Study shows green business practices lead to higher sales

By Erin Roman

Editorial Intern- Phoenix Business Journal
Reprinted with permission of the Phoenix Business Journal

Businesses that report having a higher percentage of green business practices are also seeing higher sales, and much of that stemmed from the Great Recession, according to a study released this month by Green America, EcoVentures International and the Association for Enterprise Opportunity.

A survey of 1,305 small businesses nationwide conducted last summer found that those companies that labeled “deep green” and which took on the most green practices had stronger sales performances than the group of “light green” companies that took on few green initiatives during the recession.

The more environmentally friendly companies made up 27 percent of the survey while the less green companies made up 38 percent. A third group, known as “medium green” for undertaking some green initiatives, made up the other 35 percent of the study.

Michael Grossman, chairman of the Green Chamber: Greater Phoenix, said the green trend in Phoenix isn’t as big of an increase as what is reflected by the survey.

“The reality has been that the green economy in Arizona has shown a more steady trajectory, albeit moving in the right direction,” he said.

The chamber launched in 2008 at the height of the recession and has seen membership ebb before more businesses started embracing green.

“There was an initial burst of enthusiasm, followed by about one-third of our members going out of business,” he said. “Since that low point in late 2009, early 2010, we have largely mirrored the economy with a steady enrollment of 120 to 140 members, depending on the month.”

George Basile, senior sustainability scientist at Arizona State University’s Global Institute of Sustainability, said the steady increase in green chamber membership proves that the green economy is on the rise.

“Businesses are finding that consumers want businesses that are about building a better future,” he said. “Businesses that have strong sustainability plans tend to do better.”

Owners of green businesses are aware of the resources they are using, invest in resources they rely on and place importance on their local environment and community. For example, many small restaurant businesses work with local growers to support environmentally friendly farming, while also boosting the local economy, Basile said.

According to the survey results, the organic food market has increased by 238 percent in the past 10 years, whereas the non-organic food market has expanded by only 33 percent.
In the same period, the green building market has increased by 1,700 percent, while the conventional building market has contracted by 17 percent.

Grossman said Meritage Homes in Phoenix, which entered the market as one of the first home builders focused on energy efficiency and solar, has helped transform that market and show how viable going green is to new housing.

“Their homes are consistently above the market value regardless if the market has been up or down,” he said.

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