Helping Start-ups Grow Green by Regional Sustainability Initiative

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Pitch

Before they were SMEs they were ambitious start-ups. We will develop the resources to help start-ups grow into a low carbon SME

Description

Summary

Before SME’s are independent companies they are start-ups that are more focused on keeping the lights on than turning them off at night. They are often located in incubators and common spaces where energy costs are embedded in their rent. Their environmental impact is so small that they often start building their company without the environment in mind. And as start-ups grow, it becomes easy to ignore their future environmental impact. Even with the best intentions, there's not a lot start-ups can do to initially embed a culture of sustainability.

This is not to say that start-ups are not interested in sustainability at the early stages - many are. However, supports that help guide current and future decision-making especially when medium or long-term security seem clear, are limited. Knowing how to grow green, build a culture of sustainability from day one, and market these values to the community at large can be difficult.

These are the problems that Sustainable Waterloo Region (SWR) is interested in solving. Waterloo Region has a strong business culture of sustainability. The Start-ups Grow Green pilot project will work to expand this culture to include the start-up world. It will work to provide resources, supports, networks, and an attitude of sustainability that makes it simple and lucrative to develop a sustainable company. The pilot will support start-ups to carry out sustainability visioning and set growth milestones that will help them become a low carbon SME.

Once the pilot is fully tested, we will scale the approach to different communities and retrofit the resources to existing SMEs who want to transform into sustainable businesses. The pilot will draw on SWR’s experiences with Change Management, Energy Management, Community Development and Sustainability Culture Building to create Sustainability Development Milestones for start-ups and even SMEs in a growth phase.

Desirability

How do you know that your solution is desirable to SMEs, and will reduce GHG emissions?

Policies, engagement, and time are the 3 key ingredients for GHG reductions. We know this because the Regional Sustainability Initiative currently works with over 55 SMEs to help them transform their sustainability goals into action. Since it began in 2009, the program has been collecting data on these actions using detailed annual surveys and interviews. In addition, twice-annual sustainability workshops for members have helped us brainstorm targeted real-world sustainability challenges; and our events held over the past ten years have seen approximately 8000 attendees learn from various technical and specialty speakers on various topics. In total, we have worked with more than 120 organizations in Waterloo Region and led dozens of interviews, green team meetings, and workshops. We developed and currently support a gamification program, employee engagement programs, a change management certificate, facility energy walk-throughs and much more. The Regional Sustainability Initiative has what could be the largest and most detailed longitudinal SME sustainability data-set in Canada. Using this data, we correlate actions and policies with success. We have found the following:

• Smaller companies are less likely to have formal sustainability policies that affect GHG reductions compared to larger companies (19% to 22%)
• Companies with target sustainability policies are more likely to have GHG reduction targets (26% compared to 17%)
• Smaller companies are more likely to directly use our services.
• The more services members use, the longer they stay in the program
• Companies who work with the Regional Sustainability Initiative for longer than 5 years are more likely to have sustainability policies (24% compared to 16%)
• The longer an organization stays in our program the more likely they are to set a GHG reduction target (33% compared to 69%)

By analyzing these trends (and many more) we have a pretty good sense of who is likely to achieve GHG reductions. And it's not just data that makes us confident. We've seen successes and failures first hand. Athena Software has been a member since 2009 when they had only 8 employees and a sustainable vision. Now they're upwards of 200 employees and have a smaller footprint in 2017 than they did in 2010. We've been tracking each step they've taken and many of their actions are simple to duplicate. We have heard from Focus21 the resources they need to grow sustainably. And we have learned what not-to-do from a half-dozen or so other start-ups who have left our program. We've conducted off-boarding interviews with all of them and know how to improve. In short, we've been conducting detailed market research for years and know what's possible and what's effective. 

Feasibility

What actions do you propose?

