Best Business Ideas for 2022: Sustainability

With consumers hungering for sustainable and eco-friendly choices, there's a fantastic market ahead for new businesses keen to show off their green credentials

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With growing consumer awareness and demand for planet-friendly products, the message is clear. Sustainability isn’t just good for the climate – it can be good for business, too

According to research from social media management platform SproutSocial, some 66% of consumers want the brands they use to be involved in social and political issues. New businesses that leverage this passion can set themselves up for great success, while also making a positive environmental impact.

Last year’s COP26 global environmental summit put climate back on the agenda. Since then, the government has put numerous measures into place to support green initiatives, not least green investment relief from 2023.

But what businesses will work well in this brave, new sustainable world? Here, we take a look at four growth sectors that are set to keep on growing.

The reusable and sustainable consumer market

Sustainable consumerism is a trend on the rise. As shoppers begin to understand the importance of protecting our planet, their purchasing habits are shifting.

The war on single use plastics is well underway, but it’s not just with packaging that consumers are changing their habits. For example, 31% of Gen Z respondents stated that if sustainable apparel was more widely available, they would purchase it over other brands.

As consumers become more environmentally aware, the potential success of starting a business in this sector increases. Plus, starting a new business venture in sustainable consumerism doesn’t necessarily mean breaking the bank, and it doesn't require a doctorate in environmental sciences either.

There are some great success stories from which to take inspiration. One sustainable brand taking the sector by storm is KAPDAA (The Offcut Company). The company turns offcut material into sustainable products, saving over 10,000 metres of fabric from going to landfill.

Nish Parekh, co-founder of KAPDAA, believes the future is bright for businesses in the sustainable fashion sector: “Green choices, now in vogue, present lucrative opportunities that may have previously seemed a hassle,” says Parekh. “Consumers already judge sustainability as a key importance when buying from brands; those slow to catch on stand to lose out.

Consumers already judge sustainability as a key importance when buying from brands; those slow to catch on stand to lose out.

Away from the fashion market, there’s further evidence of the potential of the sustainable consumer trend. Electronic marketplace Back Market has had a recent Series E investment round of £380 million – taking the business's valuation up to nearly £5 billion.

Back Market co-founder and CEO, Thibaud Hug de Larauze, states that the company’s goal is “to make refurbished electronics the first choice for tech purchases. We expect to see similar or even the same development in the electronics market as we have witnessed in the second-hand car market, where sales of second-hand vehicles have increased compared to new car sales.”

Business ideas to consider

Create a sustainable or upcycling clothing brand

Eco-friendly clothing production is projected to be sustainable fashion’s most expanding sector over the coming years, growing at an annual rate of 11.6%. High-profile reports and investigations into fast fashion brands have resulted in heightened consumer awareness of the environmental issues surrounding the production of clothing – and that means a growing customer base for new businesses to target.

With as little as 1% of clothes being recycled into new ones, there is a huge opportunity for small businesses to conquer the sustainable clothing sector by selling upcycled and recycled clothing. You could tackle a particular niche – such as baby and child clothing, which has an alarmingly short life span for growing kids and their constantly spending parents.

It’s a cheap and simple business model, too. You can set up an online store to sell your upcycled wares for an average fee of just £13 per month. Check out our review of the best ecommerce providers to find the perfect match.

Sustainable re-selling, recycling and refurbishing

Electronic waste, referred to as e-waste, is now the world's fastest growing waste stream.
Data from the Shift Project has revealed that 82.6% of e-waste isn’t recycled correctly, with the UK on track to become the largest producer of e-waste in Europe per capita by 2024.

This growing issue presents an exciting opportunity for savvy entrepreneurs to venture into the recycling, refurbishing, and re-selling product space. If you’re not feeling ready to take on Back Market and eBay in year one, consider starting local – your business could fill in a gap in local council e-waste collection while also turning a profit.

Offering his advice to startups, Back Market CEO Thibaud Hug de Larauze said: “The refurbished tech space is a rapidly expanding industry. If you have an idea, go for it. Don’t be afraid to try and fail. Be confident in your plan, know how to fill the gap in the market and be an advocate for why your business is important enough to change the space you are growing in. If you are taking on business partners, ensure you share the same vision and have a relationship based on trust.”

Launching a sustainability consultancy

Plenty of businesses – and their staff – are becoming increasingly aware of the environmental impact of their operations. This means there’s a tempting gap in the market for specialist consultancies to help other businesses improve their eco footprints.

While the Association for Consultancy and Engineering found that only 24% of SME clients requested zero carbon emission designs in 2021, change is afoot. Sustainable consultancy is on the rise, as 55% of large consultancies – along with 33% of smaller consultancies – begin to push clients towards a net zero design solution by offering it as standard.

There is promise and real opportunity in this sector, especially as the green investment relief fund is available from 2023, which will slash rates for businesses that have adopted green improvements. That’s an ideal topic to seek consultancy expertise on.

The projections for growth in sustainable consultancy are looking healthy, according to a report published by the Environmental Analyst, with approximately $9 billion over the next four years opening up in new market space.

