How To Start an Eco-Friendly Business in 2026

As consumers seek to support brands that share their environmental values, plenty of entrepreneurs want to know how to start an eco-friendly business.

The 2025 Conscious Consumers Report says that nearly 76% of consumers say they want to support sustainable brands. And in a McKinsey study, about 39% of global consumers said in 2025 that environmental impact is an “extremely” or “very” important factor in their buying decisions—almost double the 20% who said the same in 2020.

Learn more about what an eco-friendly small business entails, see examples of green business models, and get tips for starting your own company with sustainable practices and products.

What is an eco-friendly business?

Eco-friendly business ideas start with the goal of reducing harm to the environment. These kinds of businesses create sustainable products to sell. That can include using renewable or biodegradable materials, recycling packaging, reducing carbon emissions during production, and avoiding toxic chemicals. It might also include replacing components to extend a product’s life cycle, offering rentals instead of purchases, making items to order, and more.

Examples of eco-friendly products include:

• Refillable beauty goods

• Furniture that can be repaired or expanded with components

• Refurbished electronics

• Phone cases made of renewable and biodegradable bamboo

• Vintage fashion

• Jewelry crafted from recycled gold

• Subscription clothing rentals

• Print-on-demand services

• Packaging made of natural materials

• Plastic-free laundry detergent sheets

• Pet treats manufactured with food waste

• Yoga mats made from algae

• Compostable grocery bags

• Sparkling water capsules that are returned, cleaned, and reused

How to start an eco-friendly business

• Bake sustainability into your business idea from day one
• Ensure your idea performs well and is affordable
• Source mindfully and use local supply chains
• Design your product for longevity

Compared with traditional businesses, starting eco-friendly companies can involve more complex decisions. Here are several tips from founders of eco-friendly brands:

Bake sustainability into your business idea from day one

When you incorporate eco-friendly practices from day one, they are woven into your company culture. They inform your product idea, sustainable business model, supplier selection, pricing strategy, packaging and shipping choices, marketing, and more.

Product sustainability was the driving force behind Sabai Design, a furniture company that Phantila Phataraprasit co-founded out of her disappointment as an eco-conscious consumer shopping for a couch.

Sabai avoids petroleum‑based foams and plastics, instead stuffing cushions with rubberized coconut fiber and upholstering with materials like a synthetic cactus-based leather. Phantila says she knew before she was open for business that it would take extra effort to find the right suppliers and manufacturers.

“It’s really important to think about sustainability starting from the design phase itself,” Phantila says on Shopify Masters.

Similarly, Morgan Cros founded the umbrella brand Original Duckhead in part to keep cheap products out of landfills. She launched with a mission to upend the throwaway culture in the umbrella industry, and this informed every decision: the design of the umbrellas, the use of 100% recycled materials, pricing, and more. 

Morgan recommends founders build eco-friendly business practices from the start when possible, because it’s easier than trying to backtrack later, she says on Shopify Masters.

Ensure your idea performs well and is affordable

A good and sustainable concept isn’t necessarily enough to build a business. The product has to work, and so does the math.

Lauren Gropper of Repurpose—which has diverted 727 million pieces of plastic from oceans and landfills by selling compostable plates, cups, trash bags, and toilet paper—evaluates every product idea through three lenses.

“It’s a Venn diagram of performance, sustainability, and affordability,” Lauren says on Shopify Masters. “Those three things have to be there in order for us to put something out into the world with the Repurpose brand on it.” 

If an eco-friendly product is too expensive for the mass market or fails to perform, it won’t succeed. It’s why Repurpose hasn’t made products like sandwich bags. Customers ask for them, but current compostable material options are too porous for food storage. 

Research options and pricing for sustainable materials, suppliers, manufacturing processes, and other details. This will help you determine whether you can make your product both affordable for customers and profitable for your business.

Source mindfully and use local supply chains

Entrepreneur Inder Bedi knew he wanted to make products from discarded materials, but it took some digging to find a good source.

“I started slowly exploring what sustainability could look like in the future,” Inder says on Shopify Masters. “And I had this idea: Could we create things with waste materials that already exist?” 

While searching for waste materials in junkyards, Inder came across used Air Canada leather seats and seat belts. He used these to create duffel bags made with upcycled materials. His company, Bedi Studios, branched out into premium outerwear and accessories, all made from landfill material or recycled fishing nets.

In addition to making products from waste materials, Inder decided to manufacture in his local community of Montreal rather than overseas to reduce the company’s carbon footprint.

Sabai Design took a similar tack, opting for a domestic eco-friendly supply chain. This reduced the company’s environmental impact and saved money by shipping items directly from the manufacturer to the consumer. It also insulated the business from supply chain delays during the peak COVID era.

Keep eco-friendly sourcing in mind for packaging and shipping, too. Consider eco-friendly packaging like Hero Packaging’s paper mailers made from 100% post-consumer recycled paper. Lighter packaging also cuts waste while lowering shipping costs. You can make those shipments carbon-neutral by partnering with entities like the Shopify Planet app, which funds companies that remove carbon dioxide from the atmosphere and store it. 

Design your product for longevity

Making an eco-friendly product is one thing; making one that lasts is another. Durable items are less likely to wind up in the trash, reducing waste and the need to manufacture new goods.

To combat the 12 million tons of furniture waste created annually, 80% of which goes to landfills, Sabai Design created its “Repair, Don’t Replace” program. Customers can buy individual components like a single couch arm, chair leg, or slipcover, rather than replace a whole piece of furniture. Customers can also add or remove components to expand or modify an existing piece, avoiding the need to purchase new furniture. Sabai also operates a resale platform for customers to sell used or returned items.

At Bedi Studios, the company’s “Second Life” program gives customers an incentive to help extend product life cycles. Customers can trade in Bedi apparel they no longer want in exchange for store credit. The company then refurbishes the items if necessary and resells them at a lower price.

Robust products also open new sales strategies. You might consider a rental option like Bebello’s baby bottle washers. Some companies allow shoppers to send back items for reuse, as Aerflo does with its returnable sparkling water capsules.