Download as PDF, PPTX
Uploaded byFlorian Lüdeke-Freund
Sustainable Business Models for Eco-Design and Innovation - Florian Lüdeke-Freund - EcoSD Workshop 2015
The document discusses the development of sustainable business models for eco-design and innovation, emphasizing the need to align business practices with sustainability objectives. It outlines key concepts and barriers associated with sustainable business models while providing examples, such as the Riversimple car project that aims to offer eco-mobility solutions. Future research directions include theoretical integration of eco-innovation, assessment frameworks, and evaluating business modeling tools.
More Related Content
Similar to Sustainable Business Models for Eco-Design and Innovation - Florian Lüdeke-Freund - EcoSD Workshop 2015
Sustainable Business Models for Eco-Design and Innovation - Florian Lüdeke-Freund - EcoSD Workshop 2015
- 1. SUSTAINABLE BUSINESS MODELSFOR ECO-DESIGN AND INNOVATION WHERE DO WE STAND, WHERE DO WE HAVE TO GO? Dr. Florian Lüdeke-Freund, University of Hamburg EcoSD Research Workshop, 12 March 2015, Paris, France
- 3. A simple formof eco-design (?) * * Given that screens save energy with black instead of white presentations.
- 4. Eco-design meets businessmodel imitation?
- 5. Cf. Schmidt-Bleek, 2000,Factor 10 Manifesto The eco-design question How to create useful artefacts that generate as much utility (and joy) as possible, using the smallest possible amount of natural resources, including footprints, for the longest possible period of time?
- 6. Cf. Boons &Lüdeke-Freund, 2013, Business Models for Sustainable Innovation: State of the Art and Steps Towards a Research Agenda, Journal of Cleaner Production The business model question How to market eco-designs and innovations to unfold their full sustainability potential, in ways that allow users to easily adopt them and allow eco-entrepreneurs to make a business?
- 7. Hugo Spowers, 2014,Founder and Chief Engineer of Riversimple Source: http://www.bbc.com Moving to the business model level "Disruptive technology can only work if it comes with a new business model.”
- 8. SUSTAINABLE BUSINESS MODEL -CONCEPT - • Business models are “market devices” that can connect sustainability innovations and markets • Business models combine value propositions, supply chains, customer interfaces, and financial models • Major contexts for the business model & sustainability innovation nexus • Organisational innovation • Social innovation • Technological innovation Boons & Lüdeke-Freund, 2013, Business Models for Sustainable Innovation: State of the Art and Steps Towards a Research Agenda, Journal of Cleaner Production Financial Model Value Propo- sition Supply Chain Customer Interface 8
- 9. SUSTAINABLE BUSINESS MODEL -CONCEPT - • Normative requirements of “sustainable business models” 1. The value proposition provides measurable ecological and/or social value in concert with economic value. 2. The supply chain involves suppliers who take responsibility towards their own as well as the focal company’s stakeholders. 3. The customer interface motivates customers to take responsibility for their consumption as well as for the focal company’s stakeholders. 4. The financial model allows a just distribution of costs and benefits among business model stakeholders and includes ecological and social effects. Boons & Lüdeke-Freund, 2013, Business Models for Sustainable Innovation: State of the Art and Steps Towards a Research Agenda, Journal of Cleaner Production 9
- 10. SUSTAINABLE BUSINESS MODEL -WORKING DEFINITION - A “sustainable business model”, as a “business model for sustainability”, creates, delivers, and captures value for all its stakeholders, while it maintains and regenerates the capital bases of the natural, social, and economic systems it relies on. Based on Breuer & Lüdeke-Freund, 2014, Normative Innovation for Sustainable Business Models Upward, 2013, Towards an Ontology and Canvas for Strongly Sustainable Business Models Wells, 2013, Business Models for Sustainability 10
- 11. BUSINESS CASES THROUGHBUSINESS MODELS - THE GOAL - Based on Schaltegger & Burritt, 2005, Corporate Sustainability, in: Folmer et al., International Yearbook of Environmental and Resource Economics 2005/2006 Economic performance Social and / or ecological performance Extended business case potential through sustain- ability innovations and business model effects ES* ES0 ESP* ESP1 A B CF E D ESP0 11