But how can you jump into this growing and increasingly in demand sector? We’ve listed below some business ideas to consider in the sustainable consultancy space.

If you want more specific information on how to get started, check out our in-depth how to start a consultancy business guide.

Business ideas to consider

Sustainable waste consultancy

With the right applied knowledge and a hard-working team, you could set up a consultancy business in the sustainable waste management sector. One of the key contributing factors to an SMEs carbon footprint is its unsustainable waste management.

According to government-funded consultancy Envirowise, 70% of office waste is recyclable, yet just 7.5% reaches a recycling facility on average.

SMEs need external guidance when it comes to sustainable processes like waste management. You could make SMEs aware of the environmental impact they are having, whilst helping get rid of their waste in a way that can increase profitability in a sustainable way.

One company that is excelling in this sector is Axil Integrated Services. It has seen 100% growth in the last year, with revenue jumping from £10m in 2020 to £21m in 2021.

Ed Pigg, Managing Director of Axil, offered his advice to startups in the waste consultancy sector, saying: “You have to flip the concept of waste on its head and look across the whole end-to-end production cycle, not just what comes at the end. So, yes, recycling is important. But it’s only effective if you are properly segregating materials. And going back to the waste hierarchy, the most effective way of dealing with waste is to not create it in the first place – so efficiency and sourcing the most effective materials is crucial.

The other thing to consider is that customer expectations are low because, from a procurement perspective, they just want the basics done well. Going that extra mile is much harder. That’s why we’ve been able to come in and offer companies a much higher quality of service.”

Launch a sustainable consultancy via an app or online platform

SMEs need information, support and expert guidance to help them reduce carbon emissions. Having a one-stop shop for all things green gives business owners the opportunity to receive support and guidance quickly and easily from consultants and professionals around the UK on one easily accessible platform.

One such platform leading the way in this sector is Zellar, which was created by sustainability entrepreneur Gary Styles as a way to provide support and expertise for SMEs through a simple all-in-one platform.

Explaining Zellar’s business model, Gary said “At Zellar, we make sustainability simple and practical for every small business owner. We charge just £5 per week for our micro-business programme, which small business owners can execute in their own time and at their own pace. We provide you with a custom programme to reach net-zero by 2030 – two decades ahead of the UK government’s target.”

If you have expertise in the sustainability space, why not turn this into an approachable app or website of your own? It’s never been easier or cheaper to create your own business site – check out our best free website builders guide to get started.

Supporting the electric vehicle rollout

arrivalbusElectric vehicles aren’t just the future – they’re the present, too. According to the latest stats, EV car sales increased by 186% in 2020, and in November 2021 electric vehicles counted for 19% of all car sales.

With an estimated 345,000 electric vehicles on the UK’s roads, and £620m in grants for EVs and charging points from the government, it's clear that electric vehicles aren't going anywhere anytime soon.

This presents an exciting opportunity for startups and inspired entrepreneurial engineers – there are chances to start a business in the production, installation, or maintenance of electric vehicles.

Business ideas to consider

Electric vehicle hiring and subscription

Consumer confidence in electric vehicles will take time to grow – while prices remain high for new EVs, plenty of households will hold back from making a purchase. That’s why launching an electric vehicle subscription service could be a great business idea.

For example, EV car subscription service Onto provides an accessible, easy and affordable car-as-a-service model and has gone from strength to strength, raising over $245 million in Series B funding since it was founded in 2017.

Production or installation of charging points

You could focus your business on the production of EV charging ports, rather than on the EVs themselves. The more EVs on the road, the higher the demand will be for charging ports. For example, Heliox has supplied over 300,000 high power charge sessions, and powers the UK’s largest electrical bus station in Glasgow while continuing to expand across Europe.

Michael Coljin, CEO of Heliox, argues that there is currently huge demand for EVs, making the prospect of starting a related business highly attractive. He said “Entrepreneurs can identify gaps in the market by looking at how their services can cater to consumer and B2B issues. Once a gap has been identified, test and validate your solution/product considering both mobility and energy. While the space continues to become more and more competitive, there is still room for new businesses to bring ease and access across the EV value chain.

Electric vehicle production

We’re not all cut out to take on Elon Musk, but if you fancy yourself a hand at manufacturing EVs, you could be creating a very lucrative business.

One of the biggest success stories in this industry is UK-based company Arrival. The developer of eco-friendly vans and buses raised $118m in 2020, raising its total investment to $629m with a valuation of over $5.4bn. Global logistics company UPS has ordered 10,000 Arrival vans already.

Tom Elvidge, Executive Vice President of Vehicle Platforms at Arrival, offered this advice to anyone looking to enter into the sector:

“A good place for entrant entrepreneurs to start would be on home turf, leveraging their local knowledge and unique insights to tackle an issue that might be found on their own doorstep. Mobility problems tend to vary city by city, but the greatest ideas are ones that can then be scaled or adapted globally.”

Parts, accessories and services

As the EV market continues to expand, another new area set to grow is EV auto parts and accessories production.

Whilst many EV car manufacturers make their parts in house, innovative startups are looking to provide ancillary products such as batteries and EV-related apps. This area requires significantly less backing to get started than EV car production, and offers opportunities to those with automotive know-how who are looking to take advantage of the green revolution.

