How to design a more sustainable business model
In today’s world, businesses shouldn’t only focus on profit and instead should take the health of the globe and the life that’s on it into account. Historically, this hasn’t been the case, but we’re now seeing big companies like Unilever and Patagonia hone in on these issues and making them a part of their business.
But how can other companies follow suit? What are the core tenets of a sustainable business model? Let’s take a closer look.
Paradigm shift
Sustainability is no longer a buzzword. But while many companies are trying to have a positive impact on the world, often the term ‘sustainability’ is unclear — at least from a corporate point of view.
As we see it, there are three key ingredients in a sustainable business model. The first is profit, the second is the environmental impact your business makes, and the third layer is social impact.
Here at BMI, we see that embracing these principles involves a shift. Companies need to move from a linear to circular business model. A circular business model seeks to increase the lifespan of any product or service by making it last longer, reusable, or even usable in a different way.
Going above & beyond
Accelerating consumption forces companies to look at how they create products. Increasingly, doesn’t just mean not contributing to the wider problem; it involves being part of the solution — encouraging the right consumer behaviours. We see this more and more in the materials many manufacturers use to create everything from toys to clothing to toilet paper.
Beyond just production, both businesses and consumers are taking the actions of a company’s supply chain as part of their wider sustainability — and ultimately purchasing — considerations. Logistics plays a huge role here — the reduction of mileage, carbon emissions, and transit times are all being factored in.
This is a direct reflection of our own individual behaviours during the pandemic. Continued remote working will further reduce vehicle-related pollution. And with the adoption of videoconferencing, it’s become clear that business travel is no longer as crucial as it once was considered.
Companies have to be aware of these changes and be willing to change to meet them — not just focusing on profit, but the people that generate it, and their needs and wants. And as more people reflect on their consumption habits — with the pandemic being a massive wake up call — they are starting to seek out sustainable alternatives.
If you build it they will come
Increasingly, sustainability and profitability can go hand-in-hand. Companies are recognising this and pivoting toward more sustainable models and practices. As a result, those which aren’t able to keep pace with this change are going to find their market share whittled down as consumers prove again and again that they want to buy from businesses making a positive impact on this planet.
We pride ourselves in helping existing and new businesses alike in developing sustainable strategies that make a positive impact not only on their bottom line but also on the planet and its inhabitants. Get in touch today if you’d like to find out more.
Originally published at https://www.businessmodelsinc.com on June 2, 2021.
