The Sustainability Gap, An Inconvenient Consequence of Going Green

By George B. Brooks, Jr. Ph.D.

 

It seems there really is a law of unintended consequences causing no good deed to go unpunished. To build sustainable prosperity going green forward is necessary. However, I think we may have missed something resulting in many small businesses not being able to qualify to win contracts due to lack of green credentials. Allow me to elaborate.

 

A few months ago I had the pleasure of speaking to the Supplier Diversity managers for a number of utility companies. My subject was building green capacity in minority suppliers. As part of the Q & A I learned a most remarkable fact. It seems that for the utilities that had sustainability programs and had “greened” their supply chains, many of their minority suppliers were now unable to respond to RFPs for lack of “green” certifications. This revelation raised a red flag with me and my research since then has done little to alleviate my concerns.

 

 

This “Sustainability Gap” is not racially based. Further research found many smaller contractors no matter who owned them were affected by the sudden move to green. It does seem however, that smaller minority owned firms are disproportionately affected, likely due to other inhibitory factors beyond green.

 

 

This challenge appears to have been exacerbated by the stimulus package. Within the ARRA funds there is money for major green projects such as solar power plants and low-income home weatherization. These moneys are typically sent to the states, distributed to projects, which then hire prime contractors. Other monies were distributed to green job training programs. Unfortunately from what I have been able to find, little of any money was dedicated to small business training programs to qualify the subcontractors that would hire the majority of green jobs.

 

More and more companies and governments are now greening their supply and value chains. As a result they are requiring subcontractors not only to be green certified, but to verifiably sustainable in their business practices. These coming requirements suggest that if not addressed the sustainability gap is only going to grow.

 

One could say, just let the market work. The strong and prepared will survive and the weak will fall. For some reason however, I find this solution unsatisfying and unnerving as do many of the government and private sector officials I have discussed this issue with.

 

Were we in a normal business cycle where capacity building loans would be available to good businesspeople, I would not be concerned. As things stands today however, in my opinion if we let these existing companies fall the time necessary for new companies to rise the fill the gap could place a drag on the economy we do not need. Their failure would also hurt many good hard working people.

 

A Call to Action

 

One solution set we are seeing already is where corporations and government agencies are rising to help defray the cost of a small business to earn the necessary certifications. Generally part or all of the cost is refunded upon successful completion of the course work. This is a good development however more must be done. Perhaps some innovative training programs can be developed within the rules and regulations of the stimulus money. Another solution would be to add green supply chain training modules to the multitude of small business and supplier diversity training and consulting services corporations and governments already sponsor across the nation. Banks working with the SBA could develop new loan programs.

 

All of these solutions have potential. But until they are implemented, two important things can be done immediately to help mitigate the situation:

 

1. Corporations and governments that have gone green partner with their local chambers of commerce and minority business advocacy agencies to let their current and potential suppliers know in no uncertain terms, what green credentials will be expected of them in the near future. These same groups may then collaborate to find innovative solutions to the problem.

 

 

It is only when all parts of the business community are participating that we may truly step toward a more sustainable society.