By: Bram Pauwels -8-10 min. – last updated 27 September 2015

 

Could it be that the current war in Syria, and the tremendous flow of migrants found its roots in climate change? Experts cite many reasons to explain the current turmoil in the Middle East and indeed, drought caused by climate change is identified as one of the main ones. Even if you are personally not involved in, or affected by the refugee crisis, the reality is that a majority of the society cares deeply about it. The impacts of climate change are felt everywhere and there is a direct correlation between these impacts and the way businesses operate today. What does today’s buyer expect from the way business is conducted and how did this change in the last decade? Valid questions to ask yourself as a business owner today. Transparency in the supply chain, responsible sourcing, efficient manufacturing and socially responsible investing/financing have become minimum expectations of our consumers today.

 

Both consumers and business leaders have a clear role to play in the necessary systemic change. Consumers like all of us have the ultimate power to driver change in business practices through our consumption patterns, while CEOs, VPs and business managers can lead this transformation directly through their influence over their organizations’ business strategies and improve business practices, all while improving their bottom line profits.

Now that we got that cleared, let’s meet the expert and get started with building solutions.

Ajay Varadharajan, founder of social startup ‘Green Insights’, and applicant for the Dutch Startup Visa, kicks off our conversation: “European entrepreneurs are in a unique position to take big risks and directly address a lot of the world’s social and environmental problems. Situated in a central position, and with a social system in place that takes care of its people when they need help the most, Europe, and especially the Netherlands, provides the perfect climate for entrepreneurship to blossom. The reason is the low risk attached to failure, accompanied by low transaction costs, emerging markets like Africa and Asia in close reach, and the high demand for socially focused goods and services. We could say that the ideal time to start a social venture in Europe is now. I would encourage everyone to set out to identify a desperate need that exists today that they are passionate about and solve it. The satisfaction you get out of it is truly immeasurable.”

Ajay cuts rights to the chase. With his expertise in sustainability and circular economy and with several years of international experience in strategy consulting, he is the kind of guy you want to watch closely as his hands craft your business towards a sustainable model. With a specialized dual master’s in Sustainable Systems and Engineering he plans to shake up the current Dutch social entrepreneurial scene. Ajay is not the kind of guy that leans on your desk staring at you with a glaze of boredom in his eyes.
Let’s zoom out for a second. So Ajay is yet another consultant turned into entrepreneur? Where do I find the added value for me and how does his solution add to my current business and operations as usual? Wait, now that we are on the topic, what does sustainability mean for me personally? After all, I already skipped using plastic grocery bags. Isn’t that enough?!

 

“Here is your take-away tip: quantify a Euro value for the following 3 things.”


Consumer sustainability services

In the consumer space, Ajay tackles the challenges that evolve from the slowly shifting sentiment in society towards eco-consciousness, a shift that is currently visible mostly in larger cities. Eavesdropping to the whispering roar of society makes this clear. What better proofs the fact better than the fact than the well covered topic of conversation at your favourite local coffee bars? “Excuse me, is this Fair Trade/ Organic/ Fair Chain/ Eco / GMO-free/ locally produced? I would like to know who or what exactly has been affected by this coffee I just bought.”
But what exactly is the difference between those sustainability claims and labels, and what sustainability means to you? How does ‘sustainability’ compare to with somebody like you who orders this coffee in China, India or the UK? The fact of the matter is that there is widespread confusion in what sustainability means to consumers and what sustainability is advertised as by the brands. In fact, next to price, distrust in brands has been identified by a BCG study as the biggest reason why the Dutch haven’t widely adopted the sustainable consumption lifestyle.

We need more information, transparency, and things to be put in perspective for us on a neutral, standardized ground for us regain trust in the product brands. At the very least, we need some clarity in the many sustainability claims made by brands on their products so we can pick and choose the ones we would like to support.


Top down impact

From a brand’s perspective, here is the clear signal: consumers are positively disposed towards sustainability and prove it through a record increase in consumption of sustainable products. Now how can brands cater to the rising demand in sustainability needs? Most of the CEOs and business executives spotted the emerging shift already and jumped ‘on board’. Just look at the average company’s sustainability reports and you can see the obvious interest in various aspects of sustainability and a desire to achieve self-imposed goals and targets in these categories. But how can the middle management, with bottom line goals to meet, digest the intentions, passion and drive for change from the upper management, to actions and daily business operations? What are the effects on the bottom-line profits?

Here you find 3 suggestions – Ajay’s tested solutions – to tackle these questions, tailor-made for each business and industry, depending on their sustainability maturity levels, as Ajay likes to call them.

 

1. Sustainability, che cosa?!

Your organisation is somewhat familiar with the current market trends towards responsible business conducts. You have heard of sustainability but do not know what it means for your organization. You are on the quest to find out why you should invest in sustainability? What is the business value? What are my next steps?

Ajay: “Consider a materiality assessment to understand what aspects of sustainability are relevant to your organisation. What are some of the hot spots within your industry that require your immediate attention? This gives you a starting point.

 

Build network and strengthen your skills to transition your organization towards Social Innovation & Sustainability – Masterclass Societal Transitions

 

 

2. Okay, I know what it means but why should we do this?

Now that you know what sustainability means for you, you move on to identifying the business case for it. Based on the acquired awareness – to shape your intentions in a business case. After all, ‘people, planet, without profit’ is solely philanthropic right?
Here is your take-away tip: quantify a Euro value for the following 3 things.

