Despite bold efforts to make companies’ processes and products more sustainable, many businesses that flourish today are inherently unsustainable. Companies must fundamentally change their modus operandi to survive in a future of resource scarcity and climate change — no amount of renewable energy sourcing or green product engineering, for example, can accommodate these conditions.
These are the premises of a new report released by SustainAbility in partnership with Novelis and Starbucks, Model Behavior II: Strategies to Rewire Business, a follow-up to its successful 2014 report on business model innovation. The latest research asks the broad question: how can large companies innovate their own business models and, in turn, accelerate the transition to a sustainable economy?
As a starting point to answer this question, the report identifies key forces influencing business model innovation for sustainability, discusses the pivotal role of company culture to foster innovation, and provides distinct actions that internal innovators can undertake to advance more sustainable business models.
SustainAbility sets the stage by discussing Novelis’ 2011 adoption of an almost entirely closed-loop manufacturing system, in which 80 percent of aluminum it uses to make products would be recycled material. The decision marked the company’s aspiration to abandon a model focused on natural resource extraction and disposal.
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The report draws upon four in-depth case studies featuring large, multinational companies, providing perspective on how to approach business model innovation and offering tools to drive the conversation forward. Highlights from the featured companies include:
- Fibria’s diversification strategy to use thousands of its land assets (instead of selling them) for sustainable community development — including equipping them with houses, schools and hospitals. For areas that are not ideal for forest growing, Fibria leveraged partnerships to install wind turbines, and is also exploring possibilities for solar energy production on these lands. The company is also partnering to develop new commercially viable biofuels from wood.
- Novelis’ achievement of 50 percent recycled aluminum since it launched its goal for an 80 percent closed-loop system in 2011. This bold shift required restructuring internal incentives, designing with recycled alloys, investing in new infrastructure, and targeting base of the pyramid scrap collectors.
- Intrapreneurs at Starbucks proposing green building as a method of brand differentiation, and the company’s subsequent pursuit of LEED-certified stores and retrofits of existing stores around the world.
- Syngenta's creation of an alternative marketplace model for suppliers, building a strong link between growers and its downstream value chain. The company provides traceability software that connects buyers to the original source of the product, ensuring a solid customer base and providing security for farmers.