The Benefits of Doing “Green” Entrepreneurial Business

Oleh: Yuniarty

Dosen Tetap Business Management, Binus Online Learning

New topics in the broader field of entrepreneurship are becoming popular, namely sustainable entrepreneurship (Hockerts et al., 2018). Sustainable entrepreneurship is a new research field, a special form of social or environmental entrepreneurship (Shepherd & Patzelt, 2011). Sustainable entrepreneurship is “the process of identifying, evaluating and seizing entrepreneurial opportunities that minimize the impact of a business on the natural environment and create benefits for society as a whole and for local communities” (Gast et al., 2017). Unlike conventional entrepreneurship, which focuses mostly on maximizing profit, sustainable entrepreneurship aims to build a business that balances the bottom line of three economic, social and environmental aspects. (Belz & Binder, 2017; Cohen & Winn, 2007; Dean & McMullen, 2007; Gast et al., 2017; Hockerts et al., 2018; Jiang et al., 2018; Patzelt & Shepherd, 2011; Schaltegger & Wagner, 2011).

In this opportunity, let us explore further, what is green entrepreneurship and what are the benefits of running a green business? The existing literature has shown that the relationship between entrepreneurship, the environment, and sustainable development has been researched with various schools of thought and expressed in different terms such as “ecological entrepreneurship” (Gast et al., 2017; Linnanen, 2014; Schaper, 2002); “environmental entrepreneurship” (Corbett & Montgomery, 2017; Dean & McMullen, 2007), “green entrepreneurship” (Demirel et al., 2019; Pihie et al., 2013). Green entrepreneurship as part of sustainable entrepreneurship is a well-established company adopting environmental management practices or production processes that are cleaner and new business start-ups based on natural resources and ecology (such as solar energy companies and ecotourism) (Nikolaou et al., 2011). Environmental entrepreneurship is defined as the process of discovering, evaluating and exploiting the economic opportunities that exist in environmentally relevant market failures (Dean & McMullen, 2007).

Small Medium Enterprise in Indonesia is one of the contributors to environmental damage. Negative impacts caused by SMEs occur starting from efforts to obtain raw materials, production processes, and waste produced either during production or afterwards (BI, 2013). To achieve sustainable development, business actors must not only operate based on the economic aspect but must also consider the social and environmental impacts both in the short and long term. Green growth will require new technologies, organizations and processes, effective government policies to protect the environment, and consistent engagement of SMEs.

The benefits of green entrepreneurship include the following:

Green marketing awareness: Improve brand image and increase competitive advantage. A sustainable marketing strategy remains relevant for achieving community engagement and brand engagement because the product promotes brand trust among environmentally conscious customers. Green marketing significantly influences purchasing behaviour (Amoako et al., 2020). Tailoring your brand to match sustainability ideals is a smart way to attract eco-conscious consumers. This new economy of “green” consumers creates endless opportunities for innovation and authenticity. Studies show that businesses that pay attention to the environment gain higher consumer attractiveness and lasting loyalty.

Easy implementation of environmental legislation. The EU’s Renewable Energy Directive to phase out the use of palm oil for biofuels by 2030 has put pressure on Indonesian and Malaysian palm oil producers. The EU is open to reconsidering the policy, but a strong reduction in deforestation is the point (Shahab, 2019). If the company has adopted a green business concept, it will increase readiness for future laws and fees.

Attainment of green investments and acquisition of loans with better terms. Instead of serving as a barrier to green business, as it was in the past, finance is now the main driver of green business, with green financing becoming more common. Progress in the government and financial sectors reflects progress on the global stage. For example, international treaties to protect and manage the common interests of the global environment can drive changes in national-level policies (Asian Development Bank, 2017).

New trade opportunities. Companies can differentiate products and then gain access to new markets (Asian Development Bank, 2017). Companies can integrate greenness into their business in different capacities and degrees. Some use greener inputs or sell greener products and services, while others change production and consumption patterns across the value chain.

Reduction of operational costs. Many companies have experienced greater operational efficiencies after implementing more sustainable business practices. It makes sense when you consider that better conservation and use of resources results in a more streamlined operation and decreased costs.

A healthier work environment has an impact on employee morale. Going green does not just generate positive feelings from customers. Employees feel safer working for an environmentally friendly business. Employees feel that their health is cared for and that they are not just a disposable commodity. Engaging workers in company-wide green initiatives will boost morale. It is also a good way to reduce employee turnover, as employees do not want to leave a place that makes them feel part of a caring work community.

