Use Your Checkbook and Your Trash Can

Those are two good tools small businesses can use to become more sustainable.

Ten years ago, green biz guru Joel Makower co-founded Greener World Media to create a “one-source stop for the greening of mainstream business.” Nowadays, the Oakland-based company publishes five eco-oriented business web sites, such as the flagship, and convenes conferences on sustainable design and business trends. In February, it released its annual State of Green Business report, which tracks the environmental impacts of sustainable enterprises. We speak with Makower — author of tomes such as Strategies for the Green Economy — about the findings of the 2010 report and how small businesses can develop or enhance its “green gene.”

What were the highlights of State of Green Business report?

The biggest highlight is that green business didn’t go away during the recession. In past recessions, the environmental people were the first to be thrown off the bus, and the fact that they largely kept their jobs, and in some cases, grew their mandates in this economy, speaks volumes about where green business fits now in the corporate world.

Toxics emissions, and water and electric use per unit of GDP, have dropped every single year. So there’s been steady progress, albeit incremental progress that is insufficient in terms of addressing environmental challenges the world faces. That’s been the story for a long time. On the one hand, there is tremendous activity that is not known to the general public, but contrary to public opinion, this is an area where companies are doing more than they’re saying. On the other side, it’s just not enough. That’s a problem for the planet and for companies that increasingly face any number of resource constraints — they may find it hard to operate in certain places, or their permission to operate in certain places is in jeopardy.

How are these companies doing more than they’re saying when it comes to being green?

Companies are squeezing out inefficiencies and toxics, reducing energy consumption and carbon emissions in their operations, and sometimes dramatically. But it’s a hard story to tell — it’s the story of doing less bad, and most environmental improvements aren’t those that show up in the final product. For example, a supplier to McDonald’s now has a closed-loop water washing process for their potatoes, and that’s a significant environmental benefit related to what is being flushed down the drain. But McDonald’s is not going to put an eco label on its fries. Multiply that out by tens of thousands of actions and you see the kind of progress we’re making. Companies aren’t always doing this to be better citizens; they’re doing it because it’s better business and almost any company of any size recognizes that pollution represents a kind of inefficiency.

What’s preventing companies from doing more?

There is a confluence of barriers that keep companies from moving farther faster. One is simply that when it comes to change, companies, like people, are not good at it. Number two is education, and this is where we try to fill in the gap. Companies just want to know what to do, and there is no one-size-fits-all recipe. Every business is different in how they do things and the impacts they have along the way, not to mention the corporate culture and the appetite for change and innovations. And the policies are out of whack in terms of tax incentives, energy prices — all of the signals that can be sent in society to influence behavior.

What do you see down the pike for green business in 2010?

Over the past decade, we’ve gone from trying to do no harm to doing the right thing, to doing new businesses, which is to say that green isn’t just a way to improve the bottom line or a way to grow the top line anymore; it’s a platform for innovation, for new products and services, and for entirely new business models. That’s where this stuff gets exciting. It’s not simply about greening up the company, and not just about consumer-facing products or the components that go into products we buy, but about the companies in and of themselves.

For example, one session of the recent State of Green Business Forums [held in San Francisco and Chicago in February] was about the collision of green business and clean tech because they have largely been separate arenas. I describe them as two circles trying to become a Venn diagram, and now where those two things overlap is this confluence of energy, tech, IT, building tech, and vehicle tech that is going to transform the way we do things over the next generation in a way that allows us to dramatically reduce our environmental footprint. So what I see is more and more companies coming to this opportunity.

And then there is what’s happening at community level — the kind of work that is being done in the East Bay by the Ella Baker Center for Human Rights and Green For All because, as my friend Van Jones likes to say, “the green wave lifts all boats.” We will start to see companies waking up to the social part of sustainability, and not just the environmental part.

What is small business’ role in all of this?

Our focus on big companies is not to, in any way, suggest that small business is not important here. Small business is the engine for innovation, job creation, and community well-being, and it’s a vital part of the sustainability story.

The reality is it’s much harder for small businesses to be green businesses in terms of operations because they don’t typically own their facilities and they buy fewer things, so they don’t get the same economies of scale. When big companies make small changes, it has large impacts. Small businesses can’t take advantage of those kinds of opportunities. And small businesses don’t have full-time environmental departments, so no one is thinking only about how to make the business greener, so it’s a struggle.

Despite those challenges, what can small businesses do to become more sustainable?

Two of the biggest tools that small businesses have in becoming greener is their checkbook and their trash can. What are you spending on purchases and how could you be more efficient? What are you throwing out and what kind of inefficiency does that represent? How do workers get to work and how do customers get to you and how could you make those things more efficient? Whether it’s the things you sell or the things you need in order to operate, how far are these things coming from and how are they made? Those questions will help you understand your business from an environmental perspective.

Small businesses, like households, typically believe that there’s a couple simple things they could do and then they’re done, and that’s simply not the case. There are simple things that they could do, but the impactful things are not simple. They often require investments and finding new vendors or suppliers, or changing ingredients or making other changes to an otherwise well-oiled machine. It’s not simply a matter of swapping out Styrofoam cups for ceramic mugs, although that’s a good thing to do. And it’s not just about turning off a computer and turning off lights, which is important, too. There are opportunities to be innovative and to help create demand for greener products and services, and the opportunity to band together with other businesses, whether you become allied in some fashion or in order to build buying power.

Small businesses, like large businesses, are made up of individuals who bring passions and habits and an appetite for change. In the East Bay, we live in a community where there is a high appetite for change, but that does not always translate into an employee’s personal habits.

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