How small business can slow global warming

No entrepreneurial firm can tackle huge environmental issues singlehandedly, but there is strength in numbers, says a green-business advocate.

By Byron Kennard, FSB contributor

Consider this: if all 19,700 members of the National Automobile Dealers Association (NADA) reduced their energy consumption by just 10 percent, they would save approximately $193 million in energy costs and eliminate more than one million tons of greenhouse gas emissions each year.

This is now underway. Early this year, nearly 500 auto dealers made a pledge to cut back as part of the NADA Energy Stewardship Initiative (www.nada.org/energystar), launched in collaboration with EPA's Energy Star Small Business program. NADA's initiative is a good example of "silver buckshot." No small business can combat global warming effectively on its own, but by aiming at the same target simultaneously, groups of entrepreneurial ventures can have significant impact.

The "silver buckshot" strategy has emerged from the growing recognition that a cap-and-trade program to reduce carbon emissions, important as that would be, does not constitute a silver bullet that will eliminate the threat. "Cap and Trade and More," an article written by Michael Northrop and David Sassoon in the June 2007 issue of Environmental Finance, notes that current efforts won't reach 50% of emissions. Even if stronger limits on emissions were imposed today, the authors estimate that it could take up to a dozen years for the federal government to implement them.

The latest science suggests we may not have that much time left to avoid a tipping point in climate change. We have no choice, frankly, but to employ alternatives. Northrop and Sassoon call for strategies that produce incremental solutions, aggregate many small gains, and secure immediate greenhouse gas emission reductions.

Small business is particularly well equipped to answer that call. America's 26 million small businesses constitute half of our economy. They consume approximately half of all energy used for commercial and industrial purposes. Something like 30% of this energy is wasted through inefficiencies that should and could be reduced.

When I look at the world of small business, I see opportunities to save energy in every nook and cranny. The model used by NADA's Energy Stewardship Initiative applies to many other small business-dominated associations, of which nationally there are more than 150. The National Small Business Association (NSBA), for example, recently launched a similar initiative. NSBA, the nation's oldest small business advocacy organization, was founded in 1937. Today, it reaches more than 150,000 firms. NSBA is challenging entrepreneurs across the country to reduce energy use by 10 percent or more through increased efficiency and is providing the tools and information needed to make it easy through its website. (www.nsba.biz/energystarchallenge)

NSBA's initiative is also undertaken in collaboration with the Energy Star Small Business program. Every thrift-minded small business owner in the country can profit by visiting the program's website: www.energystar.gov/smallbiz. This model for energy efficiency will really kick in when it is adopted by highly energy-intensive small businesses, such as those represented by the National Restaurant Association (380,000 members), the National Grocers Association (50,000 independent stores), and the National Association of Convenience Stores (140,655 stores). While helping the country reduce energy consumption and greenhouse gas emissions, increased energy efficiency would save small businesses billions of dollars each year.

There's evidence too that small business owners are increasingly responsive to the idea of making their workplaces more efficient. They've good reason to do so. According to a new Small Business Research Board study, energy/fuel costs are now one of the three most critical concerns of small businesses. (http://www.pr.com/press-release/44941) Another financial benefit is that the efficient new equipment and installation labor to achieve these energy savings will often be provided by local small businesses.

Here's the icing on the cake. Small business energy efficiency doesn't require years of expensive R&D. All the technology needed is available now. And a fast turnaround is possible because energy efficiency upgrades for small businesses involve doing the same simple thing over and over again in lots and lots of places. Entrepreneurs can make a big dent in energy demand, for instance, just by using window film to reduce summer heat, and by installing improved lighting, better thermostats and occupancy sensors in bathrooms, offices and storerooms. In the small business world, little things mean a lot. It turns out now that, globally, little things mean a lot too.

Byron Kennard is founder and executive director of the Center for Small Business and the Environment (geocities.com/aboutcsbe/index.html). Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.