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Building an Eco-Friendly Business

A Comprehensive Guide to Building an Eco-Friendly Business

Eco-friendliness is a hot topic in the minds of business owners and consumers all around the world. If you’re looking to start a new business, it can be worthwhile to invest in a core eco-friendly strategy from the ground up.

Adapting later, after the fact, is always harder than building with the right core principles from the start. The only question is, how do you do it?

Eco-Friendly Businesses vs Greenwashing

The first and, arguably, one of the most important things you can do is understand the difference between true eco-friendliness in business and the lip service so many pay towards it as a form of greenwashing.

A good way to illustrate the difference is by comparing two means of promoting eco-friendliness in a business. The first is working with Fair Trade Certified producers, which, beyond ethical labor practices, often align with environmental sustainability. From the Fair Trade website:

“By adhering to the Fairtrade standards and to be certified as a Fairtrade producer, farmers must improve soil and water quality, manage pests, avoid using harmful chemicals, manage waste, reduce greenhouse gas emissions, and protect biodiversity.”

The second is Carbon Offset Credits.

Fair Trade is something we’ve gone into great detail elsewhere on this blog already. To simplify it, Fair Trade is a set of guidelines, rules, and regulations that help promote the ethical and humane operation of farms that produce things like cotton and chocolate. Fair Trade practices not only ensure fair labor conditions but also tend to support sustainable farming methods, making a positive impact on the environment. Fair Trade provides funds to help these farms pay their workers a living wage, promote the humane treatment of those workers, eliminate child labor, and generally improve conditions on these farms.

As a business owner, you can earn fair trade certification if (and only if) you use solely Fair Trade suppliers for your products. You benefit from the Fair Trade label, and you know that, by working with those suppliers, you’re contributing not just to fair labor but also to eco-friendly practices.

An Eco-Friendly Business

Carbon Offset Credits, meanwhile, are something that sounds like a great idea but are largely ineffective.

The idea is that a corporation can take direct action to help offset carbon emissions and fight climate change but that most corporations don’t have the resources, knowledge, or access necessary to make truly meaningful changes. Instead, they can continue operations as normal but dedicate funds towards carbon offsets; that is, instead of cutting their own emissions, they can pay for credits that are then redeemed elsewhere in the world as a way for more effective emissions reduction, usually in developing nations and the global south.

Where those carbon credits go varies wildly. Sometimes, they go to agencies that plant trees. Sometimes, they go towards investment in renewable energy sources. Sometimes, they go towards the development of carbon-scrubbing technologies.

Unfortunately, deeper investigations have shown that a lot of these carbon credits don’t actually do much of anything. They’re a way for a corporation to say, “Look, we’re investing in eco-friendly means of fighting climate change,” while also not taking any tangible actions towards their own emissions. In short, it’s a way to buy PR and, sadly, little else.

Note: Not all carbon credits are useless, of course. They just aren’t a fraction as effective as direct action on the part of emissions-generating companies would be.

All of this is to say that if you want to build a truly eco-friendly business, you need to do more than just pay lip service to the concept. You need to build it into the very fabric of your business, from base principles to details of operations and beyond.

Building a Sustainable Business

We’re going to gloss over a lot of the more generic “building a business” information here. Why? Because a lot of the steps you’ll be taking – like writing an executive summary, describing your product or service, or doing market research – are both generic to any business and aren’t areas where anything is different when you’re focusing on eco-friendliness. Other than adding “eco-friendly” to your various business keywords and goals, you aren’t making tangible changes here.

Building a Sustainable and Eco-Friendly Business

The real crux of the issue is the operations of your business. Whether you’re planning a one-person resale operation using a website or a larger operation eventually meant to compete with the Fortune 500 list, building in eco-friendliness from the ground up is essential.

Build a Sustainable Business Plan

A business plan is more or less the same regardless of how much you’re focusing on green, ethical, human, or eco-friendly processes. The details differ since you’re focusing on sustainability, but the basic outline, topics you cover, and processes you develop are all the same.

Building a Sustainable Business Plan

Here’s an excellent guide to developing a sustainable business plan.

  • Develop your concept, your product, your unique selling points, and your SWOT analysis.
  • Understand sustainability and how it impacts each aspect of your business.
  • Read up on the laws and regulations, both nationally and internationally, surrounding sustainability.
  • Look for opportunities to tune your business ideas towards an eco-friendly focus.

This roadmap helps you know where to start and what areas you need to focus on for sustainability in business. For example, one of the key elements of an eco-friendly business is in shipping. You may not be able to offer free or low-cost shipping because you’re working exclusively with courier services that focus on low-emissions transportation rather than faster or cheaper transportation. Even details like the kinds of packaging you use (biodegradable paper products? Reusable canvas bags? Recyclable cardboard?) can make a huge difference and are decisions you need to make early.

Seek Grants for Development or Operations

One of the harsh facts about sustainability and eco-friendliness in business is that it’s almost always going to be more expensive than the alternative. Fair Trade certifies businesses, but membership costs money; eco-friendly business processes can’t use the cheaper options because the cheaper options are cheaper because they sacrifice the environment for short-term gains.

Fortunately, there are ways to offset this. There are a wide variety of grant programs, ranging from government grants to grants from private organizations, which can help with these costs.