- 12. SUSTAINABLE BUSINESS MODELINNOVATION - ARCHETYPES | EXAMPLES - • Major innovation orientations identified in the literature Bocken, Short, Rana & Evans, 2014, A Literature and Practice Review to Develop Sustainable Business Model Archetypes, Journal of Cleaner Production Organisational 1. Repurpose for society and environment 2. Develop scale-up solutions Social 3. Deliver functionality rather than ownership 4. Adopt a stewardship role 5. Encourage sufficiency Technological 6. Maximise material and energy efficiency 7. Create value from waste 8. Substitute with renewables and natural processes 12
- 13. SUSTAINABLE BUSINESS MODELINNOVATION - ARCHETYPES | EXAMPLES - • “Develop scale-up solutions” • Delivering sustainable solutions at a large scale to maximise benefits for society and the environment (e.g. franchising, licensing) • Expected effects: e.g. large-scale replacement of unsustainable solutions • “Deliver functionality rather than ownership” • Provision of services that satisfy users’ needs without having to own physical products (e.g. product-service-systems) • Expected effects: e.g. decoupling of profits and production volume • “Maximise material and energy efficiency” • Do more with fewer resources, generating less waste, emissions and pollution (e.g. lean manufacturing, cleaner production) • Expected effects: e.g. reduction of waste, emissions, or over-capacities Bocken, Short, Rana & Evans, 2014, A Literature and Practice Review to Develop Sustainable Business Model Archetypes, Journal of Cleaner Production 13
- 14. SUSTAINABLE BUSINESS MODELS -BARRIERS | EXAMPLES - • Environmental and social externalities • Capital intensity and long lead time • The power of incumbents Wüstenhagen & Boehnke, 2008, Business Models for Sustainable Energy, in: Tukker et al., Perspectives on Radical Changes to Sustainable Consumption and Production Environmental and social externalities Capital intensity and long lead time The power of incumbents Value proposition Supply chain Customer interface Financial model E.g. emphasis on private customer benefits E.g. partnerships, value networks, outsourcing E.g. leasing, contracting, after-sales services 14
- 15. SUSTAINABLE BUSINESS MODELINNOVATION - TOOLS | EXAMPLES - “Value Mapping for Sustainable Business Modelling” “Flourishing Business Canvas” “Business Innovation Kit” & “Sustainability Innovation Pack” Bocken, Short, Rana & Evans, 2013, A Value Mapping Tool for Sustainable Business Modelling http://www.flourishingbusiness.org/ Breuer & Lüdeke-Freund, 2014, Normative Innovation for Sustainable Business Models 15
- 16. SUSTAINABLE BUSINESS MODELINNOVATION - TOOLS | EXAMPLES - “Value Mapping for Sustainable Business Modelling” Bocken, Short, Rana & Evans, 2013, A Value Mapping Tool for Sustainable Business Modelling 16
- 17. SUSTAINABLE BUSINESS MODELINNOVATION - TOOLS | EXAMPLES - “Flourishing Business Canvas” http://www.flourishingbusiness.org/ 17
- 18. SUSTAINABLE BUSINESS MODELINNOVATION - TOOLS | EXAMPLES - “Business Innovation Kit” & “Sustainability Innovation Pack” Breuer & Lüdeke-Freund, 2014, Normative Innovation for Sustainable Business Models 18
- 19. A SUSTAINABLE BUSINESSMODEL IN THE MAKING - RIVERSIMPLE - Source: http://riversimple.com (pictures show technology demonstrator, not final product) Wales-based car designer RIVERSIMPLE founded by Hugo Spowers aims to bring about “mobility at zero cost to the planet” “Whole system design” + new technology + new business model + new corporate governance 19
- 20. A SUSTAINABLE BUSINESSMODEL IN THE MAKING - RIVERSIMPLE | TECHNOLOGY - • Concept car “The Hyrban” • Installed range: 220+ miles (350 km) • Top speed: 50 mph (80 km/h) • Weight: 520 kg • Number of passengers: 2 • Emissions, well-to-wheel: <31g CO2/km Source: http://www.40fires.org (pictures show technology demonstrator, not final product) 20
- 21. A SUSTAINABLE BUSINESSMODEL IN THE MAKING - RIVERSIMPLE | BUSINESS MODEL - Source: http://riversimple.com, http://www.bbc.com Financial Model • Start-up: seed / venture capital • Major revenue stream: monthly leasing fee Value Proposition • Affordable eco-mobility • Personal mobility as service • No hassle of ownership • A car that lasts Supply Chain • Distributed manufacturing network with small facilities • Sale-of-service model along supply chain • Open source approach Customer Interface • Local provision of cars owned by Riversimple • Local refuelling network • Refuelling for free “Designing a car for this business model requires us to sell performance, not just cars.” 21
