The Eco-Entrepreneurship Opportunity

Effectively addressing climate change requires urgent and decisive action. The effects of the planet’s warming have never been more evident as extreme weather events, disastrous flooding, deadly wildfires, permafrost melts, biodiversity loss and impacts on human lives continue to feature dominantly in global news coverage.

Social media and real-time access to information have not only significantly influenced the credibility of climate change but also created momentum in the lobby for climate action. Governments and ordinary citizens alike are quickly realising the effects of climate change. The National Oceanic and Atmospheric Administration (NOAA) just released findings that in 2023, the U.S. set a new record for the number of weather disasters that cost 1 billion USD or more. In Mexico, Hurricane Otis became the strongest hurricane in the Eastern Pacific in the satellite era. The human impact of Otis was catastrophic and directly related to the speed at which the storm intensified due to warmer ocean temperatures associated with climate change. Right here in the Caribbean, sea level rise and increased impact of coastal erosion, are critically heightening the vulnerability of not only populations living in coastal areas but also affecting their livelihoods as fishing and agriculture economic sectors are affected.

However, what all this access to information has also demonstrated, is that where there is a crisis, there is also tremendous opportunity.

Climate mitigation, adaptation, resiliency and vulnerability have become the motivation behind extensive climate research, technological innovation, ESG-focused business growth and start-ups, investment opportunities and access to sustainability-driven financing. One of the fastest-growing business sectors motivated by climate change is the entrepreneurial one. Many eco-entrepreneurs, as they have been labelled, are quite literally changing the world. Within the Caribbean, there are eco-engineers like Vetiver TT and renewable energy suppliers such as Renergy TT. On a global scale, eco-entrepreneurs like Eco Star is a non-profit that recycles trash from homes, restaurants and schools across Kuwait. Yawa, another pioneering venture, generates water from wind, using a turbine to condense vapour from the air in Peru.

The goal of eco-entrepreneurship is to create new and innovative products, services, production methods, and processes that incorporate sustainability. A 2021 World Economic Forum article highlighted that 66% of all respondents surveyed consider sustainability when making a purchase. Similarly, a 2023 McKinsey article found that 78% of consumers consider a sustainable lifestyle important to them, with 60% of consumers willing to pay more for products with sustainable packaging. Additionally, Forbes, in 2021, noted a surge of climate tech start-ups, projecting growth in investment in green-business start-ups and corporate innovation to $3.4 trillion by 2030. This collective data underscores the rising demand for sustainable products and services among consumers and the continued growth of businesses in this space.

Eco-entrepreneurship goes beyond the realm of ‘green’ ventures which focuses on renewable energy, energy efficiency or recycling. These ventures alone aren’t sufficient. A collective call is being echoed for all businesses and industries to examine their operations, as well as supply and distribution chains with the aim of transitioning to more sustainable practices. This imperative holds true for territories where Republic Bank operates, spanning the Caribbean and Ghana, as companies of all sizes, including Micro, Small and Medium Enterprises (MSMEs), are shifting their focus to minimising their impact and actively contributing to the solution of the environmental challenges we all experience.

How can an entrepreneur like yourself align the mission and vision of your business with sustainability in mind?

Navigating this path isn’t without the challenges. To steer our efforts at Republic Bank, we’ve established an Office of Sustainability, embedding our Environmental, Social and Governance (ESG) strategy into the core of our overall business strategy. The creation of this Office is a testament to the strength of our commitment to the United Nations Principles for Responsible Banking and contribution to the attainment of the Sustainable Development Goals.

Acknowledging that while we are in the early stages of our journey, here are some insights from our experiences thus far which we believe can provide some guidance and bring benefits to any business, including entrepreneurs.

• Review Internal Practices. Businesses can start by assessing their internal practices and operations to identify opportunities to become more sustainable. Most times there are simple changes that can be made to refine a business’ operations, saving energy and cutting costs. It is recommended to start with the lowest-hanging fruit and scale up your efforts over time. For example, it may be possible to reduce your business’ energy consumption by using more energy-efficient machinery, upgrading to LED lighting or even ensuring machinery is turned off when not in use. As you upscale your sustainability efforts, it may become possible to supplement your traditional energy sources with renewable energies such as solar or by switching your fleet and company vehicles to hybrid or electric vehicles. What about your waste disposal practices? Is there any scope to make improvements there? As another illustration, we at Republic have partnered with recycling agencies to ensure paper and plastic waste are repurposed or disposed of as responsibly as possible.

• Sustainable Supply Chains. Working with your suppliers is another way you can bolster the sustainability of your business. Are there inputs to your company that you can replace with recyclable or organic materials? As an alternative, you can also reduce your carbon footprint by sourcing locally where possible. Local sourcing reduces the carbon footprint of your supply chain by minimizing transport costs. It also has the added benefit of contributing to local economies.

• Strategic alliances and incentives. Governments, academia, non-profits and larger companies have implemented a number of programmes aimed at supporting environmentally-conscious business owners. These programmes include tax credits, grants, subsidies, green loans, technical assistance, and other forms of support. In the instances where the framework for collaboration doesn’t yet exist, why not initiate it yourself? There may even be opportunities for you to build collaborative relationships with your competitors to influence sustainable practices for the benefit of all. An example of this would be having a united position on certain activities that are considered unsustainable.

Republic Bank stands as a trusted partner from whom entrepreneurs can seek support in shaping a more sustainable future. We're committed to lending and investing US$200 million to contribute to the environment and combat the effects of climate change by 2025. This financial support will be channelled towards accelerating the adoption of electric and hybrid vehicles, clean fuels, and renewable energy sources, and energy efficiency technologies.

Entrepreneurs, regardless of the size of their businesses, have the potential to position themselves for long-term success by integrating sustainability into their core strategies. Moreover, it is imperative that we recognise sustainability is no longer ‘optional’ but a mandate to which we must commit for the well-being of all people and the planet.

Each of us holds the power to build a better future for generations to come, and for businesses, a good opportunity must never be wasted.