Primer on Sustainability in Small Businesses

There are a number of things that small businesses can do to be more environmentally sustainable.  This both lowers costs and enhances the reputation of your enterprise. A growing number of companies are reducing the environmental impact of their businesses, so engaging sustainability is also about remaining competitive. Increasing consumer interest in sustainability makes it ever more important for small businesses to be able to meet burgeoning demand now and in the future.

Why Small Businesses are Engaging Sustainability

The size of the market opportunities is driving small businesses to engage environmental sustainability, as are concerns about survival and long term success. In addition to improving profits, reducing costs and mitigating against risk, engaging sustainability affords opportunities for collaboration and innovation.

While big corporate sustainability initiatives steal headlines, the small business community is also going green. For example, operational efficiency practices are increasingly commonplace even in small companies.

The rationale for engaging sustainability is largely about meeting and anticipating consumer demand. This translates to more customers, increased sales, higher revenues and even price premiums. Sustainability contributes to the crafting of a unique selling proposition, it helps to differentiate a company from the competition, and it offers a competitive advantage. Sustainability provides a host of reputational benefits. The latter contributes to word of mouth marketing, greater trust, improved loyalty, and enhanced employee recruitment and retention.

Why Small Businesses are Well Suited to Sustainability

Small businesses and sustainability are a perfect match. Yet their are a number of reasons why they are not adopting sustainability at the same rate as their corporate counterparts. Just like their larger corporate cousins, small businesses should adopt sustainability policies. There are good reasons why it is easier to engage sustainability in a small business as compared to a large corporation.

While they may not have the deep pockets of big corporations, a small business is more nimble and able to change directions more quickly than large enterprises.

Why Small Businesses are Not Engaging Sustainability

Many small businesses fail to realize the value of sustainability and as a consequence they are not adopting sustainability as quickly as large corporations. Despite the convincing business case for sustainability, small businesses have yet to engage in large numbers. Small business owners commonly perceive sustainability to be overly complex and too costly. The result is that small businesses are often absent from discussions about sustainability.

The inaction of the small business community does not appear to be due to disinterest in environmental responsibility. According to a Lloyds’ survey, 61 percent of small and medium business leaders practice sustainability at home, while only 43 percent incorporate eco-friendly practices at the office.

Green Investing Part 1: Objective Research and Analysis

Despite wild fluctuations in the stock market, Green is becoming a major economic power. However to be a successful investor in this area you must remain objective. Emotions are often harmful to the value of an investor's portfolio, this is particularly true in Green investing. For many investing in Green businesses, decisions are based on their hopes rather than on objective research and analysis. A successful (Green) approach to investing implies more than the ability to recognize a good concept or anticipate a trend, to be a bottom line investor you must also research and analyze a company's finances and business practices. Examine the management, the uniqueness and positioning of the product, the industry, and the competition. Consider also the future growth prospects for the company and the industry. Above all, effective analysis must review the plan for integrating green technologies or concepts into sustainable profitability.

Investors may also want to consider Green Chips, (exchange traded funds or "baskets" of green energy companies). Although sustainable energy gets a lot of attention, there are many smaller opportunities that offer favorable rates of return. Assess risk by anticipating obstacles, and the individual set of pros and cons that come with each investment. To help minimize your risk, diversify your portfolio.

When eco-convictions hold sway over analysis, invest only what you can afford to lose. When analyzing a Green investment, research the details and remain objective.

Next: Green Investing Part 2: The Green Wave