Features : Ethics for entrepreneurs

Starting up a business can be a daunting process. Many people see environmental and ethical issues as the last things on their ‘to do’ list. They should think again. Dr William Young, Programme Co-ordinator for the MSc Sustainability (Business Environment and Corporate Responsibility) at the University of Leeds explains why.

 

One of the fastest-growing business sectors is the environmental technologies and services sector. Environmental problems such as climate change and waste have led to tightening legislation and taxes. Banks providing start up loans now ask about the environmental risk posed by the business. Some banks such as the Co-operative Bank, Triodos Bank and the Ecology Building Society positively encourage businesses established on environmental and ethical terms.

Environmental products and services

One of the fundamental principles of running a successful business is having a competitive advantage. This has two main elements: product differentiation and low costs. A strong environmental or ethical dimension can differentiate your product or service from your competitors. A recent survey by the Co-operative Bank found that 30% of consumers in the UK are very concerned about environmental and ethical issues while only 3% of the products on the market address these concerns.

Environmental products and services cost less to produce because, for example, of the reduced waste and energy bills - both now taxed through the landfill tax and the climate change levy - as well as being ahead of new environmental legislation. For ideas and information see:

• Greener By Design, where you can learn how to design products that are good for people, profits and the planet at BioThinking.
• EcoMarket International, a European platform for green products, services and information
• The Environmental Industries Commission, the voice of the UK's Environmental Technology and Services Industry 

Supply chain pressures

Apart from consumer demand, the main pressure that new and small companies face with regard to environmental issues is from business customers. Large companies wanting to protect their brand image from adverse pressure group or media campaigns (and increasingly to appease financial investors) push environmental issues onto their often smaller suppliers.

For example, Ford and General Motors demand that their suppliers have an environmental management system (similar to a quality management system but addressing environmental issues). Other companies such as Sainsbury’s and B&Q go a step further and demand that ethical and social issues be addressed, such as wage levels, working hours and health and safety. Addressing ethical, social, environmental and economic issues is often referred to under the generic term ‘sustainable development’.

Environmental legislation

The Environment Agency (the environmental regulator for England and Wales) has the first UK website, NetRegs, designed to help small businesses navigate through the maze of environmental legislation. It could save you time, money and hassle.

Useful sources of information:

• The Environment and Energy Helpline (0800 585794) is part of Envirowise, a government programme offering free, independent advice on practical ways to minimise waste and convert turnover into profit.
• Carbon Trust provides businesses, industries and public sector organisations with free, practical and impartial help and advice on how to cut their energy costs. The programme is an integral part of the government's climate change programme, aimed at meeting the UK's carbon reduction obligations under the Kyoto Protocol.
• Your local Business Link may be able to provide you with environmental information, help and grants. Call 0845 600 9 006 or see Business Link.
• The European Environment Agency has numerous publications including Environmental Management Tools for SMEs - A Handbook.
• The ENDS Report provides a weekly news service on environmental issues in business. 
• University of Leeds, School of Earth and Environment