Green Guide for Small Business

By following green principles and practices, a company can reduce its costs (particularly energy expenditures), develop new markets and enhance its reputation.

"Going green" means becoming more environmentally conscious. It is part of adopting sustainable business practices that balance the conflicting goals of economic performance, environmental stewardship and social responsibility. The main theme of sustainability is "meeting the needs of the present without compromising the ability of future generations to meet their own needs."

Most small companies have neither the need nor the resources to develop a comprehensive sustainability program. But there is much they can do to improve their environmental performance for the benefit of their business and customers.

By following green principles and practices, a company can reduce its costs (particularly energy expenditures), develop new markets and enhance its reputation.

Basic Green Plan

Start by talking with your employees and customers about being environmentally conscious. Decide how green you want your company to be according to your values and beliefs and relative to your competitors. Do you want to simply comply with regulations, proactively exceed them, or maybe pursue a green leadership position? What changes do you need to make, or want to make, to green your business? Be sure about why you are making those changes.

Going green is a journey, not an end. It's a path of continuous discovery and improvement. The initial focus should be on cost reduction, mostly of the energy and resources used in buildings, operations and transportation. Later efforts can focus on developing new products and revenues.

Quick Hits -- Do these simple green activities today:

  • Adjust your office room thermostat higher (summer) or lower (winter) by two degrees (C, one degree F).
  • Turn off all lights, appliances and equipment when not in use.
  • Don't print half of the digital correspondence you would normally print today. You'll survive!
  • When driving, avoid hard acceleration and braking. Drive at 100 kph (60 mph) on the highway.
Partnerships -- Green initiatives are about working with and helping others. What environmental knowledge, skills, products or services can your company offer to others? What does your company need that others can provide for you? Partners are people and organizations that share your values and care about the environment. Potential partners include customers, suppliers, competitors, neighbours, industry groups, community groups, government agencies, non-government organizations, employees, volunteers and professionals.

To get the green ball rolling at your company, find a champion: Someone who believes in the environmental cause and is committed to fostering it. Someone who is happy and proud to be green. Delegate other green roles, responsibilities and training as necessary.

Green-plus Marketing Plan

A marketing plan is needed to communicate your green activities to stakeholders inside and outside the company.

Be careful about basing your green activities on the results of consumer opinion surveys. Most people say they are concerned about the environment. But it is not a top priority for most people and does not affect the majority of their purchase behaviour.

Most consumers seek to satisfy their personal needs before considering those of others and the planet. Pure green products might appeal to green activists, but they won't reach the mainstream market and will become stuck in a limited segment. Consumers in general do not want green products. They want solutions to their day-to-day problems that also do not harm the environment.

There are three main green consumer behaviour segments:

  • Active green (25% of market) -- Believe most environmental claims. Being green is part of their lifestyle. Personal action is needed. Will pay more for green performance and value-add. Customers engaged with the product.
  • Partial green (50%) -- Believe some environmental claims. May buy green based on peer pressure, status/image, or 'do the right thing' (all else being equal). Want to pay the same for current performance and get green benefits. Might pay more initially to get savings during the product life.
  • Inactive (25%) -- Don't believe environmental claims. Non-participants in the green movement. Avoid green products or features as "not for me."

The green market is typically between 10 and 50 percent of the total market, depending on the product and other factors. It is growing as more people become more aware, concerned and motivated about the environment, and move up through these groups.

The main consumer product segments that are amenable to green features and benefits are:

  • Home/office -- Houses, wood/substitutes, insulation, flooring, windows, doors, appliances, lighting, heating, cooling, renewable energy, cleaning products, paper products, recycling.
  • Transportation -- Hybrid/electric vehicles, clean fuels, car sharing, public transit, bicycles.
  • Personal care -- Soaps, skin care, beauty, alternative healthcare.
  • Food and nutrition -- Foods, beverages, supplements, vitamins, organics.
  • Leisure and recreation -- Exercise, fitness, diet/weight loss, eco-tourism and travel.

Many consumers are skeptical about green issues, dubious about claims, questionable about authenticity and sincerity, and able to boycott brands. Consumers need five things for buying green products: information, choice, control, ability to make a difference, and ability to maintain lifestyle. Companies that satisfy all five needs will find a welcome and lucrative market.

The business-to-business market is twice as large (dollar value) as the consumer market. Business buyers have more incentive to reduce costs and increase performance. Green products and services can be part of satisfying both of these needs. Open up this huge market opportunity by learning about the specific green aspects of the business buying center and buying process in your industry.

