Green Business is commonly understood as business dedicated to solving the environmental problems facing humankind. The objective of such businesses is to simultaneously address issues of profitability while minimizing environmental impact and damage done to the environment by a near obsessive drive for maximizing monetary gains. Green Business is 21st century concept and is seen as the antidote to the current ecological crisis which can be cataclysmically fatal for the human race.
A United Nations (UN) report estimates that every year an area equivalent of to Ukraine is lost to agriculture because of climate change. Many countries are facing food shortages which strain the political and economic fabric of nations. However, it is heartening that even as economic woes get exacerbated due to global environment trends, the last decade has seen a growing number of entrepreneurs, who are organizing business around areas such energy, water, waste-management, food security, afforestation.
The challenge before businesses across the world is to promote research, utilize technology, assemble capital and access markets required for minimizing environmental degradation.
According to Muhammad Yunus, widely regarded as the father of “Social Business”, “when a crisis is at its deepest, it can offer a huge opportunity. When things fall apart we can redesign, recast, rebuild”.
He has given several examples of businesses trying to achieve congruence between profit and environmental concerns. Several such ‘Green’ businesses find mention in his newly published book, “Building Social Businesses – The New Kind of Capitalism that Serves Humanity’s Most Pressing Needs”.
A for-profit Brazilian company, ‘The Sun Shines’, is successfully providing solar electric power to 75,000 homes in rural Brazil, as yet unconnected to the local power grid. This company typically provides a 29% – 30% internal rate of return (IRR) to its investors.
A novel business concept call ‘B corporation’, a creation of B-Labs, founded by Cohen Gilbert in 2006, in the United States, gives ratings to businesses whose governing documents specifically state that in addition to financial interests, the welfare of all ‘stakeholders’, including shareholders, employees, customers , the community and the natural environment will be served. B in ‘B corporation’ stands for ‘beneficial’.
Grameen Danon in Bangladesh, in which Muhammad Yunus is directly involved, manufactures yogurt. Its factory built over just 7,500 square feet has many ‘green’ features such as water treatment equipment, recycling facilities, solar powered cells and a bio-gas unit that converts natural waste into energy. The yogurt is packaged in biodegradable cups made from cornstarch. Research is being currently conducted on making the cups edible, thereby adding to the nutritional value of the product, while reducing waste.
The French Company, Viola Waters, focuses on the design, construction and management of water and waste water services for municipal and industrial clients. It had a revenue of 12.6 billion euros in 2008 – a 15% increase from the previous year.
Water scarcity in coming years is a reality acknowledged by many scientists. Today about 20% of the world’s population have inadequate access to clean water for drinking and cooking, resulting in 2 million children deaths, due to water related diseases. This problem is expected to get much worse by 2025, when half of the world’s population will suffer from water shortages.
If current global warming trends continue, rising sea-levels can be expected to flood almost 1/3rd of farmlands across the world. According to Yunus, “environmental disaster is fast turning into human disaster’, the seminal cause of which flawed capitalism as currently practiced.
Even as ecological crisis put the future to grave risk, it is time to concentrate on making changes and seize the green business opportunities which exist in areas such as alternative sources of energy, treatment of urban waste, afforestation, watershed protection, fisheries management, ecotourism, sustainable animal husbandry and agriculture, thus pursuing business goals while minimizing and even reversing impact on the environment.
