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Sustainable entrepreneurship: It’s go-time for green startups
With the growing demand and proliferation of impact investing and socially responsible investing (SRI), there has never been a better time for sustainably-minded entrepreneurs to make an impact.
Now is the time for entrepreneurs to consider leveraging ideas surrounding social and environmental sustainability, and explore new avenues for business opportunities. Looking at the growing success of sustainability-focused apps, the evidence is clear that consumers are shifting to more ethical ways of living.
But, what are the core elements that are championing the widespread social and corporate support for sustainable business initiatives?
Profitable sustainability
The World Economic Forum (WEF) has released a recent report highlighting $10 trillion in sustainable business opportunities. In a call for global businesses to move away from the common “extract, use, dispose” model, the WEF have identified three key market areas that promise tremendous opportunities and millions of jobs.
The WEF states that “transformations in food, land and ocean use; infrastructure and the built environment; and energy and extractives, can generate an estimated $10 trillion in business value and create 395 million jobs in ten years”.
Previously, the lack of inclination for corporate investment in sustainability hinged on the ‘profitability versus sustainability’ idea, meaning that the two concepts were in conflict with each other.
However, what these detailed WEF reports (and many others) indicate is that this is no longer the case. Sustainability can, and does, lead to profit.
Impact investment is a growing trend
Impact investment is a growing trend in today’s business landscape, and thankfully so. Finally, there are opportunities and clear channels for corporations to play their part in social and environmental sustainability that also leads to profit.
Impact investment is widely considered a philanthropic endeavour as its primary aim is to invest capital into businesses that actively reduce the impact of business activity on the environment. These investments are usually funnelled into healthcare, education, agriculture, and renewable energy. Impact investment comes in the form of two approaches: socially responsible investing (SRI) and environmental, social, and governance (ESG) investing.
Moreover, businesses are looking to leverage socially conscious investments to attract consumers, sometimes through strategies such as sustainable branding. Today, consumers are far more eco-conscious than eve and embrace brands and businesses advocating for sustainable and clean solutions. Businesses are rapidly responding to customers’ demands to be clean-conscious, and by doing so they are gaining a new generation of sustainably-minded consumers who are keen to advocate brands and offer life-long loyalty to those who follow through on green initiatives.
Apart from the positive impact, this culture shift is having on the environment, impact investors are already seeing decent returns. According to a 2020 report by Global Impact Investing Network, “more than 88% of impact investors reported that their investments were meeting or surpassing their financial expectations”.
No matter the motivation (profit or ethics), the result is the same: a decisive mindset change and business model pivot towards global sustainability. From this, opportunities are rife for sustainably-minded business entrepreneurs.
The rise of the social entrepreneur
With the recent surge of impact investment from corporates thanks to the understanding that sustainability can lead to profit, sustainable entrepreneurship is starting to take centre stage and giving birth to the social entrepreneur.
Simply put, social entrepreneurs are driven to improve the world. They are driven to find innovative ways to make a positive impact on society and the environment that are not powered by profits. Of course, many social entrepreneurs realise impressive ROIs, but these are a result of doing good and benefiting cultures, communities, and the environment via various ethical means.
The rise of social entrepreneurship around the world is ushering in new ways for businesses to make a positive impact while still generating revenue. This has resulted in the formation of a Green Industry.
Green startups
Green startups encourage social good by leveraging technology to create environmentally-friendly products and services. They aim to create a sustainable and financially viable future, with the focus being on mid-to long-term sustainability rather than just short-term profits.
Thankfully, Green Startups are beginning to receive financial support from venture capitalists, impact investors, and other like-minded entrepreneurs who understand not only the importance but value (social, environmental, and financial) of sustainable businesses.
For entrepreneurs seeking new opportunities for their latest business venture, leveraging green concepts and initiatives is certainly an interesting avenue to explore. Gone are the days where eco-friendly businesses struggle to find investors and the public are generally apathetic to a business’s social responsibility. Younger generations are creating a future where sustainable business models can lead to profitability, benefitting both stakeholders and the world and society at large.
With so much outspoken support for green initiatives globally, now is the time for entrepreneurs to capitalise on the ‘green revolution’ and leverage eco-conscious business practices for long-term financial growth that sparks positive social and environmental change.
Mario Grunitz
Working Machines
An executive’s guide to AI and Intelligent Automation. Working Machines takes a look at how the renewed vigour for the development of Artificial Intelligence and Intelligent Automation technology has begun to change how businesses operate.
