Many eco-minded entrepreneurs are well aware that what motivates the average worker has shifted dramatically. People decide to leave stable jobs and oftentimes pursue their own ventures for many reasons. These include a desire for independence, flexibility, and a passion for a unique business idea.
However, for the new generation of Millennial entrepreneurs, starting a business goes beyond financial stability and personal goals.
Numerous studies have shattered the inaccurate notion that people in their 20s and 30s are lazy, arrogant, and self-entitled. Instead, they’ve shown that sustainability is just as important as profit for the youngest generation of eco-minded entrepreneurs.
More and more people decide to start businesses that help the planet either directly — by creating a product or service that helps with waste, pollution, and climate change — or indirectly, by implementing the latest sustainability practices and reducing carbon footprint as much as possible.
Back when sustainability wasn’t more than a trend, a common misconception was that being eco-friendly was too expensive. It was only worth it for big corporations. Nowadays, 62% of executives agree that businesses need a sustainability strategy to stay competitive and that being eco-friendly can actually reduce business expenses and boost customer trust.
Young, eco-minded entrepreneurs are balancing sustainability with financial returns.
Starting a business is no longer just about financial gains. According to a 2017 report from HSBC, the motivations of young entrepreneurs are less about cash and more about the good of the planet. Thus, 25% of entrepreneurs in their 20s want their businesses to positively impact the environment and the local community. By comparison, only 13% of entrepreneurs in their 50s share the same values.
This commitment to sustainability doesn’t come at the expense of profit, however. Millennial entrepreneurs still want their independent ventures to bring them personal fulfillment. However, they’ve chosen to balance financial returns with sustainability.
This approach can be applied to all endeavors, even when a company’s products and services might not seem to have a lot to do with the environment. Take waste management, for example. For years, businesses such as warehouses, hotels, and restaurants have generated huge amounts of waste. They traditionally disposed of it by tossing it all in a rubbish bin.
Concerns over waste-handling practices are fueling innovation.
Now, with waste concerns on the rise, eco-minded entrepreneurs are trying to dispose of it more responsibly by using special machines for waste recycling. Also known as balers or compactors, these machines compact waste such as cardboard and PET bottles. This saves space, reduces waste collection costs, and even helps businesses make money by recycling their waste.
This is just one of the examples that shows that being eco-minded doesn’t have to apply to only one field and that sustainability can also be profitable when it’s done right. An analysis from McKinsey revealed further ways in which companies can use sustainability to drive growth.
- Conduct better resource management — water, energy supply, etc. — to reduce operational costs.
- Reduce unnecessary packaging across the production chain to cut costs and reduce waste at the same time.
- Use the latest technologies to develop innovative, sustainable products.
- Leverage influence to educate clients on sustainability matters.
But do consumers really care about sustainability?
The more research that’s conducted on pollution and climate change, the more businesses are starting to understand the importance of sustainability. If sustainability had been just a trend, eco-minded initiatives would have died out by now. Instead, efforts are getting stronger.
It’s quite rare these days to see a young, eco-minded entrepreneur start a company without having some kind of sustainable, community-driven mission statement. What’s more, the big brands are picking up on this too and starting to prioritize sustainability initiatives. But the big question remains…do customers really care?
In short, yes.
Modern-day consumers, especially Gen Z and Millennials, place sustainability quite high on the list of expectations they have from brands. They’re even willing to say goodbye to companies they’ve relied on for years if those brands show no regard for the environment. Nowhere is this shift more obvious than the fashion and skincare industries, which are currently undergoing massive changes.
The pandemic of 2020 encouraged a lot of folks to hit the ‘Reset’ button.
During the Covid-19 pandemic, many consumers changed their behavior and lifestyle and began making more sustainable purchasing decisions. Companies such as Estée Lauder have adapted and started reserve-mentorship programs. These programs partner seniors with young employees to ensure that the brand stays relevant and aligned with audience concerns.
For consumers, sustainability is not a fad. On the contrary, they are willing to pay extra for products and services, as long as the company supports environmental and social activism.
One study found that 60% of online shoppers don’t mind a higher price tag when it comes to sustainable products. That same study also found that they’re more likely to stay loyal to brands that promote these values.
It should also be pointed out that the modern consumer is informed and very well aware of the possibility of “greenwashing.” This is why companies that advertise themselves as “green” but don’t do anything about it in practice — and don’t back up their claims with facts — are quickly punished by consumers. 75% of Millennial consumers will take the time to check if a company is telling the truth. If their research findings don’t match the ads, recovering that lost trust is almost impossible.
Impact investing is also on the rise among Millennials.
Starting a sustainable business isn’t the only option that eco-minded Millennial entrepreneurs have when deciding how to grow their wealth. In the past few years, there’s been a noticeable bump in impact investing. This investment strategy aims not only to generate profit but also to benefit social or environmental causes.
Although impact investing is associated with a certain level of risk, it didn’t become any less popular during the Covid-19 pandemic. One study found that 57% of investors didn’t change how much capital they put into impact investment projects.
As the generation that’s most likely to support social and environmental initiatives, Millennials are loving impact investments. According to a 2018 U.S. Trust survey, 87% of Millennials believe that sustainability should play a major factor in investment decisions. They would choose impact investments when given this option. Entrepreneurs that truly care about the environment are thus much more likely to gain a hearing when raising much-needed capital.