The Start-ups Grow Green Project will occur in seven phases:

Phase 1: Conduct Preliminary Analysis (September to November)

• Hire Grow Green Project Coordinator
• Mine existing survey and interview data for trends for GHG reductions in SMEs with particular attention to human resources, procurement, facilities, fleet, corporate social responsibility, corporate culture, and policies.
• Review our members’ B-corp scores and answers for further trends
• Amalgamate best-practices and policies for successful SMEs
• Determine timelines and stages of development
• Overlap sustainability indicators with start-up canvasses and milestones as developed by incubators like Communitech, Velocity, St. Paul's Greenhouse, and Accelerator Centre
• Generalize and operationalize existing case studies with previous start-up members of the Regional Sustainability Initiative
• Develop ‘sales deck’ and case for pledging green
• Beta-test preliminary vision with in-person conversations with the Accelerator Centre's CleanTech companies 

Phase 2: Develop Working Concept of ‘Start-ups Grow Green’ Plan (November to January)

• Develop an initial draft of the Start-ups Grow Green plan and include key sustainability actions at key start-up milestones & phases 
• Form SME working group from successful members of the Regional Sustainability Initiative and the grant consultants mentioned below
• Host various workshops to vet the plan and edit
• Begin personalization, localization, and generalization of best practices and develop resources

Phase 3: Develop first full draft of ‘Grow Green’ Milestones (November to February)

• Develop a start-up working group with the help of existing members and local incubators
• Host a series of workshops to vet the plan and edit
• Refine plan and resources

Phase 4: Develop resources (January to March)

• Fully develop resources and vet with select members of the start-up working group
• Consult with local professionals, lawyers, and consultants to finalize and formalize resources as they map with start-up milestones

Phase 5: Pilot Projects and Initial Members (February to April)

• Put together an education plan (including a ‘grow green pledge’)
• Develop training plan (including small-scale Change Management, Energy Management, Green Teams developments, etc.)
• Recruit participants to prove the concept and create case studies
• Pilot participants will come from existing members and the working group
• Begin testing resources with start-ups and tracking results
• Ensure policies and other recommendations get implemented
• Recruit start-ups to become Initial members of the Regional Sustainability Initiative Grow Green Pledge

Phase 6: Launch program (May)

• Logo and Brand Development
• Finalize training and resources
• Promotions and Program sustainability details
• Launch Event

Phase 7: Scale and Maintain program (June)

• Create a duplication plan for other Green Economy Hubs in Ontario through Green Economy Canada
• Continue to monitor results and partner with local academics to publish
• Plan for implementation with existing SMEs

Additional Details:

Working Groups

Sustainable Waterloo Region has conducted several working groups in the past – initially in the development of what was then called the Regional Carbon Initiative and then again in 2016 when the program evolved to the Regional Sustainability Initiative. In all cases, there were Working Groups to address and develop the programs. We will host similar workshops for the Start-ups Grow Green program. Participants will include various local experts and practitioners.

Project Plan Details: Resources

• Pitch: Understanding the environmental impact now and when you grow (at 50, 100 FTEs)
  • The cultural effect of ignoring sustainability
• This is what you need to learn when you get your first lease
  • When you buy your first building
  • Developing HR strategies
  • Setting and scaling your procurement processes
  • Setting organizational policies and creating a culture of sustainability
• List of programs and opportunities
  • B-Corps
  • Marketing
  • CSR Strategies at large
  • Car-Share
  • TravelWise
• Things you may not think of
  • Why and how to promote biking to work
  • Here’s where you go for incentives

Promotions and Recruitment

• Promotions and Recruitment
• Communitech (Help identify and recruit interested start-ups)
• Accelerator Centre (Help identify and recruit interested start-ups)
• St. Paul's Greenhouse (Help identify and recruit interested start-ups)
• Hold communication sessions with Regional Sustainability Initiative members
• Word-of-Mouth and additional snowball recruiting techniques

Scaling

• EvolvGreen – EvolveGreen is a green tech incubator out of the Evolv1 building at the University of Waterloo’s Research and Technology Park. Sustainable Waterloo Region co-manages EvolvGreen with the Accelerator Centre. The ‘Grow Green’ Milestone or Pledge will be a feature of this incubator.
• Green Economy Canada – train other hubs to develop a ‘grow green‘ program
• We work with several SME’s who are mature but are still interested in a deeper engagement with sustainability. The work will be available to modify to become compatible with existing SMEs who are interested in transforming their operations to be sustainability focused.

