Just How Green are Green Businesses?

By Jim Wyss

RISMEDIA, April 28, 2008-(MCT)-Global warming may be bad for the environment, but it has been great for one industry: eco-marketing.

With April being the month we observe Earth Day, it seems every industry is eager to tout its green credentials. There are environmentally friendly spas, green printing presses, green liquor companies, and green alternatives to inflating the tires of your gas-guzzling SUV.

There are at least two good reasons for the green push: the environment, of course, and greenbacks.

According to the LOHAS Journal, which measures the green marketplace, 19% of U.S. consumers buy goods with an eye on their sustainability and environmental impact. Green products generate about $227 billion in sales, and that could reach $1 trillion annually within 12 years, the journal estimates.

“Every major player in every industry is trying to figure out an environmental strategy,” said Marci Zaroff, the founder of Under The Canopy, a Boca Raton, Fla.-based manufacturer of certified organic clothing available at more than 300 outlets, including Target and Macy’s. “It’s not about keeping up; it’s about not being left behind.”

For Shorne “Q” Fortune, going green is about getting ahead of the competition. Last year, Fortune and his wife, Grerimar, changed the name of their Miami scooter company from VIP Vespa to Grow Verde to reflect their new take on business.

Rather than focus on the glamour and convenience of zipping around South Beach on Vespa scooters, they are recasting the company as an eco-friendly alternative to renting or owning a car.

Verde (Spanish for green) now works on a membership basis, a bit like ride-sharing pioneer Zip Cars.

Fortune says personal conviction and client demand are fueling the change.

“We talked to our customers and they wanted some sort of service they could use where they didn’t feel guilty,” he said. “We all have to do our part to reduce our carbon footprint.”

The company will be making its formal launch in June, but the change is already making a difference. “It has been getting us a lot of attention,” Fortune said. And getting noticed is half the battle.

But with everyone from Kmart to Clorox rushing into the green marketplace, some worry that consumer confidence in the emerging niche might be trampled.

In 2007, environmental marketing company TerraChoice studied 1,018 products that made environmental claims. It found all but one of the items made statements that were either demonstrably false or misleading.

The TerraChoice study may have suffered due to overly stringent standards-everything from outright lies to vague wording sent up red flags-but it does illustrate problems in the green marketplace, said Joel Makower, the executive editor of GreenBiz.com, an online publication that follows environmental business trends.

While there are standards for energy-efficient appliances and green construction methods, “there is no clear definition for what makes a green business,” he said. The category can include everyone from the corner shop selling hemp socks to the industrial dry cleaner investing in energy-efficient machines.

“That makes it a bit of the Wild West out there,” Makower said.

Nature and commerce abhor a vacuum, and more than 140 organizations have stepped in to try to formulate guidelines for running a green business-but there is no consensus, Makower said.

Hilary Kusel is the executive director of the Green Business Alliance, a Boca Raton-based organization that aims to help businesses adopt environmentally sound practices.

For a starting price of $475 a year, the Green Business Alliance will send its proprietary list of actions to “greenify” your business or home. The list runs from printing on both sides of a sheet of paper to giving those who carpool preferential parking spaces.

“Each one of these steps will have a positive impact on the environment, their workplace and hopefully their bottom line,” said Kusel, who has a background in international management.

Once a company returns a notarized form stating it is in compliance, the Green Business Alliance includes it in its directory and provides decals, lapel pins and other marketing material.

“What we would like to see is the greenified logo become the green version of the Good Housekeeping Seal of Approval,” she said, referring to the certificate around since 1909 that comes with a money-back guarantee.

Decals or not, consumers are rewarding companies that have bona-fide green credentials.

Zaroff, of Under the Canopy, started her firm in 1996 when the organic clothing industry was more about “hippie than hip.”

Since then she has seen sales soar 50% to 100% annually into the “double-digit millions” as the niche has gone mainstream.

But Zaroff worries that newcomers, drawn by profits more than environmental conviction, might not be as careful about vetting their suppliers.

“Consumers need to be aware and beware,” she said. There are companies in her industry, she said, making environmental claims they probably cannot support. “There are some investigations starting and people will get caught with their pants down,” she predicted.

Trying to separate the truly green from the green-washed is part of what Thomas Bache-Wiig is hoping to do with his new website: www.thisisgreen.com.

The Coral Gables, Fla., resident carries a fashionable briefcase made of inner tubes, has business cards printed on recycled cereal boxes and buys carbon credits from Terrapass.com to offset driving his Mini Cooper.

His website, founded with business partner Jorge Guerra, provides links to almost 1,000 environmentally friendly products from exotic trash cans made out of potato-chip wrappers, to more mundane, energy-efficient light bulbs.

“We’re not tree huggers, and not all ‘green things’ are necessarily good,” said Bache-Wiig, a native of Norway who works full time as an architect. Still in its infancy, the site hopes its mix of video reviews and reader-generated content will make shopping for eco-friendly goods, well, enjoyable.

“In the ’60s and the ’70s they tried angry, and it didn’t work very well,” he said. Rather than browbeating people into making changes, “what we want to do is inspire people to make environmentally sound decisions,” he said.

But going green has its costs.

Ana Rabel and her daughter Laura Alfonso pay almost three times as much for the eco-friendly products they use at the Green Gables Cafe, the organic eatery they opened six months ago in Coral Gables.

Their cups are made of biodegradable cornstarch, the napkins are made from unbleached recycled paper.

“We don’t use plastic at all-but let me tell you it can be expensive to be responsible,” said Rabel.

“If it means making a little less money right now until people are educated, and I can add those costs into the price of my food, then that’s what we have to do,” she said. “It’s the only responsible choice.”

The driving force for many businesses looking at green technology isn’t altruism but higher bills, said Byron Kennard of the Center for Small Business and the Environment in Washington, D.C.

As utility prices continue to soar, small firms are turning toward power-saving light bulbs, thermostat timers and water-efficient toilets.

A survey by the National Small Business Association found 73% of small business owners would invest in energy-saving products if prices keep rising.

While the environmental community has largely focused on massive corporate polluters, small businesses make up 98% of the economy. And if that community truly embraces green practices the cumulative effect would be massive, he said.

“If the planet is going to be saved,” Kennard said, “it’s going to be saved by small businesses.”