- 22. A SUSTAINABLE BUSINESSMODEL IN THE MAKING - RIVERSIMPLE | GOVERNANCE - Source: http://riversimple.com 22
- 23. A SUSTAINABLE BUSINESSMODEL IN THE MAKING - RIVERSIMPLE | FINDINGS - • Managed co-development and co-evolution of a whole ecosystem • Technological artefact & infrastructure – Car & local refuelling network • Business model – Eco-mobility as an all-in service • Corporate governance – Open and stakeholder inclusive • Addressing major barriers to sustainable business models • Environmental and social externalities – How to provide zero impact mobility? → Offering eco-efficient mobility as hassle-free, all-in, fee-based service • Capital intensity and long lead time – How to finance RD&D? → Patient capital from purpose-driven seed capital investors • The power of incumbents – How to overcome path dependence of one century? → Non-exclusive, open source and network approach to create a “movement” 23 Cf. Breuer & Lüdeke-Freund, 2014, Normative Innovation for Sustainable Business Models Wüstenhagen & Boehnke, 2008, Business Models for Sustainable Energy, in: Tukker et al., Perspectives on Radical Changes to Sustainable Consumption and Production
- 24. A SUSTAINABLE BUSINESSMODEL IN THE MAKING - RIVERSIMPLE | FINDINGS - • SBMI archetypes employed in combination (amongst others) • “Maximise material and energy efficiency” → Light-weight construction, high-efficiency fuel cells and engines • “Deliver functionality rather than ownership” → Riversimple owns the car, users pay an all-in fee • “Develop scale-up solutions” → Open source approach, local, replicable production network cf. Bocken, Short, Rana & Evans, 2014, A Literature and Practice Review to Develop Sustainable Business Model Archetypes, Journal of Cleaner Production 24
- 25. WHERE DO WEHAVE TO GO? - FUTURE RESEARCH - 1. Further theoretical and conceptual integration of eco-innovation and SBM → elaboration on (dis-) similarities and overlap of both concepts 2. Understanding business models in their particular contexts → development of a contingent and context-sensitive approach 3. Assessing business models’ sustainability performance → development of frameworks and tools for business model assessment 4. Test and evaluate business modelling tools and their outcomes → identify tools that (do not) work, e.g. in longitudinal studies 25
- 26. THANK YOU! More aboutSBMs on www.SustainableBusinessModel.org 26
- 27. LITERATURE 27 Bocken, N.; Short,S.; Padmakshi, R. & Evans, S. (2013): A value mapping tool for sustainable business modelling, Corporate Governance: The International Journal of Business in Society, Vol. 13, No. 5, 482– 497. Bocken, N.; Short, S.; Rana, P. & Evans, S. (2014): A literature and practice review to develop sustainable business model archetypes, Journal of Cleaner Production, Vol. 65, 42–56. Boons, F. & Lüdeke-Freund, F. (2013): Business models for sustainable innovation: state-of-the-art and steps towards a research agenda, Journal of Cleaner Production, Vol. 45, 9–19. Breuer, H. & Lüdeke-Freund, F. (2014): Normative Innovation for Sustainable Business Models in Value Networks, in: Huizingh, K.; Conn, S.; Torkkeli, M. & Bitran, I. (Eds.): The Proceedings of XXV ISPIM Conference - Innovation for Sustainable Economy and Society, 8-11 June 2014, Dublin, Ireland. Schaltegger, S. & Burritt, R. (2005): Corporate Sustainability, in: Folmer, H. & Tietenberg, T. (Eds.): International Yearbook of Environmental and Resource Economics 2005/2006. Cheltenham: Edward Elgar, 185–222. Schmidt-Bleek, F. (2000): Factor 10 Manifesto, http://www.factor10-institute.org/files/F10_Manifesto_e.pdf Upward, A. (2013): Towards an Ontology and Canvas for Strongly Sustainable Business Models: A Systemic Design Science Exploration. Masters of Environmental Studies / Graduate Diploma in Business + Environment. Toronto: York University. Wells, P. (2013): Business Models for Sustainability. Cheltenham: Edward Elgar Publishing. Wüstenhagen, R. & Boehnke, J. (2008): Business models for sustainable energy, in: Tukker, A.; Charter, M.; Vezzoli, C.; Stø, E. & Andersen, M. M. (Eds.): Perspectives on radical changes to sustainable consumption and production. System Innovation for Sustainability. Sheffield: Greenleaf Publishing, 70–79. Wysocky, K. (2014): Riversimple, the Welsh dragon that spits water vapour, http://www.bbc.com/autos/story/20141114-riversimple-the-welsh-dragon-that-spits-water-vapour