We all agree that the current environmental problems were created as a result of a disconnect between economic concerns, environmental consciousness and concern for societal well-being. Therefore a system that links the three from the word go is to be applauded today.
This is the basis of the eco-preneurship idea, which seeks to support and promote businesses that are designed with environmental consciousness. Although the idea of social entrepreneurship is nothing new, there is no doubt that traditional business models that are driven by pure concern for profits has led to little concern for our environment in the business world today. Probably, the greatest challenge today is convincing as many entrepreneurs that they can make any profits by being environmental conscious.
A private financier in South Africa is rising to that challenge after launching a R300 million Green Fund (USD 21.5 million) to finance businesses and projects that aim at creating a positive impact on the environment. While financiers (mostly public funding) of such projects are many, it is an area not popular with private financiers like Business Partners Limited, the company behind the initiative. The Managing Director of Business Partners - Nazeem Martin, said the following during the launch of the Green Fund initiative in Cape Town:
"A great deal of innovation is required from private sector financiers to seize the market opportunity created by government's green economy plans and policy frameworks" .
More importantly, Ecopreneurship can help to change the traditional notion that environmental problems are to be dealt with by governments, NGOs and international donors. It seeks to promote environmentally-sensitive products and services while at the same time solving economic challenges. Africa is not the largest emitter of carbon emissions, but it is the largest victim, with estimates showing that it is already losing 1.4% of GDP and 3% of GDP by 2030 and countries such as Kenya are losing up to Sh14bn yearly (USD 137 million) due to flooding and periodic drought.
Business Partners Limited, a specialist risk finance company is helping SMEs in South Africa by: identifying the relevant businesses, providing access to industry-specific specialists, start-up loans, expansion capital to ongoing environmentally conscious businesses, property finance and support. It is targeting to fund a range of SMEs businesses including waste recycling and management, green building, natural resource conservation projects, healthier foods, ecosystem protection, renewable energy generation and emission saving products. This will align with the recent policy changes by the South African government to support a green economy according to Martin, who added that they want to support businesses that are "making a difference." This is in addition to its usual practice of funding general entrepreneurship.
The company said it is time to provide more than financial assistance to businesses. It will provide the green enterprises with a database of mentor experts in business and the green space according to Martin. South Africa, which is the 12th largest carbon emitter in the world and which accounts for half of emissions in Africa, is aiming to reduce its emissions by 34% by 2020. The country has identified the green economy as one of the six sectors that will help generate five million jobs by 2020.
Developing worlds have also relied heavily on international aid models to fund most of their environmental-sensitive initiatives, and with increasing concerns for their long-term sustainability and mismanagement, the focus now shifts to which innovative funding methods should be pursued, if not ending this dependency. Ecopreneurship is good news for governments in the developing worlds too because it solves the problem in both ways: it allows supporting of environmental-conscious businesses that are economically independent and at the same time lifts their dependency on external funding. Not only do these businesses create jobs but also generate more revenue.
Image Credit: hatchnola.com
Ecopreneurship presents an opportunity to advance environmental cautious ideologies to the business world in order to contribute to the larger goal of reducing negative environmental impacts. More importantly, support by private financiers is a great shift since the environmental problem has traditionally been viewed as a problem to be solved by NGOs and governments. It is also recognized that while a lot of climate funding is presently being channelled to projects that help the world to adapt to climate changes, there is need for increasing innovative approaches such as funding mitigation measures.