Small Businesses Lag on Sustainability: What To Do About It

All the recent headlines about corporate sustainability initiatives are encouraging: Fortune 500 companies are embracing environmental sustainability like never before, investing millions of dollars in greener operations and making sustainability a key part of their business strategy.

Sustainability

“Nearly every large company has shown some commitment to sustainability,” author Andrew Winston recently told a Huffington Post blogger. “They’re all engaged on some level now, with most having a senior executive responsible in some way.”

Great news. (Of course, many experts don’t think Corporate America’s sustainability efforts are ambitious enough, which I’ll discuss another time.)

But when you look at the landscape of small businesses across the country, sustainability isn’t nearly as prevalent as it seems in the corporate world.  Sure, some small businesses have jumped on board and are leagues ahead when it comes to energy efficiency and conservation. But plenty of them have done practically nothing to go green. They continue to operate the same way they’ve operated for 10, 20 or 50 years. They haven’t upgraded their lights or equipment or even undertaken the lowest-cost sustainability initiatives.

A survey last year by MIT’s Sloan Management Review and The Boston Consulting Group found that only 9% of companies with fewer than 1,000 employees fully embrace sustainability.

What’s going on? Why are small businesses falling behind?

For one thing, it’s more of an uphill battle for many small businesses to devote the time and resources to sustainability – and some just don’t feel it’s important in the grand scheme.   Here’s a look at two main challenges small businesses face when it comes to implementing sustainable practices, along with some potential solutions:

Challenge #1: Time.  Many small business owners are so busy that they simply can’t devote time to researching and implementing sustainable practices.

Solution: The obvious answer is “make time for it.” But that’s easier said than done. There are some resources that can guide small businesses through key steps related to sustainability. Consider joining a local business sustainability networking group, which many cities and communities now have. Also take advantage of free consulting: Many universities offer business sustainability-related majors and thus have students looking for real-world experience. Some small companies can take on summer interns to help them conduct research and put together sustainability initiatives. More nonprofits are also springing up devoted to helping local small businesses go green.

Challenge #2: Money. Despite quick paybacks on some energy upgrades, such as lighting, many small businesses can’t spare the upfront investment costs.

Solution: Many utility companies now offer their small business customers free or low-cost energy audits, along with rebates and financing programs to help them make energy upgrades with minimal upfront costs. Also consider some federal tax incentives for businesses that make energy upgrades, and check with your city or local government to see whether it has loan or rebate programs for green business projects.  The DSIRE database makes it easy to find financial incentives in your city or state.


Sustainability Concept Photo via Shutterstock

16 Comments ▼

Kelly Spors


Kelly Spors Kelly Spors is a former small-business and entrepreneurship reporter and blogger for The Wall Street Journal who has also written for Yahoo!, Entrepreneur, NFIB's MyBusiness magazine and The New York Times. Kelly is now a freelance editor and writer based in Minneapolis and has previously managed communications for an environmental non-profit that helps businesses find ways to be greener.

16 Reactions

  1. This is definitely an area where federal incentives can help shift the market over to sustainable options by making it more financially feasible to do so — write your congressperson about sustainability, and do what you can to mitigate your business’s carbon footprint in the simple, logical ways (turning off lights, sealing drafty windows, etc.) that don’t require huge investments!

  2. Thanks for this post, Kelly.

    You wrote, “When you look at the landscape of small businesses across the country, sustainability isn’t nearly as prevalent as it seems in the corporate world.”

    In times like these–which are tough for lots of small businesses, it’s about priorities. (Cash flow)

    I understand the lack of spending on sustainability and the lack of enthusiasm to do it.

    As the economy improves, more small business owners will jump on the Green train.

    The Franchise King®

  3. You are totally right Kelly. Did you know that even your web hosting can be green? Many people aren’t aware that they can make a difference just by choosing a green hosting company for their website. At vercomedia, we felt it was our responsibility to be greener. We make it a point to put all our clients on a green hosting system that is 100% powered by windmills.

