Green entrepreneurship: Striking the balance between profit and idealism

Patrick Gregori studies entrepreneurs who have a strong environmental focus. They are passionate about ecological goals, but struggle to reconcile these objectives with the economic viability of the company. A research team including Gregori has come up with several interesting recommendations for action to support ecopreneurs.

We are faced with major challenges such as climate change, environmental pressures, and social inequality. The desire to protect nature and promote sustainability is falling on fertile ground in the green start-up scene. “Green entrepreneurs” want to meet these challenges and make a contribution to the environment, thus forging new entrepreneurial paths. Ideas grow into a business plan, which is then implemented in the form of a start-up. Start-ups in the environmental sector aim to promote environmental sustainability and consciously create environmental value on the basis of financial viability. It seems obvious to ascribe a great deal of success to these so-called ecopreneurs. But that’s not always the case, as Patrick Gregori, Patrick Holzmann and Malgorzata Wdowiak from the Department of Innovation Management and Entrepreneurship have discovered in their research. “The personal development from environmental activist to environmentally oriented entrepreneur is a step that is not as easy as many might imagine”, Patrick Gregori confirms.

Ecopreneurs have one thing in common: They are primarily driven by the consequences of entrepreneurial action for society and the environment. But they face the same hurdles as traditional start-ups, especially when it comes to financing. “The biggest challenge is to balance ecological values with commercial aspects”, Patrick Gregori summarises.

During the initial phase, the research team conducted 26 interviews with business founders in Austria who operate in the environmental sector. Finding interview partners was no easy task. The team could not draw on existing databases, but competitions and docking points such as Greenstart, a platform for climate-relevant business ideas, proved very useful here. As a result, it was possible to identify and interview entrepreneurs with an environmental focus. The research was primarily concerned with shedding light on the identity constructions of the green start-ups.

When asked about the types of industries the ecopreneurs tend to work in, Gregori replies: “This varies greatly and covers many different areas. The projects are very diverse and include, for instance, an online platform for green accommodation that indicates the carbon footprint or the energy source, an ecological composting system for households that uses worms, and an organic portable toilet.” The results of the surveys were published in the Journal of Business Research in 2021. They reveal that entrepreneurs need to understand how to combine both environmental and commercial considerations. “Many entrepreneurs identify very strongly with the goals of their activity, while the economic rationale is neglected. They distance themselves from the typical values associated with classic enterprises, which are geared towards profit, growth and self-serving actions”, Gregori sums up. This places them in an oscillating relationship between identity, meaningfulness and emotions. Founders are primarily motivated by the desire to “protect nature, feel a connection to nature and believe it to be the supreme good”. They base the rationale of their actions on the implementation of their environmental values. “They succeed in limiting themselves at the private level because they are able to draw a lot of meaning from their corporate activities”, Gregori explains. He notes that this is in stark contrast to the commercial corporate values.

“They accept self-sacrifice, long working hours and financial hardship.” (Patrick Gregori)

The entrepreneurs surveyed reported that they had pushed themselves to the limit, made sacrifices and cut back considerably so that the company could grow. Ultimately, this self-sacrifice led to frustration, dissatisfaction, sadness, dismay and anger at the values and practices of the commercial mindset, such as growth and profit. The results showed that various forms of self-sacrifice such as long working hours, unpaid work and financial hardship were willingly accepted by some entrepreneurs for the common good, such as the conservation of nature. This suggests that when entrepreneurial activity is perceived as meaningful and highly fulfilling, the boundary between private life and entrepreneurial pursuits fades away. Gregori believes that a shift in their self-image from “corporate environmentalists” to “environmental companies” would be advisable. By engaging in frank discussions, environmental entrepreneurs can learn not to reject commercial logic out of hand and to acknowledge positive aspects they can identify with. “A certain basic openness to commercial aspects can lead to a strong drive to move one’s business forward and represents the route to generating entrepreneurial impact.”

Patrick Gregori points to support systems for social and environmentally oriented start-ups, such as the “Social Innovation Lab Carinthia” project initiated by the Department of Innovation Management and Entrepreneurship.

for ad astra: Lydia Krömer