  1. The value of risk on your inaction on sustainability – This refers to the direct business risk you incur by not considering sustainability in certain aspects of your business operations – say material sourcing. Ajay explains: “Take for example the effect of the recent price spike in commodities such as cotton on the textile companies, regulations on the chemical companies, or stakeholder action against companies like Coke in India for their water abstraction practices. These have the potential to disrupt business as usual. To take maximum advantage of these situations, it is wise to anticipate such risks and focus on long-term sustainable business alternatives.”
  2. The value of innovation – Markets show many examples of innovation in the face of sustainability as regulations, stakeholder pressure or competition. Companies that looked beyond just compliance have excelled and lead the industry in innovation. “If Tesla had not gone all electric and was another car company that focused on making the most efficient internal combustion engine. They would not have carved the unique niche of innovation and performance for themselves that people are willing to pay for today. The result is that they are seen as the leader of the electrification movement of the automotive industry and are reaping additional benefits from big data, connected vehicles etc. and a loyal and passionate customer base.”
  3. The value of a better brand – “Every brand that adapts sustainability ups their perceived value. As a sustainable brand, you get a strong base of loyal customers as well. All of this translates to euro-value”

Now you know what the business value is of investing in sustainability initiatives. Or you know what the lost opportunity to capture business value is, if you decide not to get on-board.


Get the ball rolling… Report, Benchmark and Improve

Familiar with GRI (Global Reporting) standards and all other key performance indicators and regulators? Consider the next step.

“First, quantify and report your impacts. Now it is time to get the tools and key performance indicators in place. Quantify your greenhouse emissions, water usage, and more. Now, benchmark yourselves with your peers and competitors. Finally, look for low hanging fruits that you can find immediate business value from. Report, benchmark and adopt best practices to stay ahead of your competition. Save time and money, and do it with tools developed for these purposes.

“To all the people who are doing what they don’t like for work – life is way too short. Think of the legacy you leave behind at the end of the day. Take a break from your jobs and try doing what you love. To the entrepreneurs, Dream big, have a grand vision, and give it your best efforts. Do something positive for the society you live in. Still need motivation? – Just keep in mind that with a life in Europe, you are in an infinitely better position to do so than you are in most other parts of the world”.


Bonus: Go from whisper to thunder – Sustainability is deeply ingrained in your business. Now what?

All you Unilevers, Patagonias, and Pumas who perform cutting-edge in sustainability and who lead us into the near future – from the way you source your materials, to design for disassembly, to use fair production techniques – we honestly admire your examples. What’s next? Test out newer concepts in the realm of sustainability – Have you already tried to adapt “true-pricing” strategies and “circular economy” solutions? There is a still a world to win in the latest developments.

 

From consultant to entrepreneur

Ajay | Green Insights | Impact Hub Amsterdam | Social Entrepreneur | #Impactmaker | InnovationWe see how Ajay has already passed several challenges in the setup of his start-up although the peak of his ambition lies in a consumer lifestyle sustainability app, yet unspoken of in this article, which he slowly develops. Although things indeed proceed slower than expected, in the end he aims to quantify lifestyles of consumers in various aspects and provide the user information and transparency on how sustainably they live. Based on this, the app suggests alterations in lifestyle habits that reduce the overall lifestyle impact. The app would be completely free for the user while businesses reduce costs in the process and gain additional revenue as consumers lead better lifestyles. It is a win-win for both business and the people.
Ajay’s Green Insight is backed-up by top mentors and a solid advisory board consisting of Maurits Groen (co-founder and Director WakaWaka), Jan Hein van Joolen (Sustainability investor and former financial executive). Joost Brinkman (Senior Manager – Sustainability Services, Accenture) and Jan Ludolf Heeres (Senior Manager – Sustainability and Responsible Governance, PwC). All are in position to support Green Insights towards the next phase: impact investment to produce a prototype of the app. Yes, investment is still a hurdle often stumbled on by Dutch startups. How do we evolve from our conservative, risk-averse attitude? “I am sure that some of the Dutch startups, provided with a small amount of investment in the early stages, will become the next unicorns. But for now the pool of money is really small and few are willing to take the risks on these start-ups.”


Startup visa

Ajay applies for a startup visa via the new regulations initiated by Dutch state government, guided by facilitators Impact Hub Amsterdam and the Amsterdam Expatcenter. “The Startup Visa is greatly helpful. It allows people like me, already residing in the Netherlands, start a business and try to make it big here. The process makes it far easier to begin a business. With Impact Hub Amsterdam as my facilitator, I tap into a globally-rooted local network, a key success factor for all startups.”

Ajay signs off with this advice to entrepreneurs:

“To all the people who are doing what they don’t like for work – life is way too short. Think of the legacy you leave behind at the end of the day. Take a break from your jobs and try doing what you love. To the entrepreneurs, Dream big, have a grand vision, and give it your best efforts. Do something positive for the society you live in. Still need motivation? – Just keep in mind that with a life in Europe, you are in an infinitely better position to do so than you are in most other parts of the world”.

 


To learn more, go to www.greeninsights.org or get in touch with Ajay, drop him a line at greeninsightsconsulting@gmail.com.

To learn more about Impact Hub, visit amsterdam.impacthub.net. Join a well-developed entrepreneurial eco-system of impact entrepreneurs, organizations and frontrunners.