Who will take these actions?

Matthew Day. Regional Sustainability Initiative Program Manager, Sustainable Waterloo Region. Matthew is a certified energy manager and has been working with SMEs on sustainability issues since 2009. The Regional Sustainability Initiative is a member-based program for organizations in Waterloo Region interested in setting GHG, waste, or water reduction targets. 

Matthew will be the project lead.

Garth Yule. Managing Director, Junxion Consulting. Garth is a communications and business strategist that helps organisations manage information in the public interest. Junxion is an international social impact consultancy that works to catalyze progress on social and environmental sustainability.

Garth will consult on the creation of the material and the measurements of success.

Ilya Peskov. CEO, Focus21. Focus 21 creates customized platforms, derived from applied innovation solutions unique to each client’s situation.

Ilya, as a representative of our target market, will consult on the structure of the working groups and the usability of the materials 

Diane Stanley-Horn. Director, Athena Software. Diane is a founding partner and director of Athena Software.net, a Waterloo Region tech company providing software solutions and consultation services to a diverse range of organizations in the human services sector

Diane will draw on her experiences on 'growing green' to consult on the efficacy of the materials and supports

Cameron Wind. Manager, Programs & Client Experience, Waterloo; Accelerator Centre. 

Cameron, though his direct connection with clean-tech start-ups, will help with the structure and recruitment of the working groups and pilot groups

Regional Sustainability Initiative Grow Green Coordinator: This position will be hired based on funding and will take on the everyday operation of the project including consulting with experts, conducting relevant primary and secondary research, and developing the directed resources

Regional Sustainability Initiative Grow Green Working Group - A consortium of local SME and start-ups drawn direction from our current membership of 68 organizations, the Accelerator Centre, and other incubators as interested including St. Paul's Greenhouse; Communitech; and Velocity.

Grow Green Pilot Group. A collection of 18 start-ups who will take the 'Grow Green' pledge. These organizations will come from the Regional Sustainability Initiative membership, the 9 organizations in the Accelerator Centre's Clean Tech incubator, the Grow Green Working Group and other start-ups in Waterloo Region

Where will these actions be taken?

Project Development: Waterloo Region

Project Headquarters: EvolvGreen is a new sustainability incubator Sustainable Waterloo Region manages. This will be the home base of the development of the project. Grow Green start-ups will have access to certain EvolvGreen resources.

Scaling: Over the length of the program, we will track the success of participating members and create a scaling plan for other communities. Green Economy Canada will be our primary partner for scaling.

What are the proposal’s projected costs?

• Full-time staff member for 1 year           $ 80,000.00
• Focus Groups   $ 1,500.00
• Professional Consultation          $ 9,500.00
• Launch Event    $ 4,000.00
• Promotions       $ 1,000.00
• Scaling - Training other Green Economy Hubs    $ 2,000.00

Total: $ 98,000.00

Scalability

Once the solution is built and implemented describe a path forward for it to scale to other users/companies.

• EvolvGreen – EvolveGreen is a green tech incubator out of the Evolv1 building at the University of Waterloo’s Research and Technology Park. Sustainable Waterloo Region co-manages EvolvGreen with the Accelerator Centre. The ‘Grow Green’ Milestones and Pledge will be a feature of this incubator. EvolvGreen is working with Wilfrid Laurier University to scale its model. The Grow Green milestones and pledges could be a part of that scaling.
• Green Economy Canada. Train other green economy hubs to develop a ‘Grow Green‘ program
• We work with several SME’s who are mature but are still interested in a deeper engagement with sustainability. The work will be available to modify to become compatible with existing SMEs who are interested in transforming their operations to be sustainability focused.

