This 2010 slide presentation was presented to an SBA development center group by Chris Yalonis. It covers the business case for sustainability in small businesses.
1. Profitable Green Strategies
for Small Enterprises
Presented to SBDC NxLevel Class, San Rafael,
11/30/2010
By: Chris Yalonis, Managing Partner,
Sustainametrics, 415-309-0331
2. Content
Introduction
The business case for SME sustainability
The new model of triple bottom line
The ROI of going green
Entrepreneurs leverage the sustainability wave
Best sustainable practices
Cost savings
Eco-label/certifications
Avoid green-washing
Product design and lifecycle management
References
3. About Sustainametrics
Sustainability intelligence and consulting firm
helping SME’s, colleges and government
entities green their operations and
products/services.
Systems approach that leverages
interconnections between economic, social,
environmental performance
Our Core Competencies
Sustainability plan development
Green Certification
Green Branding
Materials, Water and Waste Management
Energy and Greenhouse Gas Management
7. (c) 2008 Foundation for a
Sustainable Community
New Metrics
Sustainability and the Triple Bottom Line
Revenue growth
Productivity
Profit margin
Return on Investment
Cost of capital
Risk Management
Valuation of enterprise
Appeal to investors
Energy, Water Materials,
Emissions and Waste, Community and Social impact
Operational and Design Health and safety
Efficiencies, New Project, Fair compensation
Service Opportunities, Equality opportunity education
Life Systems Impact Recognition
8. What is a Sustainable Enterprise?
Sustainable enterprise employs profitable strategies that
approach social and environmental challenges as business
opportunities and minimize negative social and
environmental impacts.
Sustainable enterprises measure
success in terms of “triple bottom
line” value
9. The Entrepreneurial Spirit
Attributes of
Entrepreneurs . . . And Sustainability
See a need to fill Green Rush
Self-starter, independent
$Trillion energy market
Desire to grow financially
Public/Private Partnerships
Thrive with change
Vision for People, Planet,
Make connections few others see
Profits
Driven to persevere
Awareness of Systems
Aware of strengths &
weaknesses
10. Conscious Consumers: Capture or Lose
• Healthy, local food movement
• Increasingly “Freak Weather”:
Katrina, Russian fires, Pakistan
floods, glacial disappearance
• Rising energy prices-peak
everything
• 70-80% of consumers say they are
switching to “green” companies,
20% actually did in 2009
• US LOHAS sector
$420B by 2010
$845B by 2015
Cover collage from Deloitte & Touche “Tax Wednesday” seminar, March 26, 2008
11. The Race for Talent
• 40% of MBA grads rated CSR as a an “extremely” or
“very” important company reputation measure when
job hunting (Hill & Knowlton Jan 08)
• 92% of students and entry-level hires seek an
environmentally friendly company
(MonsterTRAK.com survey, Nov 07)
• 83% of employees in G7 countries say company’s
positive CSR reputation increases their loyalty and
motivation (GlobeScan 2006)
12. Company Value “Iceberg”: 2009
29%
Tangibles
Financials
Intangibles
Nonfinancials 71%
Reputation
Arthur D. Little, The Business Case for Corporate Citizenship
13. Sustainability Investing is Not a Sacrifice
Sustainability indices equal or outperform the market:
DJSI, Jantzi, FTSE4GOOD
DJSI Jantzi Social Index
SRI Funds Growing
US SRI assets grew 258% from 1995 to $2.3T in 2005
14. Sustainability Leaders
A survey of Newsweek’s greenest companies
High Tech Tourism Manufacturing
HP
GE
•Strong GhG & toxic •Ambitious emissions
materials reduction and waste reduction •Leader in wind
program goals turbines, carbon fiber
•First major IT company •Pursuing green lodging engines, CFLs, & high
to report emissions designation for all efficiency appliances
associated with supply properties •Lean manufacturing
chain •Installing solar panels •Aggressive GhG
•Also very strong CSR in parks reduction goals.
