With economic fears top of mind, going green may not be the major concern for small businesses. But becoming an environmentally friendly operation can be well worth it in terms of cost savings and attracting customers.
First steps are easy - install recycling bins, turn down the thermostat and use recycled paper.
But what's an entrepreneur who wants to turn her business a genuine shade of green supposed to do?
Learn about the challenges and benefits from Tima Bansal, who will take your questions at 1 p.m. ET on Jan. 27.
A professor at the University of Western Ontario's Richard Ivey School of Business, she leads two groups dedicated to strengthening the ties between research and practice in the area of business sustainability - the Cross-Enterprise Leadership Centre on Building Sustainable Value, and the Network for Business Sustainability.
Before joining Ivey in June, 1999, Prof. Bansal taught at Georgia State University in Atlanta and received her doctorate from the University of Oxford. Her research interests are primarily in the areas of sustainable development and international business. She has co-edited four books, including three in the field of management, and one titled Business and the Natural Environment.
Prof. Bansal has taught courses in strategy, international business and business sustainability.
Prior to her academic career, she worked as an economist for the Government of Canada and Province of Alberta, and as a management consultant for Nicholls Applied Management.
Prof. Bansal joined us earlier to take your questions.
Dave Michaels, the Globe and Mail: Hi Prof. Bansal, and thanks for taking the time to talk to us today. And thanks to our readers for joining us too. Sorry we are starting late -- we had some technical difficulties.
Dave Michaels, the Globe and Mail: How should businesses prioritize their green efforts? Especially smaller operations.
Tima Bansal: The most important first step is measurement. Learn about what you are doing and identify the gaps.
Then, you can prioritize and plan. Not all businesses are the same, and not all industries are the same. Your priorities are often influenced by your key stakeholders.
Once you prioritize, you can start to act. Choose the low hanging fruit first. This will help to build momentum, gain buy-in, and often lead to financial results that will fuel further initiatives.
Dave Michaels, the Globe and Mail: To what extent should business people expect or promote buy-in from their employees?
Tima Bansal: Buy-in from employees is easy. People naturally care about their environment, their colleagues, and their community. It is more important to seek employee engagement and involvement, not just their buy-in. If employees are given a chance to participate in the decisions, they will move the company towards a sustainability path naturally.
Dave Michaels, the Globe and Mail: There's a debate out there about how consumers feel about the environment. In surveys and opinion polls, they say they care, and that they will buy green products, but some don't walk the walk.
Tima Bansal: Of course, some people don't walk the talk -- not everyone is talking. But enough people are so that you have an opportunity to grab market share. Given two equivalent products, if you can show that your product is 'greener' than your competitor's, you'll get more business. What's more, the business that you get is usually from a more loyal customer.
In a systematic review undertaken by June Cotte and Remi Trudel for the Network for Business Sustainability ( www.nbs.net) on socially conscious consumerism, consumers were willing to pay up to 10 per cent more for green products. So, you get more customers, and can charge marginally more.
Dave Michaels, the Globe and Mail: Let's talk about bad times. We are still feeling the effects of the economic downturn. How do you recommend businesses cope with the pressures to cut costs and do away with green initiatives that might be costing them money?
Tima Bansal: It's a fallacy that green initiatives cost more. Cutting energy, reducing waste, and cutting inputs is just good business. Most innovations come in periods of crisis. Given that there is less money out there, we have an opportunity to think more lean. And, more lean is more green.
Dave Michaels, the Globe and Mail: Talk about the value on promoting the fact that you, as a business, are adopting green principles.
Tima Bansal: There is considerable value to 'being green.' Note, I'm talking about 'being' and not just 'promoting'.
Value is measured in lots of ways.
1) Customers. More customers will purchase from you and they will pay more. See the previous post.
2) Employee loyalty and employee compensation. In the war on talent, especially in knowledge-based industries, the best people have choices about where they work. The best people care about the company they want to work in. They want to work for a place that shares their values. Be green and be good, and you'll draw the best people. Look at non-profits, they draw some of the best talent and pay a fraction as much as corporations sometimes. But, people want to work for a place that they can go home at night and feel good about what they did during the day.
3) Investors. Socially responsible investing is on the increase. These investors are risk averse and stay the long term.
Dave Michaels, the Globe and Mail: How can we move from just the low hanging fruit to darker shades of green?
Tima Bansal: In the early stages, it's easier to take on the low hanging fruit -- incremental initiatives that can stand alone (recycling).
As you become more comfortable, you start thinking about your organization as a closed system. You want to use less input and create more output -- i.e., minimize your waste. So, don't just recycle waste, reuse it. But, you don't have to close the system yourself, the easiest solution is to find partners. An entrepreneur in the Sarnia-Lambton area built a greenhouse near a fertilizer plant to use the excess CO2 and energy. Fantastic opportunities can arise from collaborations with others' excess products, especially the waste of large companies.
From Robert Miller: As a consumer I know I am more and more skeptical when I see the green banner waved as it often is more of a marketing ploy than providing a net environmental benefit. How as a small business can I provide credibility that there is net environmental benefit of my product/service over the competition?
Tima Bansal: Great question. And, sorry to say, there is no silver bullet. Communicating credibly is a key issue for all businesses trying to do the right thing.
Authenticity comes, though, not from the advertising and self-promotions, but through the facts. So, provide details, even if that means you just send consumers to a website where you can offer more information. Social media will help to get your message out. The companies that are transparent in their processes and communications will be rewarded over the long term. The others with only green branding ('promoting' rather than 'being' green) will ultimately be found out.
Christine Mushka, the Globe and Mail: On the real estate front, what can small businesses - as tenants - do to push landlords to become more environmentally responsible. Can a small tenant make changes to buildings they don't own - and help the environment?
Tima Bansal: Ultimately, small businesses have little influence over landlords. But, the sustainability movement is just that -- a movement. So, you don't have to do it alone. Get the other tenants together to participate in a community- driven exercise. If you know you are going to stay awhile, you can do a cost sharing/cost recovery exercise. The tenants can offer to pay half the costs of new lighting and heating systems, but recover the costs through reduced rents. It's a win-win.
Often, landlords are resistant to changes. They just don't have the time or attention. Offering people the solutions to the problems is more than half the battle.
Dave Michaels, the Globe and Mail: We are out of time. Thanks, Prof. Bansal, for taking time from your schedule today. And thanks to our readers as well. Any final thoughts?
Tima Bansal: I want to thank you for the opportunity to contribute to this forum. I believe we are just at the front end of this movement. Small enterprises are going to be the ones with the new business models and new products -- the source of creative destruction in business-speak. Good luck on your journey.
Prof. Bansal will be co-hosting an event in Toronto, "Embedding Sustainability in Corporate Cultures," on Feb. 23. Check www.nbs.net for details.