We do not recommend marketing specifically to the green consumer or selling pure green products. It is better to establish or improve the main performance and value of your existing products in your market niche. Then add green features and benefits that have general appeal for all the members.

A green-plus marketing program has the following basic elements:

  • Make the tone of communications positive and personal -- Talk about new possibilities and benefits, not about problems, sacrifices or limits. Allude to fun and style, if possible.
  • Make green claims more credible -- Add third-party certification, such as eco-labeling or membership. Talk about improving the local environment, such as tress not cut down, energy not consumed or reduced waste/pollution, not about saving the ecosystem. State the uniqueness of your green product or initiative.
  • Tell the truth about your environmental activities -- If you are caught exaggerating your green performance or benefits, you will lose customer trust and market reputation.
  • Don't promote the green aspects of your products too much -- You risk being perceived as another "green-washer" who is insincere and pushes the hype solely to boost their business.

If you are sincere and committed to being green, make a statement about your green activities, such as:

  • Put your logo on reusable shopping bags. Sell them or give them away.
  • Put your logo on a hybrid company car. The Toyota Prius is today's leading "I'm green" car.
  • Donate some of your revenues to a green cause. Or join a green organization.

Ultimately, you want to make your customers tell you (and others!) how they appreciate the kind of company you are in an environmental and moral sense.

Initial Green Activities: Pick the low hanging fruit

Some green activities are simple, easy and low-cost to do. Again, talk with your employees, customers and suppliers to find out what they want and can do.

Greening your business involves analyzing your operations in the office, factory and field for their impact on the air, water and land. Initially, identify the largest areas of waste and lowest cost areas for savings and changes, such as:

  • Reduce waste -- Look at the 4Rs of sustainability: Rethink, Reduce, Reuse and Recycle in your daily activities in the office and factory.
  • Reduce paper usage -- Communicate by e-mail, not by printed material. Read e-mail messages on-screen, don't print them. Use a fax-modem for sending and receiving faxes. Print paper two-sided. Don't print any document that is longer than ten pages, instead read the digital copy and print only select pages.
  • Increase energy efficiency -- Adjust building heating and cooling temperatures. Adjust production equipment and processes. Turn off equipment when not in use. Run equipment slower. Look at your electricity, natural gas and fuel bills for unusual or unnecessary consumption.
  • Buy renewable energy -- Electricity supplied from wind, solar, geothermal, hydro or biomass. Look for green power suppliers in your area.
  • Vehicles and driving -- Company vehicles should be tuned up, have properly inflated tires and not carry unnecessary cargo. Avoid hard acceleration and braking. Avoid unnecessary idling. Use uncongested routes. Phone to confirm any meeting before you leave. Consider buying a smaller or more fuel-efficient vehicle.
  • Supply packaging -- Reduce packaging on procured materials, especially consumable supplies. Ask suppliers for reusable or recyclable packaging.
  • Buy green products and supplies -- Made from post-consumer, recycled, non-toxic, bio-based or biodegradable materials. Meet energy efficiency standards, such as Energy Star. Buy locally produced or sourced. Ask your suppliers about green, or demand it.
  • Add green features to your products -- Reduce packaging. Reduce toxic ingredients. Make them reusable, renewable or recyclable. Offer a green alternative for a complementary product. Offer to take back your products at their end-of-life.

Measures, Targets and Reporting

After your green initiatives get going, you have to measure what you are doing to know where you stand, where you are going, and your progress. And to tell employees, customers, investors and other stakeholders.

Start by using a computer spreadsheet to record the key metrics that measure your initial green activities and can be gathered and analyzed easily. Look at your supplier invoices, especially for energy and materials. Maybe your accounting or production software systems can output some useful data.

Some typical environmental performance indicators to measure are:

  • Energy saved (quantities or dollars) due to conservation and efficiency improvements.
  • Product and material recycling and reuse.
  • Emissions of waste, toxins and pollutants.
  • Renewable energy consumed (wind, solar, geothermal, etc.).
  • Greenhouse gases emitted, such as carbon dioxide (direct and indirect).
  • Company's overall carbon footprint.
  • Donations to community, civil, social, and other groups (cash, in kind, or pro bono services).

Once you start going green there are unlimited opportunities for improving your business, helping your customers and making the world a better place.

Blair Kingsland is a senior consultant at Spectrum Innovation Group, a consulting firm specializing in sustainability and green business. Visit www.spectruminnovation.com.

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