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Why Clean Tech Start-Ups Should Bother Going Green

September 1, 2009

I had the opportunity to be a sustainability coach to some of the Clean Tech Open semifinalists last week.

The Annual Business Competition provides green mentoring and sustainability workshops to help clean tech entrepreneurs integrate sustainability into their business plans. And I found myself stressing the business case for why integrating green made business sense.

While some of the companies we met with were very committed to sustainability, others seemed to be going through the motions because it is required by the competition.

I understand CEOs of start-ups have many competing issues to focus on.

I thought it might be helpful to review here the three key reasons why it is makes good business sense to invest in sustainable business practices:

  • It will save you money
  • It will provide better access to capital
  • It will drive top-line revenues

It Will Save You Money

More efficient use of energy and cutting out waste saves you money. And while doing a complete lifecycle assessment (LCA) is beyond the scope of many start-ups, a back-of-the-envelope assessment can highlight the key areas to focus on.

Scan your operations, focus on the largest pieces of your footprint and implement some key strategies:

  • Integrate energy efficient technologies where possible.
  • Explore alternative materials that minimize toxins and petroleum-based plastics.
  • Think about the end of life and how the product can be recycled or reused.
  • And don’t forget to consider packaging.

A few resources for start-ups to consider include Sustainable Minds, Earthster, Greenfly and EIO-LCA.

The Environmental Defense Fund’s (EDF) Climate Corps program, “companies are missing significant savings in annual operating costs — around $40,000 for every 50,000 square feet in office space using no-cost or low-cost measures…”

It Will Provide Better Access to Capital

Institutional and socially responsible investors are pushing companies to integrate climate risk and sustainability into their business strategy.

“Another aspect of the integrated bottom line,” explains Hunter Lovins, president and founder of Natural Capitalism Solutions, “is better access to capital…Socially responsible investors typically won’t lend to companies that don’t have a sustainability policy.”

“The most sustainability-focused companies may well emerge from the current crisis stronger than ever — recognized by investors who appreciate the true long-term value of sustainability,” according to an A.T. Kearny report.

It Will Drive Top-Line Revenues

A commitment to sustainability can also drive top-line revenues and increase market share by differentiating products.

And while there is disagreement on whether in this economy consumers are willing to spend more for green products, according to a new report by the Yale Project on Climate Change, The Six Ways Americans View Global Warming [PDF], there is a growing group of “alarmed” and “concerned” consumers willing to reward companies addressing climate change by buying their products and also willing to punish companies by not buying their products.

More Resources on the Business Case for Integrating Sustainability

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Deborah Fleischer, founder and president of Green Impact, works with companies to design and launch profitable green initiatives. She brings expertise in sustainability strategy, program development, stakeholder partnerships and written communications. You can follow her occasional tweet @GreenImpact.

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