There is no doubt that the main benefit of going green is that it will reduce its impact on the planet. Especially young entrepreneurs who pay more attention to the way their business affects the environment. Therefore, the business reputation will increase significantly which can mean a significant increase in sales. Consumers are becoming more aware and educated about the environment and the impact human activities have on it. Efforts to turn a business into a greener business will result in efficient green marketing that will increase profits. In addition, going green will not only have a positive impact on customers, but also employees. Employees will feel safer working for an environmentally friendly business because there will be a healthier work environment. It will also make them feel part of a caring community which will increase employee loyalty to the business.


Amoako, G. K., Dzogbenuku, R. K., Doe, J., & Adjaison, G. K. (2020). Green marketing and the SDGs: emerging market perspective. Marketing Intelligence and Planning.

Asian Development Bank. (2017). Making Green Business Work. Development Asia.

Belz, F. M., & Binder, J. K. (2017). Sustainable Entrepreneurship: A Convergent Process Model. Business Strategy and the Environment, 26(1), 1–17.

BI. (2013). Kajian Kesiapan UMKM Ramah Lingkungan dalam Mendapatkan Akses Pembiayaan – Bank Sentral Republik Indonesia. Bank Indonesia.

Cohen, B., & Winn, M. I. (2007). Market imperfections, opportunity and sustainable entrepreneurship. Journal of Business Venturing, 22(1), 29–49.

Corbett, J., & Montgomery, A. W. (2017). Environmental Entrepreneurship and Interorganizational Arrangements: A Model of Social-benefit Market Creation. Strategic Entrepreneurship Journal, 11(4), 422–440.

Dean, T. J., & McMullen, J. S. (2007). Toward a theory of sustainable entrepreneurship: Reducing environmental degradation through entrepreneurial action. Journal of Business Venturing, 22(1), 50–76.

Demirel, P., Li, Q. C., Rentocchini, F., & Tamvada, J. P. (2019). Born to be green: new insights into the economics and management of green entrepreneurship. Small Business Economics, 52(4), 759–771.

Gast, J., Gundolf, K., & Cesinger, B. (2017). Doing business in a green way: A systematic review of the ecological sustainability entrepreneurship literature and future research directions. Journal of Cleaner Production, 147, 44–56.

Hockerts, K., Muñoz, P., Janssen, F., & Nicolopoulou, K. (2018). Advancing sustainable entrepreneurship through substantive research. International Journal of Entrepreneurial Behaviour and Research, 24(2), 322–332.

Jiang, W., Chai, H., Shao, J., & Feng, T. (2018). Green entrepreneurial orientation for enhancing firm performance: A dynamic capability perspective. Journal of Cleaner Production, 198, 1311–1323.

Linnanen, L. (2014). An Insider’s Experiences with Environmental Entrepreneurship. Greener Management International, 2002(38), 71–80.

Nikolaou, E. I., Ierapetritis, D., & Tsagarakis, K. P. (2011). An evaluation of the prospects of green entrepreneurship development using a SWOT analysis. International Journal of Sustainable Development and World Ecology, 18(1), 1–16.

Patzelt, H., & Shepherd, D. A. (2011). Recognizing Opportunities for Sustainable Development. Entrepreneurship Theory and Practice, 35(4), 631–652.

Pihie, Z. A. L., Bagheri, A., & Sani, Z. H. A. (2013). Knowledge of Cognition and Entrepreneurial Intentions: Implications for Learning Entrepreneurship in Public and Private Universities. Procedia – Social and Behavioral Sciences, 97(8), 174–181.

Schaltegger, S., & Wagner, M. (2011). Sustainable entrepreneurship and sustainability innovation: Categories and interactions. Business Strategy and the Environment, 20(4), 222–237.

Schaper, M. (2002). The challenge of environmental responsibility and sustainable development: Implications for SME and entrepreneurship academics. In Radical change in the world – will SMEs soar or crash?; Umbruch der Welt – KMU vor Hohenflug oder Absturz? (Issue March, pp. 525–534). Course Materials/challenge of environmental responsibility and sustainable developement Implications for SME and entrepreneuship academics 2002.pdf

Shahab, N. (2019). Sustainability can be an advantage for Indonesia – CIFOR Forests News.

Shepherd, D. A., & Patzelt, H. (2011). The New Field of Sustainable Entrepreneurship: Studying Entrepreneurial Action Linking “What is to be Sustained” with “What is to be Developed.” Entrepreneurship Theory and Practice, 35(1), 137–163.