Types of Sustainable Entrepreneurs

industrial ecology, the focus lays on resource minimisation and the use of clean technologies. Industrial ecology implies “that a circular economy will be beneficial to society and to the economy as a whole” (Andersen, 2007, 133).

Septimius Krogh also pointed out that in order to change supply chains into more circular ones, there is a strong need for logistics being organised more efficiently (Interview Septimius Krogh, 2017b). These inefficiencies represent an opportunity on the market (Cohen & Winn, 2007) which Phenix recognised and exploited quite successfully so far on the French market.

Some of the academic discourse actually does reflect the definitions I could gain from my empirical data but also the confusion, as no universal definition emerges. Many researchers argue that sustainable entrepreneurship is characterised by taking the 3Ps – planet, people, profits - into account when measuring and capturing business performance (Kuckertz & Wagner, 2010, Bell & Stellingwerf, 2012, Elkington, 1998). The same thinking of including environmental, social as well as economic aspects within your organisation in order to be a sustainable venture, could be identified in both of the case organisations Løs Market and Phenix (Interview Boyer Chammard, 2017b, Interview Septimius Krogh, 2017b).

During the research process, I learned that there is not only one definition and also not one type of a sustainable entrepreneur as many differences also arise in practice.

Therefore, the next section will reveal different forms of sustainable entrepreneurs that I could observe in the case organisations.

Phenix’ activities correspond to sustainable entrepreneurs who solve environmental issues by “contributing to helping extant institutions […] in achieving their goals” as has been described by York & Venkataraman (2010, 451-451). They aim to make inefficient supply chains more efficient hence sustainable with the services they are providing.

According to Cohen & Winn (2007), market imperfections can arise due to inefficient firms. As opposed to the neo-classical economics school of thought which argues that firms are efficient in allocating resources, many times the production, distribution and other aspects of resource allocation are handled very inefficiently. This market imperfection, therefore, creates opportunities for entrepreneurs to eradicate them and have a positive impact on the environment.” (Cohen & Winn, 2007). By providing redistributional services to its clients, Phenix is decreasing inefficiencies in the distributional networks of supermarkets, retailers, wholesalers or other customers.

The vast majority of Phenix’ clients take advantage of Phenix’ services due to its inherent economic advantage and not for environmental reasons. Only a small fraction of companies use their services to reach certain environmental or social goals (Boyer Chammard, 2017a). This is in line with Schaltegger’s and Lüdeke-Freund’s suggestions about the main driving factors for companies to engage in social and environmental activities (2012).

“The role of costs and cost reduction is often addressed as a driver with regard to energy savings, the reduction of material flows or cleaner production approaches.”

(Schaltegger & Lüdeke-Freund, 2012, 6-7)

Additionally, Phenix’ clients often use the positive impact that has been created through Phenix’ services as a tool for marketing and communication matters. By this, they aim to attract and appeal to customers through their engagement in environmental sustainability food waste issues (Interview Boyer Chammard, 2017a).

Løs Market’s activities, on the other hand, are “creating new, more environmentally sustainable products, services and institutions through doing things incumbent institutions do not, and cannot do.” (York & Venkataraman, 2010, 451-452) as they offer an alternative and sustainable solution to grocery shopping.

Furthermore, by providing information and raising awareness revolving environmental issues, one of Løs Market’s activities is to tackle information asymmetries present in our economy today.

“Such information asymmetry is a primary cause of market failure (Akerlof, 1970) and is also a main driver of entrepreneurial opportunities (Kirzner, 1973; Sarasvathy et al., 2003;

Venkataraman, 1997). “ (Cohen & Winn, 2007, 43)

Customers are often unaware of the unsustainable and environmentally degrading impacts of supply chains as they are usually not provided with any insights on this topic.

“The people don’t care what’s going on, they don’t know what’s going on from suppliers, producers to the supermarkets, to the shops. They don’t care because it’s not visible - it’s all in the trucks, it’s all in the production, nobody knows because they don’t really see

it. But I see it because I live with that. (Interview Hamburger, 2017, Appendix J, 119) The general public is usually not informed about how products are sourced and which environmental issues are involved in the process. Thus, Løs Market aims to make the invisible visible to the customers in regards to the supply chain and the food they consume.

“So, this is the next bubble I will tell you. […] I mean it’s not a bubble, but to change the system between us and the final customer. We are on the way, but we need to do it from

supplier to us, that’s another barrier.” (Interview Hamburger, 2017, Appendix J, 119) However, not much informational material about illuminating the supply chain has been made available by Løs Market yet, which they regard as one of their tasks and missions to fulfil, still³. They aim to reduce information asymmetries on the market in order to enable customers to take informed purchasing decisions.

Løs Market’s customers are usually environmentally aware individuals looking for sustainable consumption solutions and are avoiding to harm the environment by their consumption behaviour (Interview Septimius Krogh, 2017a).

Opportunity-Driven and Sustainability-Driven

3A more detailed discussion about Løs Market’s communication challenge can be found in section 5.3.2.

Furthermore, Parrish (2010) describes two different types of sustainable entrepreneurs, one being the opportunity-driven, the other being the sustainability-driven ones. The opportunity-driven entrepreneur is looking for opportunities in the market that will contribute to environmental sustainability, with the main goal of establishing a profitable organisation. The sustainability-driven entrepreneur, on the other hand, puts the environmental mission first while economic goals such as reaching profitability are only the means to an end (Parrish, 2010). I argue that Phenix shows characteristics of an opportunity-driven approach while Løs Market can be identified as a sustainability-driven organisation as I will elaborate in the following.

Phenix is an organisation driven by environmentally aware individuals who are aiming for less waste in our economy by making use of the circular economy approach.

Nevertheless, their approach, especially in Denmark, does resemble the one of an opportunity-driven entrepreneur to a higher degree. For example, Phenix was not as successful in Copenhagen as hoped with their original business model which works well in France. Thus, they started to look for other opportunities and adaptations to their business model, which would be more suitable for the local market.

“But obviously still it has to make economic sense, which was our problem with the model here.” (Interview Boyer Chammard, 2017b, Appendix K, 122)

As they had difficulties reaching economic sustainability in Denmark with their original business model they are currently looking into options to provide other services in Denmark that will meet the local demand. Market inefficiencies create opportunities to be exploited (Venkataraman, 2010) and Phenix is now on the search for these new opportunities. Furthermore, Phenix’ solution is not aiming at changing the existing system i.e. the supply chains completely to a sustainable one but rather aims at making existing supply chains less wasteful. As they saw an opportunity on the market they reacted and successfully exploited it to reduce environmental degradation.

Many sustainable entrepreneurs show idealistic characteristics as could be observed in the case of Løs Market. Idealistic goals such as “sustainability always comes first” (Field Notes Løs Market, 2017) are openly embraced and followed. Company goals are known to be strongly influenced by organisational leaders and can, therefore, be directly

related to the company (Schaltegger & Wagner, 2011). I argue that Løs Market is strongly shaped by idealistic aspects. Therefore, they put their environmental mission first and try to achieve it with the means of a for-profit as well as environmentally responsible and activist organisation. As mentioned before, Parrish (2010) classifies sustainable entrepreneurs into the ones driven by either opportunity or sustainability.

Hence, I identify Løs Market to be a sustainability-driven venture as their company is simply the means to an end which is bringing about environmental change.

This section outlined the characteristics of the case organisations and showcased how their approaches aim at different target groups as well. The next part of the analysis will provide insights from the empirical data on the challenges that these sustainable entrepreneurs are facing and how it connects to the literature.