The sustainable shift: 6 ways to generate positive impact.
Climate change, pandemics, and conflicts have become the new normal, therefore it is high time for companies to hit the reset button. In this blog, we will show you how businesses can play a contributing role in fixing these big problems. We will dive into the heart of sustainability and reveal how traditional business models are changing. This is your sneak peek into six transformative shifts that your business too can make to create amazing value for your customers and other stakeholders while taking care of the bottom line. On top of that we share the stories of companies that are already successfully making these shifts, proving that it is possible to be both profitable and sustainable. Are you ready to see how your business can be part of this fundamental change in how value is created, delivered, and captured? Read on to find out.
Crisis overload! Where do we go?
We are in the middle of multiple crises: a global pandemic, economic downturns, climate change, energy woes, and a biodiversity collapse. Add to that the strain of food shortages, political turmoil, and conflicts across the globe and it is clear we have been pushing the limits, and not just in positive ways that benefit the planet or the people on it.
Crossing planetary boundaries.
This diagram by the Azote for Stockholm Resilience Centre from the Stockholm University presents us with the Planetary Boundaries concept. It highlights a visual map of our planet’s health over time, highlighting the limits we must respect to ensure a stable Earth. According to this diagram in 2009, we were already reaching a critical stage, having breached three out of the seven assessed ecological thresholds, such as climate change and loss of biodiversity. Fast forward to 2015, and the situation had escalated with one additional boundary crossed. By 2023, the diagram paints an even gloomier picture: out of nine researched boundaries, six had been exceeded, marking a distressing trend towards environmental instability. This evolving framework is a call to action, urging us to safeguard our planet’s future by preserving its delicate ecosystems. Each passing year is a reminder that our actions have weight, and it is up to all of us to tip the scales back for a stable planet.
Do you want to contribute to the solution instead of the problem? Let’s flip the narrative and break boundaries for positive change.
Act now and don’t regret it later.
This deep-rooted crisis has been caused by human activity and stems from our continuous chase for economic growth. Ever since the start of the Industrial Revolution, over two centuries ago, the mantra has been “growth at any cost.” And the price has been steep: hazardous work environments, environmental pollution, declining local and global ecosystems, and exhaustion of resources. What we are seeing now is not just another crisis, it is a genuine existential crisis. If we do not act now, we will not survive as a species in the long run.
Uncovering the hidden costs of business.
At first, businesses and regulators were not fully aware of the hidden costs of their operations. But then, economists put a spotlight on these hidden costs, labelling them as externalities: the unintended side effects of business activities on others. By the 1970s, the world started waking up to the need for environmental safeguards, which lead to the birth of modern rules and regulations aimed at controlling business-related harm. Nowadays, being in business means being all about aligning with new Environmental, Social and Governance (ESG) standards, especially in Europe with its Corporate Sustainability Reporting Directive (CSRD).
However, meeting the latest rules and trimming down carbon emissions is not all it takes to solve the issue; it is merely the beginning. These regulatory measures primarily serve as corrective actions for past missteps. When businesses set their sights beyond compliance, an opportunity to generate extraordinary value presents itself. Such a proactive approach truly contributes to the greater good. By innovating and integrating sustainable practices into the core of their operations, companies can create a ripple effect of benefits. These practices include enhancing customer loyalty, opening new markets, and driving efficiencies that positively impact the bottom line. More importantly, this approach positions businesses as leaders of the sustainability movement, contributing to a healthier planet and society. In doing so, they go beyond serving their immediate stakeholders and take on a crucial role in shaping a sustainable future for the next generation(s). This is how businesses can truly make a difference, turning challenges into opportunities for growth, innovation, and positive impact.
Want to get started with impact? Find out how in our playbook.
From harm to harmony.
It’s time for a big shift in mindset and actions. Businesses, once contributors to the planet’s challenges, hold the potential for monumental positive change. This transformation requires moving from unintentional harm to intentional good. Sticking to the old ways will not help. We are at a point where innovation and new ways of value creation are crucial to prevent pushing our planet beyond its breaking point. We need to design, validate, and build new business models that significantly reduce our environmental footprint and generate substantial positive impact, also called the handprint. This shift is more than just beneficial for the environment and allows you and your business to continuously renew, become agile and resilient, and sustain value creation for all your stakeholders.
The sustainable business canvas.
At Business Models Inc., we have introduced this mindset through the business model canvas, by adding two additional building blocks: one visualizes the company’s footprint, the other its handprint. The handprint demonstrates how a business can generate positive socio-environmental effects and have a truly positive impact on people, planet, and profit: the Triple Bottom Line. By introducing environmental costs/benefits and societal costs/benefits to the canvas, we encourage you to think about the negative side effects that your activities (can) have outside of your business and what positive impact you can create.
Break out of the silo mindset and acknowledge that your business is part of something bigger. Need help?
6 business model shifts for positive change.
Want to get started but don’t know how? In our book, Business Model Shifts, we introduce six transformative shifts that are happening in the business landscape right now and that aim at fixing the flaws of the current economic system. Not only do these six shifts show you that you have to create new value for your customers, but they also show you this can go hand in hand with lowering your footprint and building your handprint. These shifts can lead to an amazing and profitable business and pave the way for a more sustainable future for our planet.
