To set up and head a commercial enterprise on a sustainable basis and making it financially successful is a challenging task. One of our main jobs is to support those who do just that.
As a professional organization working with pioneers and start-ups for many years now, we have learned that sustainable businesses only make sense when they make money. A responsibility towards the environment and to humanity is not a contradiction to business success. Sustainability is no guarantee for better sales but, in addition to an altruistic ethic which often motivates alternative green business, it does offer clear and sober commercial advantages.
Do good and talk about it
If you do good, talk about it. Advertising a sustainable product is setting yourself apart from conventional business. Sustainability represents an increased market value. Even though the sustainable textile and leather goods industries continue to occupy a niche market, the demand for these products has increased measurably in the last few years.
An additional advantage is the sense of security that offering especially a certified sustainable product gives:
for the consumer who knows he is buying a “clean” product, for the retailer who can rely on getting what the label promises for the manufacturer whose business and products are regularly audited.
Sustainability alone is not enough to succeed
It is clear that businesses operating on a sustainable and socially accountable basis must overcome many hurdles on the way to a positive earnings statement, especially the smaller start-ups. The market for sustainable textiles and leather goods continues to have the character of a niche market and the selection of suppliers is very thin. Meeting minimum quantities can be a major challenge for manufacturers and brands. This is especially true for products outside the mainstream or that are not basics.
The surcharge for sustainable manufacturing is significant. The additional costs for decent wages all along the production chain, i.e. for suppliers, upstream suppliers and their suppliers must of needs add up to more. These in comparison increased costs are augmented by the price of certification or the add-on cost to change individual production stages to a sustainable process.
And yet many green enterprises manage not only to exist on the market but also to grow. These producers have a competitive advantage based on their acquired expertise, a dense and stable network, quality, product research and innovation. A green retailer can play the aces of a sophisticated marketing concept, a well-thought out product assortment and client focussed counseling.
Transparency across all the complicated production chains is paramount for all. On the one hand, information is necessary to enable retailers to advise consumers where, how, and by whom the product was produced. On the other hand, all participants along the sustainable supply chain seek to share or explain costs by sharing responsibility for them.
Savings possible through sustainable business
Astute resource management can help companies by achieving reductions in material and energy costs. A positive side-effect can be reduced waste and emissions, thereby enabling a company to achieve its environmental impact goal.
The biggest market advantage is achieved by companies that are certified. IVN advises all start-ups to research certifying costs early on and to include these costs in their business plan. Quality seals such as GOTS or NATURTEXTIL BEST or NATURLEDER offer distinct competitive advantages in company advertising and at the same time they are an instrument of quality management.