Starting an Earth-Friendly Business
Once considered a feel-good niche supported by a dedicated but small base of consumers, earth-friendly businesses are becoming more mainstream -- and more profitable -- than ever. Many environmentally friendly market segments, such as renewable energy, are being driven by climate change and other large-scale phenomena.
Entrepreneurs starting an earth-friendly business should keep in mind that it involves much more than simply promoting an image of sustainability. We tend to think of "green" businesses as those selling environmentally sound products, but it can also refer to sustainable office space, low-impact manufacturing or related practices.
The most successful green businesses typically are those whose founders and management team are genuinely committed to sustainable practices, since consumers often see through insincere "green-washing" tactics. That's why the certification process is so vital to the integrity of green businesses.
The Importance of Environmental Regulations and Incentives
Certain fledgling industries deemed important to environmental initiatives, such as solar and wind power, often receive a certain amount of subsidization to drive growth. These may be direct investments by the federal or state government or rebates provided directly to customers, which has been the case with rooftop solar power installations. Businesses in renewable energy and other earth-friendly fields thrive when there are incentives, although they may be limited visibility during times of economic or political unease. For example, lawmakers hostile to green businesses may be less willing to extend these rebates and incentives, thus having a chilling effect on the industry.
Meanwhile, regulations on air quality and carbon emissions -- for example -- may help bring the cost of coal and other, more highly polluting energy sources up to par with renewable energy sources. As a result, such regulations (perhaps in the form of a carbon tax or stricter pollution standards in general) can help emerging earth-friendly businesses compete.
Earth-Friendly Businesses & the Certification Process
Several international and domestic certifying organizations, including some governmental agencies, exist with the purpose of maintaining the integrity of so-called green practices. Some of the more recognizable certifications, often prominently placed on packaging, include the Fair Trade and Certified Organic labels.
Becoming certified shows consumers and business partners that your business and/or products meet the criteria set out by the certifying body. For example, you can't legally advertise your canned tomatoes in the U.S. as "organic" even if you use organic methods in the absence of certification from the U.S. Dept. of Agriculture (USDA). Keep in mind that different organizations and agencies usually have different standards for the same thing.
Domestic (U.S.) Certification Programs:
- Green Seal: Offers comprehensive green certification services for products, services and businesses that meet certain standards. Green Seal certifies a wide variety of products, services and business processes.
- USDA National Organic Program: Organic certification for food, natural textiles and other agricultural products. Organic growers selling less than $5,000 annually may use the "organic" label without undergoing the rigid certification process.
- LEED Certification: The non-governmental U.S. Green Building Council has a multi-level building certification system for energy-efficient and otherwise green buildings, called Leadership in Energy and Environmental Design (LEED).
- Scientific Certification Systems and Smartwood: Both organizations certify materials and processes that adhere to sustainable forestry standards developed by the Forest Stewardship Council.
- Green-e: Certification related to the use and/or generation of renewable energy and/or carbon-reduction practices.
- Chlorine Free Products Association: Certifies products and business processes that are free of chlorine.
- Energy Star: Managed by the U.S. Environmental Protection Agency and the U.S. Department of Energy; certifies products, buildings and business facilities that meet energy efficiency standards.
Earth-Friendly Business Resources
- Starting a Business: Green Businesses: Basic steps and information on starting a Green Business. From the U.S. Small Business Administration (SBA).
- Green Business Guide: FAQs and resources to help with the development of green products (SBA).
- Tips for Energy Efficiency: Ways to reduce your energy use and utility bills (SBA).
- Green Business Case Studies: How Ben & Jerry's, Whole Foods and other well-known businesses employed green business practices (SBA).
Get Legal Help with Your Green Business
No matter what kind of business you start, you probably will run into situations requiring legal know-how. But earth-friendly businesses, particularly those that are heavily regulated or subsidized, often require even more legal expertise. Consider meeting with a business and commercial attorney familiar with environmental regulations and green businesses for additional help.
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