Innovation

Your Next Big Thing: Green products and services

Written by Jim McElgunn

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Surprise! The greenest pasture for eco-friendly products and services could soon be big business, thanks to the unlikeliest of environmental champions: Wal-Mart. The retail giant is committed to spending US$500 million a year on initiatives to increase its environmental friendliness, such as boosting its truck fleet’s fuel efficiency 25% over three years and its stores’ energy efficiency 30% over four years.

This unexpected new “Wal-Mart effect” will create openings for entrepreneurs. Craig Cuddeback, a venture capitalist at Ann Arbor, Mich.-based Cleantech Venture Network, suggests helping firms create greener supply chains by designing packaging and products to minimize waste and use less energy. And consultants can help companies identify the green investments with the biggest payback.

While few firms can achieve environmental sainthood overnight, they can do so incrementally. Management consultant Jim Harris, former federal Green Party leader, calls the energy-retrofits market — installing everything from LED lighting to triple-glazed glass — hugely underserved. Harris cites opportunities for energy-service companies to finance and manage retrofit projects, and for specialty contractors and makers of efficiency-boosting materials.

Of course, many firms won’t act unless forced to by law. Some governments, such as California’s, are now cracking the regulatory whip. Others, including Canada’s, prefer a largely voluntary approach, although the Conservatives face pressure to stiffen regulations now that polls show the environment is rivalling health care as voters’ top concern. Entrepreneurs may find the most room in whip-cracking jurisdictions such as the U.K., whose climate-change program sets tough energy-efficiency standards. Shell Springboard, a funder of low-carbon business ideas, predicts this will create a $7.5-billion compliance market by 2010. That will drive demand for redesigning existing products, adapting infrastructure and devising low-carbon means to deliver services.

Originally appeared on PROFITguide.com