B.C. is becoming a mecca for “green” businesses, says a University of Victoria professor who specializes in entrepreneurship and sustainability.

Victoria, for example, is an ideal place for a ‘‘sustainable valley,” says Boyd Cohen, because of its informal and formal networks, technology parks, physical infrastructure and culture – and more specifically, the reputation of its residents as ‘‘the tree-huggers of Canada.’’ Cohen contends that Victoria can fuel a sustainable entrepreneurial ecosystem that is based on a financially, environmentally and socially sustainable economy.

‘‘Vancouver shows a lot of those values as well, but you’ve got a big metropolitan city and it has a different flavour than Victoria does,’’ says Cohen, who recently delivered a paper on Victoria’s sustainable business attributes.

He hopes the B.C. capital will become like California’s Silicon Valley, which, over a 30-year period, evolved into a technology haven without damaging the land. Thanks to improvements in technology and the ability to spread information more quickly, Vancouver Island’s green valley might not need as much time to mature, he says.

Bayne Stanley, Business Edge
SPUD marketing manager Darren Stott says to be successful, green businesses have to educate their consumers.

Cohen defines a green business as one that finds a way to grow profit through the creation of technologies that have an environmental benefit, or can reduce or mitigate environmental damage caused by previous technologies.

One example is Vancouver-based Small Potatoes Urban Delivery (SPUD), which sells organic food and other environmentally friendly groceries and products to 5,000 customers in Vancouver and Victoria. SPUD marketing manager Darren Stott agrees B.C. appears to be very progressive compared to the rest of the world.

But Europe is about five years ahead of B.C. when it comes to organic food and produce, adds Stott, who emigrated to Vancouver from the United Kingdom to work for SPUD a year ago. ‘‘I actually think a successful green business has to grow with the market,’’ he says.

SPUD’s president David van Seters, a former KPMG chartered accountant, started the firm because he wanted to help reduce carbon-dioxide emissions from produce trucks, the majority of which come from out of province.

In keeping with the founder’s quest, SPUD’s products travel an average of 760 kilometres, whereas conventional products from California and other locales may travel thousands. The company’s 10 trucks in Vancouver and four in Victoria are also filled to capacity – in order to avoid extra trips – and certain neighbourhoods only receive groceries on certain days of the week. Four company vehicles also use alternative fuels.

SPUD only uses organic food grown without any pesticides, delivers groceries in reusable rubber tubs – instead of plastic or paper – that are washed with recycled warm water, and has donated more than $50,000 to Quest Outreach Society, which provides food to the homeless and other non-profit groups, including women’s shelters and drug-recovery centres.

To be a successful green business, Stott says companies must educate their customers and let them know as much as possible about the firm.

Thanks to word-of-mouth marketing – and crises such as mad cow disease and the avian flu, which have spurred sales – the message is getting through.

After starting up in 1998, SPUD is now reaching a profit, says Stott, even though the company charges 10 to 50 per cent more than conventional grocers, depending on the product, because its food is not mass-produced.

But other green business in B.C. are facing tough challenges, particularly on Vancouver Island, says the UVic’s Cohen. The first is an absence of venture capitalists – although Cohen praised Van City Credit Union for going out of its way to help green firms obtain financing.

Victoria’s high cost of real estate, island geography and lack of established companies that can serve as catalysts for spinoffs also pose problems. Cohen believes that green business operators should not let their passion to save the world override the best business practices.

‘‘Harness that passion, but maintain your business focus,’’ says Cohen, noting some companies that are environmentally friendly do not promote that fact – because they don’t have to.

Since there are not enough people willing to pay a premium for products just because they are environmentally friendly, green businesses have to make sure that they create value for their customers, Cohen says. Green startups may have to spend more than a conventional business, he adds, but the long-term savings – and profit – will be worth the extra investment.

Cohen praises Ballard Power Systems of Burnaby, which develops and markets fuel-cell technology to the automotive industry and other sectors, as one company that is ahead of its time.

BC Hydro recently announced that it has developed a hydrogen fuel-cell-based emergency backup system for utility applications, powered by Ballard’s Nexa RM series fuel-cell modules. Nexa has the capacity to replace battery-powered systems in as many as 500 of Hydro’s operations.

Hydro is field-testing Nexa at its Edmonds office in Burnaby.

‘‘We want to continue to enhance the reliability of our operation,’’ says Bruce Sampson, BC Hydro’s vice-president of sustainability. ‘‘This fuel-cell technology has the potential to do that in a manner that is also better for the environment and at a lower cost and with better performance.’’ Several organizations, including Canadian Business for Social Responsibility (CBSR) and the Value-Based Network are also trying to help green businesses start up and grow.

‘‘We’re seeing quite a lot of growth in what we call the mission-based green companies, particularly in the organic food movement,’’ says the CBSR’s Myrna Khan. She adds 90 of her group’s 140 members are green or mission-based firms.

‘‘We’re actually seeing traditional companies that are trying to turn themselves into green businesses,’’ says Khan, citing VEL Engineering of Vancouver as one example.

Founded in 1995, CBSR is a non-profit, business-led national group of small and large companies that aim to operate in a socially, environmentally and financially responsible manner.

Founding members include Alcan Inc., Citizens Bank of Canada, Hewlett-Packard (Canada) Co., Nike Canada, Scotiabank and the VanCity Group of Companies.

For SPUD’s Darren Stott, the business structure of a green company is no different than a conventional firm.

He agrees with UVic’s Cohen that environmentally friendly companies must sell the benefits that they can provide rather than emphasize their moral messages.

‘‘At the end of the day,” says Stott, “it’s about the quality of the product.”