Seeking Grants for Eco-Friendly Business Development

Grants are tricky. Hiring a grant writer can be a huge boon here, an additional expense, to be sure, but one that can win you much more money than trying to go it alone. Grant money is hugely beneficial, however, because it’s not a loan; it’s money you’re given for operations that, as long as it is spent on eco-friendly operations, does not have to be repaid.

You may also be able to find investment firms, angel investors, or venture capitalists that are willing to invest in eco-friendly businesses. Be sure to read any contracts you may be offered, though; make sure you aren’t putting yourself in a difficult position accepting money with too many strings attached.

Focus on Local Production

An excellent way to emphasize eco-friendly business operations is to focus on local production.

For example, at Ethix, many of our products are extremely local. Take our T-shirts, for instance. They’re printed locally, but those shirts are made by a different company that is also local, and even the cotton used to produce the fabric that is transformed into those shirts is also farmed locally.

Local Cotton Production

While we ship further afield, it greatly cuts down on the emissions caused by production by not having to, for example, ship containers full of shirts overseas on a horrifically polluting supercarrier.

“When we source local, shop local, and support local – we’re making an intentional difference to support the environment and financial sustainability of our neighbors.” – Mercy Corps.

Local doesn’t have to be the same city, county, or even state where your headquarters is located. However, the closer every part of your production is to every other part, the better off you’re going to be. It’s not always possible, but the closer you can make each part of your process, the better.

Seek Opportunities for Eco-Friendly Processes

As you develop your business plan, you should be watching for opportunities to promote eco-friendly practices.

An Eco-Friendly Supplier

Here are some ideas.

  • Look for suppliers who emphasize sustainability and eco-friendly methods of production.
  • Minimize shipping wherever possible, and use sustainable shipping options when shipping is necessary.
  • Work with certified fair trade or ethical B Corp businesses whenever possible.
  • Use recyclable, biodegradable, or reusable packaging materials, and minimize how much material is used in each shipment.
  • Source things as locally as possible while maintaining eco-friendly core principles.
  • Develop products that last as long as possible and can either be recycled or returned for refurbishment and reuse.
  • If you use transportation or a fleet yourself, invest in eco-friendly vehicles and fuels.
  • Minimize unnecessary water usage, paper consumption, power consumption, and more.
  • Don’t forget the back office; eco-friendliness in daily operations, even when it’s not public-facing, is exceptionally useful.
  • Earmark part of your proceeds to donate to further non-profits that promote eco-friendly business development (if possible.)
  • When purchasing swag or merchandise for your staff, office apparel, or other items, buy from an ethical and eco-friendly supplier.
  • Analyze the waste produced by your business and look for ways to reduce that waste by switching to reusable items, purchasing fewer consumables, and so on.
  • Take steps throughout your business to focus on energy efficiency, such as using LED lights, investing in good insulation to reduce HVAC usage, and so on.

There are a ton of different small changes you can make along the way. Many of them feel like they might have little impact, especially as a small business compared to the giant mega corporations out there, but every little bit of investment can ripple outwards to customers and to other businesses. By making yourself an example of eco-friendly success, you can inspire others to change while also promoting customer perspective that can, in turn, help put pressure on those giant corporations to make changes of their own.

Build Remote Work for Employees

COVID was and still is terrible in many ways, but one benefit that the pandemic brought to us is empirical proof that many businesses still function and society can still operate when a dramatically higher proportion of the population is allowed to work from home. Remote work is challenging for some people but hugely beneficial for others. Moreover, a marked reduction in commuting has a significant impact on emissions and can be a significant benefit to the environment.

A Team of Remote Workers

As a small business or a brand-new business, you probably don’t have many employees, and as a cost-cutting measure, you may already be emphasizing remote work. If not, though, consider finding ways to focus on remote work as much as possible. You allow people more freedom in their lives, more flexibility in getting tasks done, and promote environmentalism along the way.

Perform Routine Audits

Eco-friendliness isn’t a one-and-done process. You can build as many eco-friendly processes into your business as you can early on, but that’s only going to last you so long. Business processes slip. Sacrifices are made in the name of financial sustainability. More importantly, new options, suppliers, technologies, and more are developed every year.

This is why we highly recommend spending the time to audit your business, top to bottom, at least once a year. You can review your processes, your suppliers, your technology, and more, and you can identify avenues for further investment into eco-friendly operations.

Performing a Routine Audit

What exactly you need to examine and how you can change your business will depend a lot on what kind of business you’re running. A small team developing a SaaS product will have very different sustainability concerns than a company making physical products out of contentious material. Either way, institutionalize a culture of introspection and self-examination and always move towards a brighter future.

Do What You Can Sustain

One of the greatest challenges of creating and maintaining an eco-friendly business is that it’s very difficult, often expensive, and presents you with challenges you otherwise might not face. It’s such an immense problem that it’s easy to be overwhelmed with options, overloaded with information, and swamped with decisions.

An Eco-Friendly and Sustainable Business

The key, though, is to take things one step at a time. You won’t be perfect because you can’t be perfect. There’s no such thing as perfection. Sometimes, you’ll need to make a substandard decision in the name of keeping your business running. Sometimes, you need to make bad decisions now so you can make good decisions later. Whatever the case may be, one thing is certain: you can’t have an eco-friendly business if your business fails. Take things one step at a time.