efforts. •Extensive CSR efforts •Supply chain impact
15. Sustainability Strategies: Sources of
Competitive Advantage
Corporate Strategy
• New business models • Strategic competitive
• Organizational learning
& services advantages
Operations Marketing & Communication Finance & HR
• Reduced Sales Accounting
operating costs
• Increased sales • Improved • Increased • Improved
(energy, waste,
• New product corporate access to capital productivity &
raw materials)
opportunities reputation • Improved morale
• Improved
• Access to new • License to investor relations • Lower turnover,
operational
markets operate absenteeism,
efficiencies
• Improved • Reduced political/ accidents
• Resource
customer regulatory costs
productivity
loyalty, brand
• Reduced
recognition
liabilities
16. Economic Best Practices
Economic
Planning
Develop and update Business Plan, succession plan and marketing plan
Integrate sustainable principles into plan
Performance
Invest in Capital
Grow Profits
Positive Cash Flow, manage debt
Practices
Invest in Employee Professional Development
Use Standard Accounting Principles
17. Environmental Best Practices
The 4 W’s of Green Cost Savings
Watts (Energy)
Review Gas and Electric Bill for the purpose of reducing consumption
Adopt written goals about reducing energy consumption
Water
Review monthly bills for the purpose of conservation
Install new or retro fit appliances
Waste
Measure production
Purchase/sell products with reduced packaging
Reuse items and recycle as much as you can
Wheels (Transportation)
Incentives/Reduce barriers for use of alternate modes of transportation
Explore telecommuting/online meetings/teleconferencing
18. Social Best Practices
Social Responsibility
Family Friendly Policies
Sustainable Community
(c) 2008 Foundation for a
Paid or unpaid leave for birth/adoption of a child
Paid or unpaid leave for care of a dependant
Provide a group health plan for employee participation
Civic Participation/Corporate Responsibility
Make cash or in-kind contributions to local non-profits
Match Employee contributions to local organizations
Internship opportunities for local youth
Volunteerism
Give employees time off to volunteer in schools or with agencies
100% of senior management serve on the board of a local non-profit.
19. Local Showcases
Fairfax Fairfax Green™, by Fairfax Lumber &
Hardware, is a program to provide green building
products and information to our customers.
Environmentally friendly printing and graphic
communications company dedicated to helping individuals
and organizations promote themselves in more sustainable
ways.
* using state-of-the-art recycled papers...
* printing by a certified environmentally responsible
company...
* and shipped directly to you with zero climate impact
20. Green Branding
• Green Branding is critical to
leverage environmental
efforts into increased
revenues
Great Branding Is
transparent, engages
deeply with customers,
… becomes
is meaningful and iconic
authentic…
People will forget what you say, but they
never forget the way you make them feel
23. Green-washing Pitfalls
Hidden trade-offs: i.e.: Organic fruit from Peru
No proof: Need 3rd party verification
Over-generalized terminology: “green”, “eco-”,
“natural”, “earth-friendly” sounds suspicious
Fibbing: Jumping the gun on your certification
Lesser of two evils: ie: lemon-scented ammonia
25. Clorox Greenworks
Through market
research, product
formula tests,
uncovered untapped
latent market for
fume free cleaning
products
26. Takeaways…
• Sustainability is smart business
• Important stakeholders’ expectations are rising
• New market forces & risks are in play
• Relevant to existing business priorities
• Can protect & enhance company value
• Measure ROI, savings
• Many willing, helpful partners
• Opportunity for leadership, avoid green-washing
27. References
Inspiration
Blessed Unrest by Paul Hawken
Green to Gold, Andrew Winston
How to green your business
The Truth about Green Business by Gil Friend
The Green Business Guide by Glenn Bachman
Keep current
www.greenbiz.com
www.sustainablelifemedia.com
Green product guides
www,goodguide.com
Increasing in popularity since expansion & awareness of Dow Jones Sustainability Index rise of socially responsible investing increase in sustainability reporting among multinationals companies like GE increasing interest GE “Ecomagination” – pledged to spend $1.5 billion a year on R&D for environmental technologies by 2010, more than double the $700 million it spends today. Immelt said GE expects more than half of its product revenue to come from such products by 2015. At the same time, GE promised to reduce the greenhouse gas emissions of its factory operations 1 percent by 2012. Without the initiative, those emissions were expected to increase 40 percent, the company said.