  4. Kelly Spors

    Sarah and Joel,

    Thanks for the comments. The economy certainly has been a big hurdle for small businesses when it comes to paying for sustainability measures. It’s also important to mention, though, that there are also some steps businesses can take for little or no cost: http://smallbiztrends.com/2010/04/five-easy-ways-to-shave-business-energy-bills.html

    Kelly

  5. Excellent article, Kelly. Going green is an afterthought to many small businesses but there are even little ways to help out like going with paperless billing and Internet fax services. Every little bit counts. Efficient and affordable solar panels are just around the corner, too. :)

  6. Great post. Going green is extremely important for small businesses and you are right there are rebates and financing programs through many local utility companies. I never gave thought to utilizing interns to help conduct research and put together sustainability initiatives but this is a very good idea thanks for sharing!

  7. You have hit the nail on its head, Kelly. The SMB space is filled with businesses who are either oblivious our don’t have the band width.

    We at 500Gallons realized this and have built a product which caters to restaurants. Our Web application is free of cost for them and allows them to adopt sustainability at their own pace.

    It helps manage their progress and provides sustainable alternatives to improve their businesses.

    Please keep up your good work in bringing up such critical issues. :)

  8. Great post Kelly. You have really highlighted the issue that SMB’s face in going green. They don’t have the resources to do research to go green. Hiring interns is a very good idea.

    As the Green Business Bureau celebrates its fourth anniversary, it has risen to become nation’s leading contender for small businesses that want to go green. With about 400+ initiatives, GBB is helping Small Businesses go green . The online platform takes guesswork out of going green by providing initiatives developed by the US EPA, trade-related bodies and other regulatory entities, along with step-by-step plans, activities and links to online vendors.

    On a more general level, many initiatives don’t require any or significant upfront costs. There are small simple steps like printing double sided, reducing paper use (email invoices instead of printing), reducing/eliminating the use of paper cutlery.

  9. We’ve focused on “Green” for sometime, and have recycled 95+% of our solid wastes since 1994. The result has been a tremendous reduction in cost for our six shoe stores. We started to work on carbon reduction in 2004, and at the end of 2011 had achieved a 34.71% cut in Green house gases. We also cut our energy and space costs dramatically, and increased our profitability. The buzz from this was much appreciated by our customers, and our sales have moved upward comfortably. Utility programs, state programs, and tax benefits have helped. It has been a tremendous learning experience. It’s a great feeling when doing the right thing grows your bottom line. We are committed to a 50% reduction before 2020 and I’m sure that we will hit it. The DOE has also provided great support. We belong to the Retail Energy Alliance, and learn a lot there.

  10. Our experience has been that there are four fundamental factors influencing whether a SME moves toward sustainability. The first is that they equate it to “tree-hugging” with no return, financial data to the contrary. Changing that midset is not easy. The second is that it’s a family-owned cash cow with the owner making 5-7% and not driven to make more. The third is that most SME’s are in survivability mode due to the financial crisis, and you can’t convince them that implementing sustainability principles/practices will help them survive. The fourth is, unlike the quality movement of the 90s, sustainability has not “rippled-back” through the industry. The large corporates are not putting pressure on their Tier I suppliers to put pressure on their suppliers. And there is a fifth–location, location, location. The Midwest is lagging behind. There are a few shining examples but it’s not catching on. For those, it’s often been the CEO/Pres who “gets it.”

  11. The U.S. Hispanic Chamber of Commerce is taking action through its Green Builds Business program sponsored by Walmart and implemented by my company, Earth 2017. We have worked with hundreds of small businesses across the U.S. Their green projects have landed them new customers, grown sales, cut costs and reduced their environmental footprint. The book used in this program is called The Secret Green Sauce and it profiles real business (including many small businesses) and their best practices for making money going green. The real headline of what is happening is that small businesses are making money going green!

  12. The Iowa Energy Bank is an innovative solution for helping take the money ‘no’ off the table. The main thrust is funding public sector projects, but a smaller fund within the IEB is aimed as private sector businesses. TMS provides Sustainability Learning Circles for SMEs, and IEB funds the initial cost of participation, which is wrapped into favorable long-term financing of energy and efficiency projects.http://das.gse.iowa.gov/energybank/index.html

  13. We are joining a local business sustainability, it was a good tip of yours, we start to work on carbon reduction for the first time now. We also cut our energy and space costs dramatically, and increased our profitability. So its gonna be the right way…..go green!

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