Companies such as UK startup EO are already “charging” ahead in this area with the world’s smallest smart home charger. This allows you to monitor the energy usage and access your EV charger via an app.

Apps that help EV drivers find the nearest charge point or EV mechanic could also have huge growth potential.

Scrappage services for old vehicles

The take-up of new electric vehicles will inevitably present UK consumers with some tough choices to make over when, and how, to get rid of their old diesel or petrol cars. As the 2030 deadline to phase out all non-electric vehicles edges closer, there is going to be a bumper time for businesses that can offer scrappage services for older vehicles.

Done correctly, there's plenty of opportunity here for creating a business with its own sustainable credentials. From 2016 onward, the UK government set a target that 95% of a car's weight should be recycled. Plenty of parts can be included, such as old catalytic converters and car batteries, and everything from rare metals to aluminium and steel can be stripped from an old car for a tidy profit.

If you want to start an entire recycling centre for old cars, it's an ambitious undertaking – for one thing, you must acquire an Authorised Treatment Facilities (ATF) license. There are around 1,500 ATFs in the UK, currently. As well as requiring a large amount of space, there is highly specialised machinery needed for the safe, approved scrappage of a petrol or diesel car.

There are some simpler business opportunities available, too. Consumers looking to scrap or trade in their old vehicles can easily become confused by the various options available to them, and the prices they may get for selling a car for scrap versus trading in for an EV. An alternative new business idea could be to offer a comparison tool or website that allows car owners to easily see the best value option for getting rid of their petrol or diesel car.

Vegan and plant-based food

In 2022, this may no longer feel like such a revolutionary business idea – but it is a reliable one with huge potential for further profit growth.

The number of vegans in the UK has increased by 40% over the past 12 months, and with over 13 million Brits predicted to be meat-free by the beginning of 2022, there is a lot of space for your startup to capitalise on this growing trend.

You need only look at the success of vegan food subscription service allplants to see the potential here. Founded in 2016, allplants recently received £38m in Series B funding to continue its growth – the biggest ever funding round by any plant-based food company in Europe.

Discussing his predictions for the plant-based food industry, allplants founder Jonathan Petrides said “Plant-curious people are now a mass market mainstream movement, and growing fast globally. In the near-term, we are already starting to see meat become an afterthought. Expect to see more and more food brands, restaurants and delivery concepts prioritising plants over meat, as plant-based items will continue to take centre stage on menus across the globe.”

Expect to see more and more food brands, restaurants and delivery concepts prioritising plants over meat, as plant-based will continue to take centre stage on menus across the globe.

The great thing about vegan food is that the possibilities are almost endless. More and more consumers are willing to try plant-based alternatives to meat, and the science behind these products continues to evolve. Your own business could soon be part of this fast-moving market.

Business ideas to consider

Launch a vegan restaurant or food stand

What might have seemed niche a few years ago will become the norm from now on. Vegan restaurants and food stands are here to stay, and there is tremendous growth potential in this area. There’s plenty of room for new businesses, and you could enter the space by adding a vegan twist to a particular cuisine – from a plant-based barbecue joint to a vegan Thai food stand.

There are plenty of success stories to emulate. Take Vurger Co, listed as one of our Startups 100 2021 top businesses in the UK. The plant-based burger joint has grown massively in recent years, opening up restaurants in Brighton and across London since 2016.

Develop a plant-based meat alternative

The research and development of plant-based meat continues to be a boom industry for entrepreneurs with the right background and resources.

The overheads can be high, and the research can take time to bear fruit – but the payoff can be huge. Meat-free brand THIS™ is targeting £20 million of annual revenue in 2022, and is investing further into its innovation teams of food scientists and food technologists, who are moving to a brand new site for R&D in May this year.

Final thoughts

There are countless other business opportunities in this sector – we haven’t even touched on green tech, which is an incredibly fascinating area that combines environmental sciences with technology to reduce carbon emissions.

The fact is, 2022 is an important year for the UK and its drive to start pushing to net-zero. The government has a lot to prove, and small businesses across the country must note that investors are focusing more on ESG (environmental, social and corporate governance) when assessing startups and growth opportunities.

If businesses aren’t demonstrating sustainable values in their business models, then they are going to find it even harder to receive funding, and won’t reap the benefits of the government’s green business rate relief from 2023.

Building a business in this sector is an exciting opportunity full of potential and financial backing. Don’t be put off by the science behind clean/green tech and EVs, as eco consultancy and vegan products are also brilliant business offerings.

Do your research, know your market and understand the risks – you’ll be smashing it in no time!

Ross has been writing for Startups since 2021, specialising in telephone systems, digital marketing, payroll, and sustainable business. He also runs the successful entrepreneur section of the website.

Having graduated with a Masters in Journalism, Ross went on to write for Conde Nast Traveller and the NME, before moving in to the world of business journalism.

Ross has been involved in startups from a young age, and has a keen eye for exciting, innovative new businesses. Follow him on his Twitter - @startupsross for helpful business tips.

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