| |
|
|
GreenMoney Journal - publishing since 1992
Fall 2010 issue
Socially Responsible Investing – Better Companies, Better Communities
|
| |
THE GROWING POWER OF GREEN BUSINESS
Alisa Gravitz and Todd Larsen
Green. It's the color of hope. Of justice and dignity. Of a healthy planet. That's why we've seen
the green business movement take root and grow over the past twenty years, linking millions of
consumers and investors to socially and environmentally responsible products and services.
Indeed, a thriving market has developed for socially and environmentally responsible products,
services and business practices. This green market - of consumers who demand green products and
practices, and companies that supply them - will continue to expand and will eventually become the
dominant way of doing business.
To take a quick snapshot of the green market, we've seen
the Co-op America Business Network - consisting of companies with a proven track record of
commitment to the environment, community, employees, and their customers - grow to over 2,500
businesses in the past ten years. Member companies provide a wide-range of products and services,
from household goods, to investment services, to travel. The first edition of Co-op America's
National Green Pages, which screens businesses for social and environmental performance, was just
12 pages long and reached only 20,000 people. Now an annual directory of 240 pages and on the Web,
the Green Pages reaches over 2 million consumers a year.
As their numbers expand, green
businesses are finding more opportunities to increase their voice and presence in the marketplace
and beyond. It is exciting to see green businesses increasingly address issues of social justice
and environmental sustainability within their own businesses and supply chains. They are also
working together to grow green markets and join in efforts with key allies to improve corporate
responsibility.
Coordination within the green business sector is already encouraging the
depth, breadth and standardization of social and environmental criteria. For example, the rapid
growth of the organic industry eventually led to the consolidation of 15 various organic standards
around the country into one.
Organic food businesses and their customers played a vital
role in making sure this government-mandated standard was in line with what consumers had already
come to expect from products labeled "organic." Fair trade organizations are currently working on a
similar consolidation of their criteria. While there is a good distance to go, it's becoming
increasingly easy for core green consumers to find companies that meet their social and
environmental criteria, and for green companies to position themselves with these consumers.
Since incorporating environmental and social justice values into business practice is central
to their missions, it is not surprising that green businesses are also using their growing power in
conjunction with consumers, investors and environmental organizations to promote a corporate
responsibility agenda. The Home Depot campaign, which led to Home Depot's commitment to purchasing
lumber from sustainably managed forests, is perhaps the most famous example of how businesses,
investors, consumers and activists worked together to put pressure on a large company to become
more responsible.
Hundreds of green businesses also played an important role in
encouraging the government of British Columbia and logging companies to preserve ancient coastal
rainforests. Fair trade coffee companies worked closely with NGOs to expand the sale of fair trade
coffees in this country and to encourage Starbucks and Safeway to start offering fair trade
coffees. From energy issues to global warming to ending sweatshops, green businesses are playing an
increasing and vital role in using their influence and voices to promote social and environmental
progress.
The continuing promise for uniting consumers to shift their purchases to green
products and services and create a green economy is enormous. According to Co-op America research,
the average American family spends over $17,000 a year on the top 15 expenditure categories, after
housing and taxes - items like clothing, food and household goods. Green businesses offer products
and services in each of these categories. If America's 100 million households begin to shift as
little as 10% of their purchasing to green businesses, there would be more than $170 billion a year
to put to work
building a green economy and a better world. Green business is a powerful
economic strategy for a sustainable future.
However, the green business sector also
has its challenges. Green businesses need to figure out more ways to reach a broader audience of
consumers (those who do not identify themselves as "green"). Green companies need to develop the
marketing strategies to continue moving into the mainstream without losing their core values. This
move is essential for the green business to impact the broader marketplace.
But, to make
this move, green businesses need to make it easier for consumers to select their products, while
attracting capital to make business expansion possible.
On the consumer side, the green
business sector needs to continue grappling with communicating to consumers that a product is
"green." Despite progress in several key green business industries, as of now, there is no
universal "green" label capturing a broad range of social and environmental issues for businesses
to use and consumers to seek out.
Consumers, businesses, and investors need to know how to
make wise purchasing and investing decisions without doing extensive research if green businesses
are to reach effectively beyond their core audience. A universal labeling system would help to push
the green marketplace to the next level, but with it will come another challenge: as larger
corporations sell certified "green" products, it will be difficult for small green businesses to
compete due to economies of scale.
In order to develop these economies of scale, green
businesses need to attract capital, but currently, there is no real means for these companies to
reach investors who share their values and vision. How can they raise capital to expand or retire,
while maintaining the original mission of the company?
How can they increase their
distribution networks without selling their businesses to multinational corporations? Where is the
significant venture capital for this sector? What kind of financing mechanisms can be developed to
help develop businesses who view sustainability as staying small and local, but who want to grow
and thrive within that context? How can they go public and preserve their green missions? Is there
a "green" public market in the cards - that not only helps achieve their business goals but
stewards their sustainability vision as well? There are no easy answers to these questions, but in
order to compete with multinationals, green businesses and green investors will need to develop the
answers.
The skills and initiative are present within the green business sector to meet
the challenges. Twenty years ago, no one predicted the tremendous successes that green businesses
have been already achieved. Green businesses are poised to expand into new markets, and the
creativity and resolve of people within this movement will lead this vibrant sector and create a
new, healthy way of doing business within the economy at large.
Article by Alisa Gravitz,
Executive Director, and Todd Larsen, Managing Director, Co-op America.
For more information go
to- http://www.coopamerica.org
|
|
|
Home | Archives
| Sponsors |
Links | Calendar
| Contact Us |
Advertising
| SRI News
MISSION
STATEMENT
The GreenMoney Journal encour-ages and promotes the awareness of socially
& environmentally responsible business, investing and consumer
resources in publications & online.
Our goal is to educate and empower individuals and businesses to make
informed financial decisions through aligning their personal, corporate
and financial principles.
“Responsibility from the Supermarket to the Stockmarket.”
The material presented in this news letter is for educational and
informa-tional purposes only. The GreenMoney Journal does not endorse
or recommend firms, products, funds or advertisers.
GreenMoney is a registered trademark.
Copyright 1995-2010 by the
GreenMoneyJournal ®
Green Money is a Registrated Trademark
of The GreenMoney Journal / Cliff Feigenbaum
|
|
|
|
