How To Build Sustainability Into Your Startup Business Model

How to build sustainability in your startup business model

Sustainability is a hot topic in the business world right now. More and more companies are realising that they need to take steps to become more environmentally friendly for long-term sustainable success. But for startup businesses, sustainability can seem like a bit of a challenge. How do you build it into your business model without sacrificing profitability?

There are many myths and misconceptions surrounding sustainability, which can make it seem like a bigger hurdle for small businesses to overcome than it is. Not only is it possible to create a sustainable startup that turns a profit, but any business needs to incorporate sustainable practises to even survive in the current market.

In this article, we’ll discuss some of the key features of a sustainable startup and practical tips on how to build sustainability into your business model.

How Do You Define A Sustainable Startup?

Sustainability — as defined by the Oxford Dictionary — refers to the “use of natural products and energy in a way that does not harm the environment”. However, over time the concept of sustainability has taken on additional meaning beyond this initial definition. In most literature and discourse surrounding the topic, the issue of sustainability is divided into three facets – social, economic, and environmental. For a business to be considered sustainable by the modern definition, it must address all three concerns.

A sustainable startup is a business that can grow and thrive without harming the environment, society, or the economy. Your business might take great care to reduce its carbon footprint, but if it relies on exploitative labour practises, perpetuates social inequality, or contributes to an economic bubble, then it’s not truly sustainable in accordance with the three pillars.

This means that you need to consider sustainability throughout your entire business model. Do you have a fair and equal hiring policy? Do you source materials from an ethical supplier? Do you pay your employees a living wage that is on par with inflation and the rising cost of living? Can you turn a profit without exploiting unregulated labour markets in developing countries?

Why Does Sustainability Matter?

Many people are still under the impression that “sustainability” is just a buzzword. For others, it’s a principle that already guides their day-to-day food choices, product purchases, and general activities. But regardless of your opinion on the topic of sustainability, you just can’t afford to ignore it as a startup founder! With global awareness of the climate crisis growing, consumer behaviour is beginning to change. Becoming sustainable is not just the right thing to do, it also makes the most sense for your business.

Let’s take a look at some of the reasons why every startup needs to factor sustainability into their business model.

Benefit From Genuine Consumer Demand

According to one survey by the Office for National Statistics, two-thirds of adults in Great Britain are worried about climate change. Similar figures can be found across both the developed and the developing world, where concern for the climate crisis is starting to have a real effect on consumer spending habits. In the US and Canada, an IBM survey revealed that 69% of consumers were willing to pay extra for more economically sustainable products. Further to this, a global report from The Economist Intelligence Unit showed a 71% rise in online searches for sustainable goods worldwide over the past five years.

These figures show that there is a genuine demand for more sustainable products and consumers are increasingly seeking out businesses that reflect their eco-conscious values.

Enhance Your Brand & Leap-Frog The Competition

This “eco-awakening” is an opportunity for new businesses to fill a gap in the market that is far from being met. Larger, well-established companies are still slow to change their processes and adapt to increased consumer demand for more environmentally friendly products. As a startup, your business will still be in a highly flexible phase, which makes you ideally positioned to implement sustainable practices from the outset. It’s easier to start on the right foot than restructure your entire business model further down the line to become more sustainable.

And by centralizing sustainability into your business, it’s easy to make it a unique selling point and stand out amongst the competition. That being said, consumers are becoming acutely aware of greenwashing, and they’re not easily convinced when large multinational corporations suddenly pivot towards sustainability. As a newer company, you have the advantage of introducing your brand to the market as an eco-friendly solution, without the need to carry out damage control on prior misdemeanors. It’s being increasingly viewed as inauthentic!

Do Your Part For The Future

The one person who has singularly caused the most damage to the environment is often cited as being Thomas Midgley Jr., the inventor of both (extremely toxic) leaded gasoline and CFC-releasing aerosols and refrigerators. As an inventor, he made If you’re running any type of business, you’re likely contributing to the climate crisis. As business owners, there’s always a hope that your business will grow and continue to expand, but it’s also important to consider, at what cost? By upholding sustainability as a core value within our business models, you can ensure that your legacy is a positively sustainable one.

millions of dollars for General Motors revolutionized the refrigeration industry, and nearly killed everyone on the planet through slow radiation poisoning.

Luckily, the hole in the ozone layer caused by his freon gas inventions was discovered before it caused irreparable damage to the planet. Sadly, for Thomas Midgley Jr, his story acts as a lesson for modern innovators and demonstrates the enormous power just one individual can wield over the entire environment. What kind of future legacy do you want your business to have?

