A new report published today by WWF-UK highlights the actions that large firms have taken to transform their business models towards sustainability.
The Green Game-Changers report, produced by Verdantix, shows that large firms are increasingly adopting and scaling up sustainability innovations and reaping substantial rewards for themselves and their customers.
These new business approaches not only contribute to the green economy, but also show what can be achieved by decoupling business growth from increasing environmental damage, even generating restorative or net-positive social and environmental impacts.
The report, which looks at large-scale sustainability initiatives in companies such as Hertz, Phillips, Kingfisher, DONG Energy, BASF and PepsiCo, finds that sustainable business innovations are often driven by smaller, disruptive business models creating new markets and altering existing ones.
Dax Lovegrove, head of business and industry, WWF-UK, said: “Scalability clearly remains crucial for true business innovation, but this reports shows that, as small-scale green innovators with novel business models are gaining traction and market share across the world, large firms need to reconsider business models to ensure they don’t get left behind.
“Enlightened business are learning that, with increasing pressure on natural resources and changing patterns of consumption, that they need to adopt ‘disruptive’ business models – or be disrupted. There are huge opportunities out there for businesses that are willing to change, as well as threats for the ones that fail to adapt.”
Key recommendations in the report for firms starting out on the road to sustainable business models include:
• Monitor emerging models. Firms in all markets should consider how companies in their industry are delivering value and monitor shifts and new players in the market. Companies like Kingfisher and Hertz have been prompted to move towards business models based on sharing or renting goods and services by companies like Zilok and Zipcar.
• Don’t stop at sustainable product innovation. Sustainable products require business models that ensure a viable business case that captures all the value provided. Phillips and DONG energy have both created new service models to fully capture the benefit for themselves and customers of sustainability innovations.
• Get buy-in from the top. Internal leadership support is crucial for sustainable business model innovations to achieve scale. Umicore credit their business’s transformation to a consistent vision from the top of the firm backing increased recycling and ‘urban mining’.
• Reassess the value chain. Truly sustainable business models look outside a firm’s four walls to the impacts that the company has in the value chain, both upstream and downstream. PepsiCo and BASF have both had early successes in creating restorative models that have a net-positive impact on the environment.
• Collaborate externally. The report highlights the importance of developing new business propositions and shifting towards sustainable models and shows that this cannot be done without engaging with the market and collaborating with external partners.