottom Line Revenue growth Productivity Profit margin Return on Investment Cost of capital Risk Management Valuation of enterprise Appeal to investors Energy, Water Materials, Emissions and Waste, Community and Social impact Operational and Design Health and safety Efficiencies, New Project, Fair compensation Service Opportunities, Equality opportunity education Life Systems Impact Recognition
- 8. What is aSustainable Enterprise? Sustainable enterprise employs profitable strategies that approach social and environmental challenges as business opportunities and minimize negative social and environmental impacts. Sustainable enterprises measure success in terms of “triple bottom line” value
- 9. The Entrepreneurial Spirit Attributes of Entrepreneurs . . . And Sustainability See a need to fill Green Rush Self-starter, independent $Trillion energy market Desire to grow financially Public/Private Partnerships Thrive with change Vision for People, Planet, Make connections few others see Profits Driven to persevere Awareness of Systems Aware of strengths & weaknesses
- 10. Conscious Consumers: Captureor Lose • Healthy, local food movement • Increasingly “Freak Weather”: Katrina, Russian fires, Pakistan floods, glacial disappearance • Rising energy prices-peak everything • 70-80% of consumers say they are switching to “green” companies, 20% actually did in 2009 • US LOHAS sector $420B by 2010 $845B by 2015 Cover collage from Deloitte & Touche “Tax Wednesday” seminar, March 26, 2008
- 11. The Race forTalent • 40% of MBA grads rated CSR as a an “extremely” or “very” important company reputation measure when job hunting (Hill & Knowlton Jan 08) • 92% of students and entry-level hires seek an environmentally friendly company (MonsterTRAK.com survey, Nov 07) • 83% of employees in G7 countries say company’s positive CSR reputation increases their loyalty and motivation (GlobeScan 2006)
- 12. Company Value “Iceberg”:2009 29% Tangibles Financials Intangibles Nonfinancials 71% Reputation Arthur D. Little, The Business Case for Corporate Citizenship
- 13. Sustainability Investing isNot a Sacrifice Sustainability indices equal or outperform the market: DJSI, Jantzi, FTSE4GOOD DJSI Jantzi Social Index SRI Funds Growing US SRI assets grew 258% from 1995 to $2.3T in 2005
- 14. Sustainability Leaders A survey of Newsweek’s greenest companies High Tech Tourism Manufacturing HP GE •Strong GhG & toxic •Ambitious emissions materials reduction and waste reduction •Leader in wind program goals turbines, carbon fiber •First major IT company •Pursuing green lodging engines, CFLs, & high to report emissions designation for all efficiency appliances associated with supply properties •Lean manufacturing chain •Installing solar panels •Aggressive GhG •Also very strong CSR in parks reduction goals. efforts. •Extensive CSR efforts •Supply chain impact
- 15. Sustainability Strategies: Sourcesof Competitive Advantage Corporate Strategy • New business models • Strategic competitive • Organizational learning & services advantages Operations Marketing & Communication Finance & HR • Reduced Sales Accounting operating costs • Increased sales • Improved • Increased • Improved (energy, waste, • New product corporate access to capital productivity & raw materials) opportunities reputation • Improved morale • Improved • Access to new • License to investor relations • Lower turnover, operational markets operate absenteeism, efficiencies • Improved • Reduced political/ accidents • Resource customer regulatory costs productivity loyalty, brand • Reduced recognition liabilities
- 16. Economic Best Practices Economic Planning Develop and update Business Plan, succession plan and marketing plan Integrate sustainable principles into plan Performance Invest in Capital Grow Profits Positive Cash Flow, manage debt Practices Invest in Employee Professional Development Use Standard Accounting Principles
- 17. Environmental Best Practices The4 W’s of Green Cost Savings Watts (Energy) Review Gas and Electric Bill for the purpose of reducing consumption Adopt written goals about reducing energy consumption Water Review monthly bills for the purpose of conservation Install new or retro fit appliances Waste Measure production Purchase/sell products with reduced packaging Reuse items and recycle as much as you can Wheels (Transportation) Incentives/Reduce barriers for use of alternate modes of transportation Explore telecommuting/online meetings/teleconferencing
- 18. Social Best Practices Social Responsibility Family Friendly Policies Sustainable Community (c) 2008 Foundation for a Paid or unpaid leave for birth/adoption of a child Paid or unpaid leave for care of a dependant Provide a group health plan for employee participation Civic Participation/Corporate Responsibility Make cash or in-kind contributions to local non-profits Match Employee contributions to local organizations Internship opportunities for local youth Volunteerism Give employees time off to volunteer in schools or with agencies 100% of senior management serve on the board of a local non-profit.
- 19. Local Showcases Fairfax FairfaxGreen™, by Fairfax Lumber & Hardware, is a program to provide green building products and information to our customers. Environmentally friendly printing and graphic communications company dedicated to helping individuals and organizations promote themselves in more sustainable ways. * using state-of-the-art recycled papers... * printing by a certified environmentally responsible company... * and shipped directly to you with zero climate impact
- 20. Green Branding • Green Branding is critical to leverage environmental efforts into increased revenues Great Branding Is transparent, engages deeply with customers, … becomes is meaningful and iconic authentic… People will forget what you say, but they never forget the way you make them feel
- 21. Green Certification Green Certification addscredibility to your brand and validates environmental efforts.
- 22. Sustainability plan and program set-up for Green Seal
- 23. Green-washing Pitfalls Hiddentrade-offs: i.e.: Organic fruit from Peru No proof: Need 3rd party verification Over-generalized terminology: “green”, “eco-”, “natural”, “earth-friendly” sounds suspicious Fibbing: Jumping the gun on your certification Lesser of two evils: ie: lemon-scented ammonia
- 24.
- 25. Clorox Greenworks Throughmarket research, product formula tests, uncovered untapped latent market for fume free cleaning products
- 26. Takeaways… • Sustainability is smart business • Important stakeholders’ expectations are rising • New market forces & risks are in play • Relevant to existing business priorities • Can protect & enhance company value • Measure ROI, savings • Many willing, helpful partners • Opportunity for leadership, avoid green-washing
- 27. References Inspiration Blessed Unrest by Paul Hawken Green to Gold, Andrew Winston How to green your business The Truth about Green Business by Gil Friend The Green Business Guide by Glenn Bachman Keep current www.greenbiz.com www.sustainablelifemedia.com Green product guides www,goodguide.com
- 28. How will youbecome as big as your dreams?
- 29. Green Biz PlanCompetition Criterion
Editor's Notes
- #6 Specific examples KDB and the Wal-Mart event
- #9 Increasing in popularity since expansion & awareness of Dow Jones Sustainability Index rise of socially responsible investing increase in sustainability reporting among multinationals companies like GE increasing interest GE “Ecomagination” – pledged to spend $1.5 billion a year on R&D for environmental technologies by 2010, more than double the $700 million it spends today. Immelt said GE expects more than half of its product revenue to come from such products by 2015. At the same time, GE promised to reduce the greenhouse gas emissions of its factory operations 1 percent by 2012. Without the initiative, those emissions were expected to increase 40 percent, the company said.
- #16 How it impacts specific areas of business