You would think that the benefits of a sustainable business model are largely limited to those that are societal and environmental in nature, in addition to the widespread enhancement of your firm’s reputation.
However, studies have also revealed the economic benefits to such a move, with 66% of global consumers apparently willing to pay more for sustainable goods. Similarly, 57% are willing to change their purchasing habits in order to reduce negative environmental impacts over time.
We’ll explore this below while asking how you can go about creating a sustainable business model.
Why Create a Sustainable Business?
Interestingly, there’s something of a gap between awareness and action when it comes to corporate sustainability, as while most businesses understand the importance of this concept, fewer have taken direct action to tackle this.
For example, it’s thought that 90% of business executives find sustainability to be important, while only 60% incorporate sustainability into their strategies. What’s more, just 25% have sustainability incorporated directly into their current business model, creating a significant gap that firms should look to bridge.
To achieve this, it’s worth reinforcing the economic benefits of a sustainable business model, especially from the perspective of reduced costs.
More specifically, the use of sustainable practices and materials can actively reduce operational costs in the modern age, and not only due to governmental incentives and discounts in place across the globe.
Additionally, sustainable practices are focused on conserving environmental and financial resources, from the process of switching off unnecessary lights to insulation walls and installing geothermal heating and cooling systems. Sure, some of these measures may cost a little more to install in the short-term, but they’ll more than recoup your investment over time.
From another perspective, it may be argued that measures such as installing an advanced cooling or heating system may also create a more comfortable working environment.
This may improve engagement and productivity levels over time, which in turn boosts the workload and profitability of each individual employee.
How to Create a Sustainable Business Model
Once you understand the importance of creating a sustainable business model, the next step is to determine how to bring your commercial vision to life. So, here are a select few ideas to keep in mind:
#1. Move from Being Reactive to Proactive
Many of the market leading sustainable brands (including Nike, Starbucks and Coca-Cola) have built their sustainability efforts in response to backlash or a crisis.
However, each has subsequently evolved to adopt a much more proactive approach to sustainability, learning the lessons of previous failures and leveraging these to put sustainability at the centre of their commercial operations.
In the case of Nike, for example, the firm faced both boycotts and anger for labour practices in the third-world that were thought to be abusive. Having embraced sustainability to turn the tide, the brand then made sustainability a core strategic objective before becoming a pioneer in transparency and sustainability by the mid-noughties.
#2. Improve Transparency
Transparency is central to sustainable business practices, while it’s also a pre-condition for assessing and improving actionable strategies.
Quite simply, you cannot judge a brand’s sustainability credentials without transparency, which creates honest and open communication between a firm and their customers when discussing materials, pay and working conditions.
You can introduce a sustainability narrative through marketing strategies, with introducers able to discuss your business’s sustainability drive when liaising with potential customers. This can create a strong competitive edge, while ensuring that there’s greater transparency about your efforts as a whole.
Consistency is also key here, as you’ll have to remain true to your brand’s sustainability credentials or risk having consumer relations undermined across the board.
#3. Engage Your Ecosystem
Last, but not least, you’ll have to proactively engage your ecosystem as a sustainable brand, in a bid to drive greater collaboration both internally and with local partners.
This is critical if you’re to maintain efficient sustainability practices over time, while it can also create wider and more effective solutions across the board.
Remember, around 67% of executives see sustainability as an area where collaboration is necessary to succeed, so engaging your ecosystem in a proactive manner is key here.