What is a Green Business

What is a Green Business?

A green business is an ecologically-friendly business. It is not limited to any particular market — it could be any kind of product for any market. What characterizes a green business is that it is run in such a way as to conserve natural resources, eliminate waste and remain ecologically in balance.

The terminology and language used to describe these businesses is all over the place.

Sustainable business is a term used regularly.

Natural capitalism is another term. The tenets of natural capitalism are outlined in this Harvard Business Review article, A Roadmap for Natural Capitalism (PDF).

TerraCycle uses the term eco-capitalism to describe its approach:

“The emerging concept of Eco-Capitalism holds that organizations must be accountable for their performance in the consumption and production of natural capital, an economic term for the goods and services available from nature. Such goods and services include the resources we use in conducting manufacturing and commerce, both nonrenewable (oil, coal, metal ore, etc.) and renewable (forests, fisheries, grasslands, etc.).

Traditional capitalistic business practices and public policies have typically ignored the value of natural capital. We have been wasteful in our use of energy, materials, water, fiber, topsoil, and ecosystems.”

Anecdotal Signs of Growth

Whatever you call it — green business, sustainable business, eco-capitalism or anything else — the signs are all around us that green businesses are a growing business trend, as this CNN Money article notes.

How much growth is the elusive part. Certainly you can find lots of anecdotal evidence of green businesses today. A search of related terms in Google brings up thousands of Web pages. Co-Op America is holding its fourth annual Green Business Conference in November, and their website says last year’s event was sold out. Talk of sustainable business is even part of a United Nations initiative.

Yet, it is hard to find solid data about the number of and revenues of these eco-friendly small businesses. (If anyone has good statistics, please leave a comment below.)

Complicating the picture is the fact that green businesses can be associated with political platforms (pro-Kyoto accord, anti-Big Oil, etc.). People with highly-charged feelings about an issue may be the ones motivated to start and run a green business. They tend to be highly vocal. Very loud voices can make any movement seem bigger than it is.

Is “Green” Good Marketing?

Obviously the entrepreneurs and business owners who follow green business tenets feel strongly about the environment. But the real question is: how many of their customers care?

A recent survey by Landor Associates suggests that the majority (58%) of consumers do not care whether a business is green. According to the survey, that still leaves 42% who are interested to some degree in the environment.

Another set of market research — more extensive — was done by the Natural Marketing Institute for LOHAS. LOHAS stands for consumers with Lifestyles of Health and Sustainability. The LOHAS research found that 23% of the U.S. adult population is “classified as a LOHAS consumer, meaning that they have a profound sense of environmental and social responsibility.” These are the people most likely to buy green products.

Twenty-three percent of the U.S. adult population is no shabby number — it exceeds 50 million people. So obviously a decent-sized market exists.

Green business strikes me as a business trend with promise. If you happen to be a consumer interested in conserving the environment, chances are you will be interested enough to support it with your pocketbook. And apparently a growing number of business owners feel similarly.

Will 100% of the population ever become a green consumer? Hardly. But luckily you don’t need 100% of the population to make it worthwhile.