The seven hottest years since records began in 1880 have all occurred after 2014. The introduction of greenhouse gases to our atmosphere is causing unprecedented runaway warming of the planet. The main contributors to this process are global transport use and electricity consumption, but industry adds a whopping 23% to this figure each year.

If you’re running any type of business, you’re likely contributing to the climate crisis. As business owners, there’s always a hope that your business will grow and continue to expand, but it’s also important to consider, at what cost? By upholding sustainability as a core value within our business models, you can ensure that your legacy is a positively sustainable one.

5 Practical Ways To Make Your Startup More Sustainable

Even if you understand how important sustainability is, it may not be clear how to integrate it within your business. Here are some practical ways you can position your startup to become more sustainable.

1. Keep It Local

On average, a product travels over 1,500 miles from its place of production before purchase by the end customer. By sourcing products and materials from local suppliers where possible, you can cut greenhouse gas emissions by up to 80%. This isn’t to mention the many other hidden costs that come with importing products from abroad, such as customs clearing fees.

By keeping production local, you also get the added benefit of "COVID-proofing" your business.  Over the past two years, businesses have seen their supply lines disrupted on an unprecedented scale. Lockdowns, staff shortages due to illness, and quarantine regulations have led to many businesses struggling to get their products to consumers.

With a strong local presence, you can ensure that your business is in a stronger position to overcome future disruptions. What’s more, market research heavily indicates that consumers are more willing to purchase products that are sourced locally.

2. Remote Working

Remote working is here to stay, and not just because people enjoy writing reports in their pyjamas. During the first COVID-19 related lockdowns in 2020, a significant decrease in NO2 and CO emissions was recorded across the world. With fewer people commuting to work and a sudden reduction in international flights, fewer toxic chemicals were entering our environment. What the pandemic demonstrated is that remote working is entirely possible for nearly any business, and with the right tech solutions in place, it’s even preferable for many people.

A report by Catalyst showed that productivity often increases during remote working, so this is a concern that business owners can lay to rest. Not only does remote working improve employee mental health, but it does so without the environmental impact of forcing employees to make an unnecessary commute every day.

And if you’re on a startup budget, it makes even more sense to ditch the office overheads and fully embrace remote working. You can access a diverse talent pool from all corners of the globe to help propel your business to new heights — all while minimizing expenses.

3. Utilize The Closed-Loop System

In a report by the Ellen MacArthur Foundation, millions of tones of plastic are being produced each year, with half going to single-use items. This includes packaging and plastic products that we use for a very short time before throwing them away. By 2050, it’s expected that there will be more plastic in the ocean than fish.

Closed-loop production processes are designed with the specific goal of recycling all waste products into new materials for further use. In this system, nothing goes to waste every component is used and fully reintegrated back into the production cycle. By creating a closed-loop system, you can significantly reduce the amount of waste generated by your business. As an added benefit, your business can take advantage of a resource that would otherwise be discarded and add new revenue streams.

4. Manufacture Products With A Longer Lifespan

Planned obsolescence was invented to sell more products as quickly as possible. However, many businesses now recognize that their customers are demanding higher quality and longer-lasting products. This is particularly true for millennials and Gen Z consumers, who place a higher value on transparency and eco-friendly business practices. People are seeing through the con of planned obsolescence, and they want more value from the products that they purchase.

It stands to reason that by extending the lifespan of your products and creating items with environmentally friendly and more durable materials, you can reduce your company’s negative environmental impact. It also builds trust between business and consumer, which leads to greater brand loyalty further down the line.

5. Consider Your Packaging

You might not consider the materials used to package your products to be that important, but they can have a significant environmental impact. Every year the UK generates over two million metric tonnes of plastic packaging waste. In the US, packaging accounts for just over 28% of municipal waste.

By using alternatives such as recycled paper or cardboard, you can considerably reduce the amount of plastic waste generated by your business. If this is not an option, there are now even more alternatives to plastic packaging available for businesses on a budget. These include many biodegradable materials that break down naturally such as hemp, bamboo, and corn-starch. You can even consult with a specialized packaging company that offers sustainable solutions to find something that works within your budget.

Sustainable Startups Are The Future 

While it’s impossible to solve the environmental crisis overnight, placing sustainability at the center of your business model goes a long way towards getting things back on the right track. In this information age, consumers are hyper-aware of their impact on the environment, and the younger generation is no longer willing to accept businesses that engage in environmentally harmful practices. Putting profit above all else, including people and society, will harm any business in the long run.

“Sustainable” doesn’t just mean sustaining the planet; it also puts you in a better position to sustain your business’ success.

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