Green Technology: Green business for a green economy
People, planet, profit is the mantra being adopted by businesses in a move toward building a green economy. Scott Coney in his bookBuild a Green Small Business: Profitable Ways to Become an Ecopreneursets forth four criteria for a green business: Business decisions are based on sustainable principles, supplies environmentally-friendly products or services, greener than traditional completion, and has an enduring commitment to environmental principles in its business operations.
In a report Business Case for the Green Economy, Achim Steiner, UN Under-Secretary General and Executive Director of the United Nations Environment Programme, puts forward many examples of businesses that are turning out healthy profits while taking into consideration environmental and humanitarian factors.
An example quoted is how Kenya’s Equity Bank provides loans to farmers enabling access to water-efficient irrigation technology at a low interest rate. This has increased the bank’s profit by almost 30 per cent in a year.
An area that is a logical step towards a green economy is the energy sector. It is generally known that energy production, through the burning of fossil fuels is a major contributor of greenhouse gasses.
Greenhouse gas emissions have to be reduced by a massive 80 to 95 percent if global temperature increase is to be reversed. Producing green energy has not been economically viable in the past due to various factors globally including high cost, energy policies, perceived risks, and lack of infrastructure.
However, countries are beginning to push for renewable energy sources as technology is being improved and options like wind and solar are becoming increasingly viable.
Encouragingly, in January last year, German policymakers released a plan to make the country’s electricity production system one hundred percent renewable by the year 2050.
Government decisions like that of Germany, paired with economic incentives and policies, will go far to grow green businesses involved in producing energy. In Malaysia the Sustainable Energy Development Authority Act 2011 and Renewable Energy Act 2011 was the start of a viable implementation and administration of the feed-in tariff mechanism.
Simplistically this system can be understood as one that allows an individual or company to sell renewable energy to Tenaga National Berhad for a fixed price. This is a step towards aiding businesses or individuals that produce energy via biomass, biogas, hydropower or solar photovoltaic technologies to have a more viable business.
As a result many companies are starting to invest in these alternative ways of producing energy. One of the challenges previously faced was the high investment cost of setting up solar panels. Whilst this is still a challenge, the various initiatives by the government, advancement in technology and also increase in demand for clean energy have gone a long way to make this a potentially profitable business.
In addition, SIRIM, the national industrial research and standards development organisation provides plenty of data through its various research projects, as well as technological backing for entrepreneurs wanting to not only get into the solar power business but many other green manufacturing options.
Green Innotech Sdn Bhd, SOL-lite Sdn Bhd and Solar Voltaic are some examples of the many companies that have boomed in Malaysia, providing services and products for solar energy production – a wise move for a country blessed with sunshine almost all year long.
More than just equipment, processes and technology that are obviously needed in support of a green economy — photovoltaic cells, pollution controls and sustainable company policies — businesses that were not typically green have also ventured into the field.
An example of this is ecopreneurs who are creating green fashion. These are clothes that are made ethically and ecologically while not compromising on profit, are produced by locals and support local enterprise.
Furthermore, the materials used are organic, recyclable and have not caused as much damage to the environment in its production compare to its un-green counterparts.
Green also means waste produced as a by-product in the production is well-handled. Giant Swesish fashion brand H&M has successfully launched their line of eco-friendly, sustainable clothing.
Comprising, organic cotton, hemp and linen as well as recycled wool, plastic and polyester. In Malaysia there are many organisations that have worked to bring indigenous and cultural clothing and accessory making techniques to mainstream shoppers. The next obvious move is for consumers to embrace these green fashion options.
Green business is a gamechanger in the sense that now SMEs and ecopreneurs have unprecedented opportunity to compete in the green economy. It is a new economic system where profit at any cost and majority marketshare is no more the most desired outcome.
Balancing the sustainabilty and social factors while maintaining a profitable business is how it must to be played moving forward.