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Reports 18 Nov 2015

Model Behavior II

Strategies to Rewire Business

By Lindsay Clinton and Rochelle March

Many of the companies that are flourishing financially today are inherently unsustainable. Despite laudable efforts to make their processes or products more sustainable, no amount of renewable energy sourcing or green product engineering, for example, can change that.

When an inherently unsustainable company experiences continued commercial success, thinking about a different, more sustainable model may seem unlikely or unrealistic. However, dwindling security of supply, rising commodity prices, changing consumer demographics and increasing competitive pressure make it prescient to consider business models that will be less volatile, less resource-intensive and more responsive to the user of the future.

A year after SustainAbility published its most popular report, Model Behavior: 20 Business Model Innovations for Sustainability, we are pleased to share our latest research on this topic. Model Behavior II: Strategies to Rewire Business offers guidance to large companies and innovators within those organizations to harness the power of business model innovation that creates a more sustainable future.

Through extensive research and interviews, Model Behavior II outlines:

  • Key forces influencing the need for and emergence of business model innovation for sustainability
  • The pivotal role of company culture to foster innovation
  • Distinct actions that internal innovators can undertake to drive sustainable business model innovation
  • Case studies of large, multinational companies that demonstrate how ambitious sustainability innovators have developed new business models with more sustainable outcomes:
    • Fibria, the Brazilian pulp producer, changed its executive team’s mindset about how to use their forest assets, and is diversifying to become a sustainable land and forest steward
    • Novelis, the rolled aluminum company owned by Indian conglomerate Aditya Birla Group, is shifting to a closed loop manufacturing model using 80% recycled aluminum
    • Starbucks has pursued green building at scale which has remarkably translated into new value creation for customers, suppliers, employees and peer retailers
    • Syngenta, the Swiss agribusiness, is transitioning to a farmer-focused model that creates an alternative marketplace for farmers to gain more financial value for their harvest

Although some may argue that business model innovation is unlikely to arise from Fortune 500 companies, SustainAbility’s report demonstrates that large companies can in fact undertake transformative shifts to their business models that will set them on a more sustainable path. Model Behavior II provides internal innovators, like chief sustainability officers and their team members, with perspective on how to approach business model innovation for sustainability and gives them the tools to drive that change.

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