How will your solution lead to change on a larger scale over time (i.e. 3 to 5 years out)? How many businesses can potentially be affected by your solution?

We are building the next generation of sustainability leaders in Waterloo Region. We expect many of the organizations who use the Grow Green Resources will become members of the Regional Sustainability Initiative.

We expect upwards of 18 start-ups will participate in the Grow Green program in the first calendar year. That number is expected to grow to 50 by year 4. 

As we've seen from Athena Software, it is difficult to reduce the GHG impact of a start-up company but we can flatline GHG impact at a relatively early phase. The best results are mid-term and indirect and come in three categories:

Normalizing the culture of sustainability within the business setting. For example:

• Corporate Policies (procurement (e.g. meatless meals), flexible scheduling, electric vehicle / transit rebates, 
• Dress codes (e.g. conducive to biking to work)
• Offices in transit friendly and walkable locations
• Office Showers

Unprecedented levels of sustainability reporting. For example

• New formats - not just published sustainability reports, but public targets and third party recognition
• New reporting organizations. Not just for large organizatons with sustainability managers, but not for small organizations
• Increase the scope of reporting (e.g. employee commuting, business travel, local procurement)
• Reporting using local frameworks for local issues (climate change affects, crops, landuse, biodiversity, etc.)

Building the demand of sustainable solutions and technologies. For example:

• 'Green' / Low Carbon Servers (esp. for software companies)
• Carbon Offsets / Renewable Energy Credits
• Electric Vehicles / Transit Passes
• Communication tools

What business and funding model have you considered for your solution to become sustainable?

We will be using the same approach in developing this program as we used in launching the Regional Carbon Initiative in 2009 and the Regional Sustainability Initiative in 2016. In all cases, the program was developed with two working groups: a general and a targeted working group. Resources, milestone developments, and significant background research all played a central role in the program development. A majority of the working group participants became members of the program in the future. 

Impact

What impact will the proposed actions have on reducing greenhouse gas emissions?

The Regional Sustainability Initiative member have committed to reducing 58,000 tonnes of GHGs a year. Given that we have 68 members, that's about 850 tonnes / member / year.

If even 3 of our 18 pilot members join the Regional Sustainability Initiative and set a GHG target its reasonable to expect they will reduce 2,500 tonnes of GHGs / year. 

Perhaps the biggest impact, however, will be indirect. Grow Green pledges will boost the low-carbon economy by creating demand, boosting innovation, and normalizing the culture. While difficult to measure at this phase, it would be unsurprising if the indirect benefits were at least 10 times higher than the primary benefits. After all, with the purchase of Renewable Energy Credits, reduced commuting, etc companies would become carbon neutral. 

What are other key benefits?

Developing a culture of developing carbon neutral companies will provide a reputational boost to the cleantech incubators, social benefit incubators (like Greenhouse), and the region at large.

This project leads a boost to the Region of Waterloo's plan to reduce it's GHG emissions by 80% by 2050 and shows that for-profit organizations take environmental issues seriously and are a key part in climate change solutions. 

About the Authors

Matthew Day has been developing sustainability programs for the past 10 years. He has recently become a Certified Energy Manager and is currently developing a Change Management Certificate for members of the Regional Sustainability Initiative - the program he has been running since inception in 2009.

He has a Masters Degree in Geography from the University of Toronto

Related Proposals (optional)

none

References

The data we draw on are proprietary. It consists of:

• 10 years of sustainability surveys by our member organizations (we have roughly 50 surveys a year)
• GHG data from our members. We have approximately 200 GHG inventories in Waterloo Region including over 10,000 data points as managed by our Energy and Sustainability System.
• Working Group brainstorming sessions of our 68 member organizations hosted 2 times a year
• Event data from the 10 events we host each year
• Empirical data from hundreds if not thousands of green team meetings, coaching sessions, casual conversations, and workshops with sustainability-interested organizations.

We will draw on start-up canvases, milestones, and phases of the incubators we will partner with.