Meet the oddball entrepreneurs who invented green businesses
The following is an excerpt, published with permission, from "Profits and Sustainability: A History of Green Entrepreneurship" by Geoffrey Jones (Oxford University Press, 2017). This article originally appeared at Harvard Business School's Working Knowledge blog.
In terms of intent, two distinct types of entrepreneurs became involved in green businesses: green entrepreneurs and conventional entrepreneurs. This distinction does not imply a value judgment, still less a judgment on outcomes. Nor does it imply that either category was homogeneous. In fact, both the green and conventional entrepreneurs were quite varied in their characteristics and motivations.
Both personal and institutional explanations shaped the green entrepreneurs who developed many industries discussed in this book. Among the former, personal life events were important factors in their motivation. Health concerns, often experienced very personally by being ill or seeing family ill, were very important as a motivation, especially for the entrepreneurs in organic food.
John Harvey Kellogg was a doctor. Benedict Lust contracted tuberculosis on his ﬁrst visit to the United States. Rudolf Steiner did his foundational work with Dr. Ita Wegman on the treatment of illness by natural methods. Jerome Rodale was very sick as a child, while Mo Siegel’s mother died when he was 2. Young Ian McHarg’s illness at Harvard and his difﬁcult recovery in the 1950s revealed to him the power of nature to heal. It was not only entrepreneurs for whom sickness seems to have been a formative inﬂuence. Rachel Carson emphasized the impact of DDT on human health, and she was terminally ill with cancer as she wrote "Silent Spring."
Early encounters with nature proved important, too. John Elkington recalled the formative inﬂuence of a night-time encounter with baby eels. Joan Bavaria grew up in rural Massachusetts, loved nature and animals, and was an avid gardener. Elper Wood’s walk along the Appalachian Trail motivated her interest in nature.
In a signiﬁcant number of cases, religion provided an important inﬂuence in the motivation of green entrepreneurs. Religious belief was important in generating both a sense of responsibility for the planet and encouraging engagement in ventures which were not likely to yield enormous proﬁts in the short run. The long list of Christians, of many denominations, among the entrepreneurs included John Harvey Kellogg, Wilhelm Barkhoff, Thomas Harttung, Claus Hipp, Hans Müller and Mizue Tsukushi. There were also Muslims such as Ibrahim Abouleish, Jews such as Arnold Goldman and Buddhists such as Kazuo Inamori. A number of other esoteric philosophies, as in the case of Mo Siegel and his "Urantia Book," were inﬂuential in individual cases.
Resilience and strength
More broadly, anthroposophy became a surprisingly resilient inspiration for green entrepreneurship. This was most evident in organic agriculture, food retailing and natural medicine, where biodynamic concepts exercised a worldwide inﬂuence. Followers supplied data to help Rachel Carson write "Silent Spring," made deserts bloom in Egypt, delivered food baskets to households in Copenhagen and much more. However, the impact of Steiner was uniquely broad, inspiring over the decades architects, bankers and educators. Biodynamists pioneered the idea of certiﬁcation and its rigorous auditing. They founded a distinct set of ﬁrms, among them Sekem, Triodis and Weleda, which proved durable manifestations of alternative means of conducting business.
A distinct subset of green entrepreneurs were engineers, or even tinkerers, who believed in the potential of technical innovation either to achieve goals they had set for religious or social reasons or simply because they were fascinated or obsessed by machines. They were prominent among the early wind and solar entrepreneurs, such as Paul la Cour and Frank Shuman onwards.
Their later incarnations included Elliot Berman and Ishaq Shahryar, who perceived solar energy as a way to tackle poverty in the developing world. Recycling and composting were another category where ﬁgures such as Raoul Heinrich and Annie Francé, Kurt Gerson, Kai Petersen and Arthur Schurig were among those infuriated by waste and who sought to capture greater value from it through machines.
Both geographical and temporal context also mattered in shaping entrepreneurial consciousness. Although the importance of individual agency has been emphasized here, this does not mean that entrepreneurs should be seen as lone heroes acting in a vacuum. They perceived opportunities within distinct institutional and geographical contexts.
Environmental commitments and green entrepreneurship arose from concerns about the impact of industrialization on the health of people and the planet. It was not surprising, as a result, that until recently green entrepreneurship was concentrated in the industrialized regions of northwest Europe and the United States. It was here that the environmental problems caused by early urbanization and pollution ﬁrst arose, and where chemical fertilizers were employed to feed urban populations. This was where consumers lived who had sufﬁcient income to be able to think beyond how to survive the next day.
Germany and the United States appear particularly well-represented in the history of green entrepreneurship told in this book, but this may be primarily because it was slightly easier to grow businesses in those countries. Certainly, we have seen signiﬁcant entrepreneurial stories from elsewhere, including Britain, Denmark and France in Europe, and Egypt and Japan beyond the West. From the 1980s onward, values-driven green entrepreneurs arose far more widely around the world than in the past, as the environmental costs of economic growth and prosperity became evident, as they had earlier in the West. They included entrepreneurs in beauty in Brazil, eco-tourism in Costa Rica, ecological architecture in Malaysia and renewable energy in China.
A downturn and a breakthrough
Chronology mattered also as a formative inﬂuence on green entrepreneurship. The 1930s and the years following the end of World War II were not an auspicious moment for green businesses. They remained wholly at the margins of societies. The countercultural and social movements seen in the 1960s were a different matter. Many new businesses emerged out of these settings, even if the businesses initially remained small.
However, the relationship between engagement in social movements and green business was not always straightforward. A number of the inﬂuential ﬁgures in the emergence of Costa Rican ecotourism, for example, had countercultural and environmentalist backgrounds in California. Insofar as the pioneering Danish wind start-ups of the 1970s were inﬂuenced by social movements in Denmark, it was in California that they achieved scale.
The intention of the conventional entrepreneurs who were pre-eminent in early natural tourism, as well as waste collection and disposal, was more straightforward than that of the green entrepreneurs in that making proﬁts and reducing environmental impact were broadly aligned. This was the case for the owners and managers of railroad companies and hotels who opened up the western United States for nature tourism in the 19th century, although the desire for proﬁtability did not rule out some explicit conservation motives. Indeed, it is evident that individuals sometimes traveled along a spectrum from conventional to greener. This was true of foreign hunters in East Africa, such as Frederick Selous and Edward North Buxton, who transitioned from killing animals to photographing them.
The growth of corporate environmentalism after 1980 greatly expanded the role of conventional ﬁrms in sustainability far beyond waste and tourism. Large global corporations issued sustainability reports. Chief executives assumed the mantle of visionary. The context had again changed with the rise in the priority of environmental concerns in societies and their governments, resulting in both the growth in the number of green consumers and the advent of government policies to support greener businesses as well as to regulate bad practices.
NGOs now both scrutinized large corporations and sought alliances with them. The broadening of the concept of sustainability beginning with the Brundtland Commission in 1987 was important in shaping this new context, as it made it more plausible that large corporations could be seen as environmentally friendly. The growth of certiﬁcation and other schemes provided metrics which enabled corporations to demonstrate their environmental credentials ... it was now proﬁtable to be seen as sustainable.