Sustainable business models

sustainable economy

In the valley of sustainability does not always shine the sun. Those who proudly adorn themselves with eco and organic sweat behind the scenes. Sustainable business often puts entrepreneurs in front of closed doors, biting them on granite and even mocking them. But once the engine is in motion, the chance to emerge as a hero is even greater.

Sustainable economy 

The United Nations Global Compact's CEO sustainability study asked 1.000 CEOs in 103 countries about the progress of the global economy in terms of sustainability: 78 percent see sustainability as a way to grow and become more innovative, and 79 percent believe they can sustainable business in the future will have a competitive advantage in their industry. 93 percent of respondents also consider environmental issues, social issues and responsible corporate governance to be important to the business future of their companies. However, the current economic situation and conflicting priorities prevent CEOs from anchoring sustainability in their businesses

Pioneer spirit is just no picnic. In the small meeting room Michaela Trenz nibbles dried pineapple pieces and reviews the past two years. 2014 has discovered the convinced vegan in this country a gap in the market and immediately set to work. "Manufacturers of natural cosmetics could never tell me as a consumer, whether their products are completely free of animal substances," recalls the 30-year-old. So Trenz has begun to research ingredients in cosmetics products to live their veganism uncompromisingly. The results have astounded her. For example, she found out that creams often contain animal lanolin (wool fat) from critical sources in the Far East. "There is no legally defined definition of natural cosmetics, many products even contain carcinogenic substances," says Trenz. Then she founded Vegalinda, an online mail order business for vegan natural cosmetics. Their unique selling point is the strict criteria as to when products are allowed in their assortment. "I give my customers the certainty that all products are vegan, animal-free and free from harmful ingredients," explains Trenz. Not an easy task for cosmetics, because animal testing is mandatory for the booming Chinese market. Cosmetics for the masses will continue to be tested on animals.
Trenz starts with small manufacturers who have no ties to large corporations. She sends questionnaires to potential suppliers in order to properly scrutinize ingredients and raw material suppliers. "Many do not answer at all, some just barely", reports Trenz from her first steps as an entrepreneur. However, she has now developed a sense of where her request might meet with affection and who has nothing to hide.
Most of them are sourced from manufacturers in Austria and Germany. The tedious research work has paid off. Today Trenz has around 200 various products of 30 manufacturers in the range, mainly make-up and skin care.

Compromises must be

Trenz would like to be much more sustainable, but in practice sometimes she has to turn a blind eye. Keep an eye on the subject of palm oil, without which many a product can not manage. "The oil must come from a good source, where fair working conditions prevail", she sets herself as a pain threshold. The second eye pushes it towards plastic packaging orgs. All the more she is happy about make-up in the carton boxing.
The early stage of the company and the still small shipping volume make purchasing difficult. Minimum order quantities from suppliers are not in line with customer demand. Meaning: storage products spoil due to their short shelf life and lead to lost sales.

The "Green Spinner" from the Waldviertel

Sonnentor boss Johannes Gutmann, who today has 250 employees and sells herbal mixtures, teas and coffee from the location in the Waldviertel to Germany, thinks in larger dimensions. But he, too, has started small, as he remembers: "Nearly 30 years ago, I was described as a green spinner in the area."
At that time, organic was still something exotic and Gutmann persistently tried to persuade herbal farmers in the area to switch to organic farming. Because he needed organic ingredients for his herbal products. He bit his teeth and finally got a beating. "I was the scapegoat for every mistake that the farmer himself was guilty of. After that, I immediately stopped missioning, "says Gutmann. Little by little, farms have jumped on the organic train and the business has attracted. Going for non-organic herbs was never an option for Gutmann, even if they only cost half of their purchases.
Gutmann has an unconventional view of corporate governance. He is not primarily profit-oriented, but "common good-economic". What that means? "Added value is appreciation towards employees", so his striking answer. But behind it is cash. Specifically, it is about 200.000 Euro, the Gutmann cost the common good annually. Half of this goes into the daily meals of employees in the company canteen. More 50.000 in the public interest report. The rest goes into other social benefits for the employees.
And how can a company afford that? "Since, with one small exception, nobody has a stake in Sonnentor, I don't have to pay out any returns," says Gutmann. He leaves the profit in the company, invests little in machines for automation but rather in more employees. “With the economy for the common good, I make more profit in the long term, because I will get back my investments in people in the future,” Gutmann sums up. A first indicator is the low employee turnover. It is just under seven percent, while the Austrian average in retail is 13 percent. Not using palm oil in Sonnentor products is also associated with additional costs. Sonnentor purchases palm oil-free cookies and pays 30 cents more per pack.

