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The Environmental Impact of Different Business Structures

By: Jack Nicholaisen author image
Business Initiative

In the age of climate change and environmental awareness, many entrepreneurs and business owners are reevaluating their impact on the planet.

One aspect that is often overlooked is the environmental consequences of different business structures, such as corporations, small businesses, and non-profit organizations.

By gaining a deeper insight into the factors that influence a company’s environmental footprint, entrepreneurs can make informed decisions to reduce their impact and become eco-conscious leaders in their industry.

In this article, we delve into the most recent statistics and trends to provide a comprehensive understanding of the ecological impact of various business forms.

Let’s get into it…

What is Environmental Impact?

Definition: The effect a company or industry has on the natural environment.

This includes both direct and indirect effects, such as air pollution, water pollution, waste production, and resource depletion.

The environmental impact of a company can be influenced by a variety of factors, including the type of industry it belongs to, its size and structure, and its geographical location.

Understanding these factors is crucial for entrepreneurs who want to reduce their ecological footprint and contribute to a sustainable future.

In order to measure environmental impact accurately, businesses must consider all aspects of their operations that have an effect on the environment.

This includes activities such as transportation, manufacturing processes, energy consumption, and waste management.

By taking steps to reduce their environmental impact, companies can not only benefit the planet but also improve their public image and attract customers who value sustainability.

Let’s see what it really means to be green

The Environmental Impact of Corporations

Corporations, by their very nature, are large-scale entities that often have a significant environmental impact.

According to a 2016 study published in the journal Science of the Total Environment, the world’s largest 500 corporations account for over 13% of global greenhouse gas emissions.

This highlights the scale of the environmental impact that large corporations can have.

Several factors contribute to the environmental impact of corporations.

Some of these include production processes, energy consumption, waste generation, and resource extraction.

A 2015 report by The Guardian found that companies in industries such as oil and gas, mining, and agriculture tend to have a more significant ecological footprint than those in other sectors.

However, some corporations are actively working to reduce their environmental impact through initiatives such as reducing waste, improving energy efficiency, and investing in renewable energy sources.

A report by the United States Environmental Protection Agency (EPA) shows that businesses were responsible for approximately 12% of greenhouse gas emissions in the country.

The report also highlights how transportation, industrial processes, and electricity generation are the top three contributors to these emissions.

Another study published in the Journal of Cleaner Production found that small businesses have a lower environmental impact than larger corporations.

This is because they tend to consume fewer resources and produce less waste. However, this does not mean that small businesses should neglect their environmental responsibilities since their actions can still have an impact on local ecosystems.

By considering these sources and others like them, entrepreneurs and business owners can gain a better understanding of the environmental impact of their business structure and take steps to mitigate it.

The Environmental Impact of Small Businesses

Small businesses, which generally have fewer resources and a smaller scale of operations, tend to have a lower environmental impact than large corporations.

However, small businesses still contribute to environmental degradation, as they collectively make up a significant portion of the economy.

According to a 2019 report by the U.S. Chamber of Commerce, small businesses account for approximately 50% of U.S. GDP and 48% of U.S. employment.

Factors that influence the environmental impact of small businesses include the nature of their operations, the efficiency of their processes, and their commitment to sustainable practices.

Although small businesses often have limited resources, they can still adopt eco-friendly measures such as reducing waste, conserving water, and using energy-efficient appliances.

Additionally, small businesses can leverage their flexibility and adaptability to implement innovative green solutions.

A 2018 report by Business for Social Responsibility (BSR) analyzed the environmental impact of different business models, concluding that companies with a more sustainable business model tend to have a lower ecological footprint.

The report also highlights how businesses can integrate sustainability into their core values and operations.

Another study published in the International Journal of Sustainable Development and World Ecology found that companies with a corporate social responsibility (CSR) strategy tended to have a lower environmental impact than those without one.

This suggests that integrating CSR practices into a company’s operations can lead to a more sustainable future.

Furthermore, GreenBiz is an online resource that provides news, analysis, and best practices for sustainable businesses.

It covers topics such as renewable energy, circular economy, and sustainable supply chains.

Entrepreneurs and business owners can use this resource to stay up-to-date on the latest trends and initiatives in sustainability.

By utilizing these sources and others like them, entrepreneurs can gain valuable insights into how they can reduce their environmental impact and become leaders in sustainability within their industry.

The Environmental Impact of Non-Profit Organizations

Non-profit organizations, which focus on achieving social, environmental, or cultural goals rather than maximizing profits, often prioritize sustainability and ecological responsibility.

However, non-profits still have an environmental footprint, as they consume resources and generate waste just like any other organization.

A 2014 study published in the journal Nonprofit Management & Leadership found that non-profit organizations can have a lower environmental impact than their for-profit counterparts, depending on their mission and activities.

Factors that influence the environmental impact of non-profit organizations include their size, the nature of their operations, and their commitment to sustainability.

Many non-profits actively work to minimize their ecological footprint through initiatives such as recycling programs, energy conservation, and environmental education.

According to a 2019 report published in the Journal of Cleaner Production, non-profits in sectors such as healthcare and education can have a significant ecological footprint due to their large-scale operations.

However, many non-profits are taking steps to reduce their environmental impact.

A 2022 article by GreenBiz highlights 10 U.S. non-profit organizations that are leading the way in sustainability, including Ocean Plastics Leadership Network and GreenBlueGreen Alliance.

These organizations have implemented initiatives such as renewable energy sourcing and sustainable food production to reduce their ecological footprint.

Moreover, Sustainalytics is a company that provides ESG (environmental, social, and governance) ratings for non-profit organizations.

Their research helps investors and stakeholders make informed decisions about which non-profits align with their values and goals.

By utilizing these tools like Sustainalytics, entrepreneurs can gain an understanding of the environmental impact of non-profit organizations and identify ways they can implement sustainable practices within their own organization.

As mentioned earlier, the environmental impact of a business is significantly influenced by the industry it operates in.

For example, businesses in the oil and gas, mining, and agriculture sectors often have a more significant ecological footprint due to the nature of their operations.

However, some industries have been making strides in reducing their environmental impact.

For instance, a 2018 report by the Ellen MacArthur Foundation highlighted the efforts of the fashion industry to transition to a circular economy, which aims to minimize waste and maximize resource efficiency.

Entrepreneurs and business owners should consider the specific trends and factors influencing their industry’s environmental impact.

By understanding the unique challenges and opportunities within their sector, they can develop targeted strategies to minimize their ecological footprint and contribute to a more sustainable future.

Becoming an Eco-Conscious Business Leader

As entrepreneurs and business owners, understanding the environmental consequences of your chosen business structure is crucial to becoming an eco-conscious leader in your industry.

By considering factors such as industry-specific trends and the nature of your operations, you can develop targeted strategies to minimize your company’s ecological footprint and contribute to a more sustainable future.

Are you ready to take the next step in becoming an eco-conscious business leader?

Begin by evaluating your current environmental impact and identifying areas for improvement.

Then, implement targeted strategies to reduce your ecological footprint and actively work towards a more sustainable future.

Remember, every step counts…

We can help you start making a difference today!


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About the Author

jack nicholaisen
Jack Nicholaisen

Jack Nicholaisen is the founder of After acheiving the rank of Eagle Scout and studying Civil Engineering at Milwaukee School of Engineering (MSOE), he has spent the last 4 years disecting the mess of informaiton online about LLCs in order to help aspiring entrepreneurs and established business owners better understand everything there is to know about starting, running, and growing Limited Liability Companies and other business entities.