Many people associate climate change with increasing costs and diminishing profits, but what if we shift our perspective? Climate change and the transition to a green economy present vast opportunities for innovation and growth. This is where climate entrepreneurship comes into play, offering significant potential for both socio-environmental impact
and financial profit.
Recently, I had the privilege of speaking at the Climate Enterprise School hosted by Tshimologong in collaboration with the University of Edinburgh and Wits University and funded by the Mastercard Foundation. I was inspired by the level of innovation and passion displayed by both panellists and attendees. The enthusiasm to create businesses with sustainable profits earned from making a positive impact motivated me to share some insights with you.
Firstly, tackling socio-environmental risks and challenges can serve as a competitive advantage that drives innovation, positive impact, and economic value creation. Engaging with existing climate entrepreneurs can help to unlock these advantages by providing lessons learned from past experiences, allowing you to capitalise on the proverbial ‘school fees’ already paid. Additionally, they may also become important mentors who can introduce you to trusted partners.
Secondly, it’s crucial to challenge conventional wisdom in every aspect of your business idea. Some speakers at the Climate Enterprise School emphasised that there’s no such thing as ‘waste’, only raw materials waiting to be transformed into new products and services. Others highlighted the importance of rethinking your customer base. For instance, your customer might be a corporate entity seeking to improve the lives of hungry children, effectively positioning the children as beneficiaries while the corporate entity remains your client. Sometimes you may need to empower people so that they can then become your customers.
Thirdly, in the pursuit of entrepreneurship, it may be tempting to accept all opportunities that come along, especially in the early stages of your business’s development. But keep in mind that it’s essential to first clarify your goals and vision so that you can let these guide your decision-making. This helps to ensure that opportunities that are accepted are aligned with your vision and long-term business strategy. This balancing act is an important one – some opportunities may provide a business with short-term gains but distract from its ‘True North’ in the long run, negatively impacting its success.
Fourthly, when starting out, try to focus on ideas that can be scaled into large businesses. Ventures that, for example, are only feasible during limited crises, may be difficult to turn into strong businesses. Ideas that can grow over time are more likely to attract the attention of investors and make a positive impact on society and the environment.
Finally, consider the role of technology in all aspects of your business − inputs, processes, and outputs. Reflect on how technology, including AI, can enhance each component specifically. In addition, use technology to record and measure the impact of your socio-environmentally-focused business. Demonstrating your impact can be invaluable when seeking additional capital to expand your operations.
It’s a mindset
What exactly is climate entrepreneurship? It refers to profit-oriented businesses that address climate change while promoting social and environmental sustainability. In essence, it’s a mindset where entrepreneurs view the challenges posed by climate change and the shift toward a greener economy as fertile grounds for new innovative business ventures. Importantly, these entrepreneurs are focused on establishing businesses − not non-profit organisations.
Africa boasts a rich tapestry of culture and heritage characterised by a legacy of sustainable living. By harnessing this wealth of indigenous knowledge alongside contemporary solutions and technologies, you can co-create goods and services tailored to the African context. This approach not only respects indigenous rights but also promotes knowledge sharing, empowering all citizens to become responsible stewards of sustainability.
*AI was used to enhance the readability and language of this piece.
Author
Wayne van Zijl CA(SA)
Associate Professor at School of Accountancy WITS
