July 15, 2024

Advancing Business Excellence

Pioneering Corporate Success

Why A Greener Future Depends On Nurturing Sustainable Entrepreneurship

Mitigating global warming and working towards a low-to-net zero carbon future demands novel solutions conjured up by multiple stakeholders. Today’s rapidly evolving landscape already reflects this.

Countries, corporations and citizenry are all displaying a general willingness to embrace a greener future. But leading from the front are an emerging group of innovators who believe in a dual commitment to profitability and societal impact – sustainable entrepreneurs.

They breathe life into ventures and businesses that are purpose-oriented not just profit-driven. Sustainable entrepreneurs embrace circular economies, environmentally friendly operating practices, ethical labor norms and community engagement to ultimately make their core service provision or product offering all about doing things differently.

This may involve a diverse range of ventures from sustainable agriculture to circularity start-ups, from renewable energy to cleantech solutions and eco-friendly versions of existing products central to our lives. Many appeal to an increasingly conscientious consumer base.

However, entrepreneurs striving to achieve such a fusion of economic, social, and environmental interconnectedness in their businesses face numerous operational challenges.

Meeting The Challenge Of Funding And Nurturing

Undoubtedly, securing investment or working capital remains one of the biggest challenges when it comes to establishing a sustainable business venture. Not only that, addressing a sustainability premised challenge, which may be quite capital intensive, while remaining financially viable to ensure a future for the business is a related dilemma.

Yet the world continues to witness the rise of sustainable entrepreneurship reflecting a paradigm shift, wherein success is measured by the positive influence a business exerts on the world in near tandem with financial metrics. Many have proven that going green does not diminish profitability.

Today, stakeholders and investors see sustainable entrepreneurship as not just a fad or a trend but a fundamental shift in the way the world perceives and conducts business in its march to a net zero future by 2050.

An eclectic capital resource pool

Support is at hand and it potentially takes several forms. In many Organisation for Economic Co-operation and Development (OECD) markets, state grants of varying degrees are widely available.

Most prominent examples include U.S., U.K. and E.U. state support for sustainable aspects of start-ups and small and medium enterprises (SMEs). Indeed, many governments also compartmentalize business grants from what may be regarded as funds for research and development of a sustainable idea that an enterprise may be working toward.

Multilateral institutions also playing their part. For instance, the United Nations Development Programme (UNDP) and UN Trade and Development (UNCTAD) have been instrumental in empowering entrepreneurs with seed capital, business training and mentoring.

An often preferred, but very competitive, sustainable entrepreneurship seed capital procurement route is via venture capital and social impact funds, in exchange for a stake in the venture. Enterprise loans from commercial entities specializing in SME funding are also an option in many developed and emerging markets.

However, one crucial route – somewhat underutilized by sustainable entrepreneurs – is submissions for sustainability prizes and awards. Take for example the Zayed Sustainability Prize (ZSP) – the United Arab Emirates’ (UAE) global award for sustainability and humanitarianism named after the country’s founder – which carries a $1 million recognition grant and has been running since 2008.

Fiercely sought after awards like these offer recognition of human ingenuity as well as the spirit of private enterprise. Of course, no entrepreneur should be under any illusion that such a route is any less competitive compared to others.

But imagine the boost an enterprise could receive from not only procuring whole or partial seed funding for a sustainable business idea via an award as well as gaining instant international recognition for a proven, yet nascent, green concept or business idea.

To 2050 and beyond

Options there are many, and no route – be it an award submission to ZSP or an application for a multilateral institution’s bursary – is a walk in the park. But who said bringing about change was, is, or will ever be easy.

These plethora of options exist simply because a green future for the planet and meeting net zero targets by 2050 depends heavily on sustainable entrepreneurship and incubation of new ideas.

If anything, more capital allocation and resources would be needed. That’s because both the public as well as private sectors recognize that sustainable entrepreneurs have the power to create lasting, positive change on a international scale by aligning profit motives with a commitment to social and environmental responsibility.

More so, perhaps at a pace and with a level of agility which larger organizations may not be able to display. Therefore, the time is now for those doing the nurturing as well as those being nurtured to up their game and truly find their place in an emerging low-to-zero carbon landscape.