Business Model

Companies are increasingly changing the fundamentals of their business models to become more sustainable. In contrast to the traditional take-make-waste model of consumption, companies with a sustainable business model work to reduce dependencies on natural resources and shift to a borrow-use-return approach of industrial production and consumption. A sustainable business model aims to future-proof a company by innovating to address risks and leverage opportunities in the design of core products and services.

Being sustainability-driven is essential to remain competitive in an increasingly globalized marketplace. Research shows that strategic sustainability broadens the approach to organizational and technological innovation, enabling companies to increase competitiveness and profitability over the long-term. Strategic sustainability goes beyond regulatory compliance and eco-efficiency to fully integrate sustainability principles with a company’s vision and goals.

In a sustainable business model, the capacity to focus on long-term planning, visionary leadership, and process improvement is cultivated throughout the organization. The ability to anticipate and avoid problems before they happen, rather than responding to them reactively, is highly valued. This model is based on systems thinking: recognizing that changes in one part of a system affect changes in other areas.

Uncovering business impacts that contribute to environmental, social, and economic problems requires safe spaces for open and honest discussions. Resolving negative impacts and challenging circumstances often requires ingenuity and collaboration. Building a system for Identifying and dealing with these business impacts and broad or deep market risks makes it possible to uncover opportunities. Encouraging adaption and change to meet market conditions and evolving social norms while remaining viable cultivates innovation. It challenges employees to find new ways and new products that lead to competitive advantage. It activates creativity around new business models that make it possible to enter new and emerging markets.

Because sustainability encompasses many complex and challenging topics, sustainability work often gives insight into new ways of approaching problem solving. For example, stakeholder engagement and trust that evolves from transparency can enable coopetition (or cooperative competition) previously thought impossible to solve industry problems that cannot be solved by one business alone.

What will I learn in this section?

The topics covered in this section will help you understand the value of a sustainable business model and how it can uncover new opportunities for innovation and competitive advantage in changing and emerging markets. Understanding risks associated with several of the topics covered in this section may reveal opportunities previously hidden from view.