Arguments can easily be made for both perspectives: catering to consumer demands for more environmentally conscious business practices has the potential to improve your reputation and potentially draw in new customers.
However, overhauling your existing systems and processes can come at great initial expense, depending on the type of business you operate and the age of those systems and processes.
Where Aussie business owners stand
According to a study by technology provider GoDaddy, if you would put sustainability ahead of profitability, you’re in the majority.
Of the more than 500 Australian SME owners to respond to the global study, 59 per cent said they would accept lower profits if it meant running an environmentally sustainable business.
“It is … good to see that Australian SMBs and future entrepreneurs are socially responsible. This pragmatic, well-principled approach ensures that Australia’s national economy grows in a sustainable way, without compromising the quality of life and values many Australians hold dear,” says Tara Commerford, country manager of GoDaddy Australia and New Zealand.
Sustainability that won’t cost the earth
David McEwen, the director of strategic consulting business Adaptive Capability, says there are many businesses and industries that will feel the heat from climate change, either as a direct result of weather changes or through being slugged with carbon prices, sanctions and even consumer boycotts.
However, he says there are plenty of opportunities for existing businesses to adapt their products and service offerings, as well the way they carry out their business, to capitalise on the shifting sentiment towards sustainable living.
According to David, the main areas for adaptation are:
• Clean tech: The substitution of incumbent products and services with those less harmful to the environment is not a new opportunity, but it is one with much scope left to grow.
“It is still a fertile area ripe for entrepreneurs, with emerging technologies including transparent solar cells, which could replace entire building facades to dramatically increase localised energy production, particularly when combined with new battery storage options. Globally, clean tech investment is approaching $1 trillion per annum,” says David.
• Green consumers: According to David, reducing actual consumption is a key part of the sustainable revolution, and businesses in any field can get involved.
“Ultimately these offers are about using less raw materials and energy and producing less pollution and waste,” he says.
“Think of toothbrush ‘subscription’ services, ‘closed-loop’ recycling services, the sharing economy and so on.”
• Adaptive needs: Businesses can innovate around current and future requirements, explains David, to stay ahead of the curve.
“For example, Miami Beach, Florida recently undertook a US$400 million project to raise the level of a section of iconic Alton Road and install a stormwater pumping system to alleviate ‘sunny-day flooding’ during very high tides.
“Additional innovation will be required in many sectors, such as agriculture, food technology, water, healthcare, construction and disaster mitigation.”
• Green governance: As David points out, part of ensuring our future is sustainable involves the regulation and monitoring of business products, practices and their associated marketing.
“Amidst all this innovation, there is plenty of ‘green-washing’ going on, with many firms’ sustainability programs little more than marketing spin,” says David.
“While the ACCC is starting to clamp down on misleading environmental claims, there is fertile ground for innovation in sectors such as product and business certification to help accurately inform consumers about the broad range of environmental considerations involved in their purchase decisions.”
My Business has previously spoken with several SME owners who operate around the notion of sustainability, who all agree that the level of demand for sustainable products and services far outweighs the level of competition in the marketplace.