"We do not see production in Europe as a disadvantage, even though it gives us lower margins and less profit."
Bernadette Emsenhuber, shoe manufacturer Think

Sündteures quality label

Leather for shoe production is usually tanned with toxic chrome salts. The fact that residues are harmful to human skin is obvious. The Upper Austrian shoe manufacturer Think runs the hare differently. This is where "healthy shoes" are understood to mean using low-emission materials in production. In practice this means: Herbal remedies replace the toxic chromium salts in the tanning process. However, this does not work for all types of leather, so it is mainly limited to the inner leather, which comes into direct contact with the skin.
The exception and at the same time figurehead of the company Think is the shoe model "Chilli-Schnürer", which is completely made of chrome-tanned leather. For this, they applied for the Austrian Ecolabel and got it as the first shoe manufacturer. But until there it was a gauntlet. Due to the strict testing by the Ministry of the Environment you had to readjust many times to box the last bit of pollutant out of the materials. "For example, the level of pollutants in the burn test was too high," says Bernadette Emsenhuber, Head of E-Commerce and Sustainability at Think.
Meanwhile, the company has received the eco-label for five other models, which also involved considerable effort. "It took half a year for each model," recalls Emsenhuber. Profitability looks different, because the certification process, including staff costs and testing procedures, has an impact of around 10.000 Euro per model. Since the tests take so long, the shoe is now no longer in the regular collection, but Think produces in small quantities. An extra effort in favor of health and the environment. The fact that Think produces exclusively in Europe costs money. In a sports shoe made in Asia, labor costs account for about twelve percent of the manufacturing costs; at Think, they are around 40 percent. "But we do not see production in Europe as a disadvantage, even though we have lower margins and less profit," says Emsenhuber. The advantages outweigh the uncomplicated Nachproduktion in small quantities and short transport routes.

Harvest inhibition by bio

The immediate proximity to the Neusiedlersee-Seewinkel National Park was the reason for the Esterhazy farms to switch 2002 to organic agriculture and thus to protect sensitive areas. We have eliminated weed killers and chemical fertilizers from the 1.600 hectares of self-managed land. A jump into the cold water, because the flourishing agriculture was facing new challenges. Instead of chemical sprays, the farm now relies on crop rotation. Different crops, such as wheat, sunflowers and corn regularly change the fields so that the soil is not leached out. However, there are seven years each two years, on which plants are grown for fertilization and there is no yield. "In contrast to conventional agriculture, we have up to three quarters less yield," says Matthias Grün, Managing Director of Esterhazy. Taking winter wheat as an example, this means three tonnes of yield per hectare in organic mode, versus six to eleven tonnes using chemicals. Green therefore turned over the business vigorously. Instead of selling only cereals and pumpkins, Esterhazy now sells bread and seed oil. The refining increases the added value and compensates for lower crop yields.
Less headache prepares the renouncement of spraying. "We remove weeds mechanically by tillage," explains Grün. Although this leads to more labor costs, but compared to the expensive weedkillers, the bottom line is the same. But there is a Damocles sword hanging over each square. "Pest infesting a culture, we can only watch and hope for a miracle," sighs Green. Esterhazy has imposed on itself, no sprays - even for organic agriculture recognized - use. The exception is the viticulture, "there is not enough on large areas."
Whether organic herbs, vegan cosmetics or agriculture without chemicals, the actors always have to bear a double burden. On the one hand, they must maintain the profitability of a holding, on the other, they act for the benefit of society and the environment.

Photo / Video: Shutterstock.

Written by Stefan Tesch


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