Be different, be green

WHAT differentiates your small business from the competition, and have you considered using the environment and social responsibility initiatives to set you apart?

Don't get me wrong; I am no tree-hugging environmentalist. I drive a fuel-guzzling Ford Falcon XR6 - or at least I do up until about the 12th of the month when I can no longer afford to put petrol in it. This column has a purpose for entrepreneurs, so bear with me.

On Tuesday I had coffee with Kevin James of Global Carbon Exchange (GCX), a South African company which helps businesses understand their impact on the environment and how they can work to reduce this. It's not a soft and fluffy consultancy: they put a monetary figure to your impact and try to improve the sustainability of your business.

I first met Kevin about 14 months ago just as the whole sustainability, carbon credit and environmental drum was starting to beat and it has been interesting to see how business is responding to it. It seems there have been some real mindset changes, judging from what he was telling me.

No bunny-hugger

Kevin certainly does not seem to be a traditional tree-hugger type either. He is a serious entrepreneur and business person who has managed to rack up an impressive client base over the last year.

Any suspicion that he's being palmed off on a social responsibility bunny and he'd rather not do business - he wants buy-in from the top executives, including the financial guys who must see a return on their investment.

One of the things that did emerge from this discussion which was also highlighted on the Unzipped podcast earlier this week was that a green environmental strategy can be a differentiator for small- to medium-sized enterprises (SMEs).

In much the same way that business had to review its spend to favour firms with strong black economic empowerment (BEE) credentials, there is a shift towards using those with strong environmental and sustainability credentials. Apparently even the major ratings agencies have now built in a sustainability aspect in measuring larger corporates.

Green credentials going places

I challenged Kevin and said there was no way a South African business would invest in or spend with you purely because you operate a green business. This could maybe happen in the US and Europe, but not in South Africa.

It would appear I was very wrong.

Kevin told me how a South African shoe-manufacturing SME had been able to come together with a JSE-listed retailer on the strength of their green credentials.

By Kevin's own admission the ongoing relationship comes down to the business basics of supply, demand, building relationships, maintaining clients and developing a quality product - but what has happened here is that a small business has lifted itself above its competition by differentiating itself.

On top of that he was able to rattle off a number of ways in which car companies, insurers, banks and other businesses could utilise the environment as a competitive advantage to stand out from the crowd.

Conclusion: while the basics of doing good business will go a long way towards making your small business a success, environmental, sustainability and social responsibility credentials could be just what you need to lift your head above the rest of the pack.

- Fin24.com