Explore the 6 shifts below:
From products to services.
The Services shift is about service-oriented business models that focus on getting an important job done for the customer. It addresses the risk of bringing products into the market that are useless and/or quickly lose their relevance over time.
From shareholder to stakeholder.
The Stakeholder shift is about creating value for all stakeholders in the broader ecosystem and business model context. It addresses the risk of a narrow focus on shareholders and financial returns.
From physical to digital.
The Digital shift is about an always-on business model that is connected to customers and their needs. It addresses the lack of attention and connection as a result of fragmented online and offline business operations.
From pipeline to platform.
The Platform shift describes a way of directly connecting people and businesses and facilitating value exchange in an orderly way. It addresses the risk of a disintegrated ecosystem of businesses and an uneven value exchange.
From incremental to exponential.
The Exponential shift is about exponential thinking and realizing 10x growth and impact, focused on solving the big challenges of this world. It addresses the ineffectiveness of conventional businesses in solving big problems.
From linear to circular.
The Circular shift is about restorative, regenerative, and circular value creation. It addresses the take-make-dispose model that is exhausting our natural resources.
Once you see your business as a system that is interconnected with a variety of a stakeholders, this eliminates the need for trade-offs. Of course, creating value for all stakeholders at once demands effort, conscious and consistent oversight, dedication, and commitment. However, these shifts can ensure that your business not only thrives but also positively contributes to the broader ecosystem it operates in, creating value for people and planet.
Want to get your hands on a copy of Business Model Shifts?
Are you ready to make better strategic choices instead of trade-offs? Find your business’s purpose with the help of our impact playbook.
9 businesses shaping the future.
Throughout history, there have been great examples of companies that flipped their ways of creating, delivering, and capturing value. They did so by considering its externalities, letting go of the silo mindset, and collaborating with all their stakeholders. It is important to realize that these companies actively chose to pursue positive (side) effects across their entire value chain. Shifting to a business with a Triple Bottom Line is a conscious decision. These leaders look at their business with fresh eyes and ask the question: “Where is value next for all stakeholders?”
Starbucks.
Starbucks redefined its coffee experience by emphasizing on ethical sourcing, environmental stewardship, and community engagement. Their commitment to sustainability and fair-trade practices showcases a model that seamlessly blends quality coffee and social responsibility.
Interface.
With its commitment to sustainability and the circular economy, Interface is setting a precedent in the flooring industry. By introducing innovative, eco-friendly materials and production processes, they want to drastically reduce their carbon footprint and pave the way for a model that effortlessly combines design excellence with environmental stewardship.
Nike.
Nike champions innovation and sustainability in the global apparel industry and focuses on creating high-performance products while reducing their environmental impact. Their approach integrates cutting-edge design with initiatives aimed at empowering communities. The result: a dynamic balance between driving athletic excellence and fostering social change.
Brambles.
Brambles is taking the lead in sustainable and efficient supply chain logistics. Their model emphasizes the sharing and reuse of pallets and containers, reducing waste and environmental impact while enhancing the flow of goods across industries globally.
Radius Recycling.
At Radius Recycling they revolutionize waste management by transforming recyclable materials into valuable resources. Their innovative approach prioritizes efficiency and environmental sustainability while significantly reducing landfill waste and contributing to a circular economy.
Tony Chocolonely.
Tony Chocolonely was the first to take a firm ethical stance in the chocolate industry by actively fighting against slavery and exploitation on cocoa farms. Through sustainable practices and fair profit distribution, they strive to revolutionize the market with their high-quality, morally conscious chocolate.
Ben & Jerry’s.
Ben & Jerry’s combines indulgent ice cream with a mission for social justice. The company embraces both fair trade practices and environmental sustainability. Their commitment to social issues, from climate change to equality, is an equally integral part of their brand identity as their unique ice cream flavours.
Patagonia.
Within the outdoor apparel industry, Patagonia stands at the forefront of environmental activism. They are dedicated to preserving natural landscapes and promoting sustainable practices. Their ethos of responsibility extends to producing durable goods, advocating for conservation, and inspiring customers to reflect on their environmental impact.
Alphabet.
Google’s parent company Alphabet redefines innovation with a focus on technology that benefits our society and the planet we live on. Their diverse portfolio spans from internet services to cutting-edge research in health and sustainability with the aim to solve global challenges while moving forward with responsible business practices.
Want to become a leader in sustainable practices? Let’s explore how!
From past problems to future solutions.
The shift towards sustainability is essential for the future of businesses worldwide. The six shifts we have explored provide a roadmap for moving from problem makers to solution creators. These strategies, proven by leading companies in their various industries, show us that profitability and sustainability can effectively co-exist. It’s up to you now! Take these learnings and start your own journey to reverse the harm done in our past. This is your chance to thrive and lead by example. Let’s take this step together and build a sustainable future for our planet and the generations to come.
Want to start your impact journey? Discover our helpful tips in our impact playbook.
Originally published at https://www.businessmodelsinc.com.
