Green business and entrepreneurship

With the existential threat of climate change, environmental entrepreneurship is an important linchpin in humanity’s concerted response.

Green businesses can be defined as “practices as efforts that a company makes to decrease negative impacts on local and global environments, the economy, and society.” A related concept is environmental entrepreneurship (sometimes also called “ecopreneurship”) which is ‘entrepreneurship through an environmental lens’. Put differently, it is about “creating value through ecological innovations and products”.

Environmental entrepreneurs address both traditional economic problems and environmental degradation. They create eco-friendly businesses and combine profit orientation with the ambition to create a greener business world. Quite simply, much of environmental entrepreneurship is about solving old problems in new ways.

To achieve today’s climate goals, there is an urgent need to accelerate and strengthen technological innovation for the widespread adoption of environmentally-friendly, cost-effective and better-performing climate technologies. To that end, environmental entrepreneurs bring green products and technologies to market to replace traditional products which are better for the environment. Entrepreneurship has also managed to achieve positive environmental and economic outcomes in as many as 35 Sub-Saharan African countries. There are several noteworthy examples of African businesses that are spearheading innovative climate-friendly solutions. Similar calls for cleantech innovators are emerging also in Asia. Globally, sustainability has steadily become a business imperative and social concern.

Indeed, entrepreneurs are important agents of change. However, they are surrounded by and subjected to other institutional actors (such as the government, local communities). Governments, in particular, exert considerable influence on capital flows, production incentives and capacity building which affect entrepreneurial activities. This nexus of institutional actors and interests can both enable and encumber entrepreneurs in their business. Research has shown that environmental entrepreneurship can be inhibited by government bureaucracy or encouraged by government programs and supportive culture.

Climate change is a complex problem that requires the cooperation of multiple stakeholders in the public, private and people sector. With supportive government policies that promote entrepreneurship, society can wield a wider range of climate-friendly solutions. Singapore is an example of a developed city-state where environmental entrepreneurship is thriving.