Sustainability Transition and Business Models

Sustainability Transition, Circularity, and Business Model Innovation

• Sustainability transition, circularity, and business model innovation represent essential frameworks for fostering economic growth while conserving resources, enhancing environmental integrity, and promoting social equity.s.
• A business model describes how an organization creates, delivers, and captures value. It's a conceptual tool that uses objects, concepts, and their relationships to express the firm's logic.
• The business model considers the value provided to customers, how it's done, and the financial consequences.

The Business Model Canvas

• The Business Model Canvas visually represents key elements of a business model.
• It contains components including Key Partners, Key Activities, Value Proposition, Customer Relationships, Channels, Customer Segments, Costs, Key Resources, and Revenue Streams.

Sustainable Business Models

• Sustainable business models aim to enhance positive impacts or diminish negative impacts on the environment and society.
• They consider system-level impacts, and focus on the level of individual companies and sometimes networks.

Sustainable Business Models (2)

• Sustainable business models have a wider scope, emphasizing industries and society at large, focusing on solving societal needs through sustainable production and consumption systems.
• They go beyond just a business-centric view and consider system-level impacts.

Business Model Innovation Driven by Sustainability Transition

• A "spiral framework" connects business models to sustainability transitions, moving across macro/meso/micro levels and over time.
• The framework considers current and anticipated system conditions (boundary conditions), connecting business models to sustainability transitions.

Three Illustrations of Business Model Driven by Sustainability Transitions

• Illustrations of business models driven by sustainability transitions include circular business models, platform business models, and service-oriented business models.
• Examples include Kalundborg Symbiosis, Turo, and Philips' "Pay-per-lux" model.

8 Principles of Designing Business Models for Sustainability Transitions

• These principles include Systemic thinking and strategic vision, cross-sector collaboration, innovation ecosystems, long-term financing, policy engagement, societal engagement, adaptive leadership, and sustainability metrics.

Circular Business Model Innovation as Game Changer

• Circular and sustainable business models take a holistic perspective including society and the natural environment as stakeholders.
• Focusing on circular business models centers the business purpose on circular economy issues and uses impact measurement.
• Circular Business Models aim to bring together desirability, feasibility, and viability value proposition, value creation/delivery, and value capture mechanisms.

Circular Business Model Canvas

• The Circular Business Model Canvas is a tool that depicts the circular business model conceptually.
• It includes desirability, feasibility, and profitability.
• Key areas for consideration include key stakeholders, activities, people, resources, and revenue.

Circular Business Model "Business Cases"

• Circular business cases focus on resource conservation, cost reduction, sales and revenue, risk reduction, and brand value.
• Examples include product and service branding, lower energy/maintenance costs, environmentally- and socially-superior products, and hedging against price shocks.

Slowing the Loop, Sufficiency, and Regeneration

• The model emphasizes flourishing, net-positive outcomes, sufficiency, circularity, net-zero/renewable resource flows, and efficiency.

Sufficiency vs. Regenerative Business Models

• Sufficiency models moderate resource consumption, focusing on customer needs.
• Regenerative models focus on planetary health and societal well-being, delivering value at multiple stakeholder levels, with regenerative leadership, co-creative partnerships, and capturing value through multi-capital accounting.

Collaborative Business Models and Circular Ecosystems

• Collaboration is vital for implementing sustainability initiatives/circularity.
• Circular ecosystems encompass interacting entities, with a shared purpose and value proposition.
• Collaborative business model innovation examines organizational boundaries and the interactions between businesses, suppliers, partners, and other stakeholders.

An Example in the Car Industry

• This example demonstrates resource efficiency and regeneration within the car industry; it details maximizing use capacity, redesigning for multiple functions, designing for easy disassembly/reassembly, and incorporating renewable energy.