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New business models for sustainability
The document discusses innovative business models for sustainability, focusing on the roles of social entrepreneurship, circular economy, and the bottom of the pyramid. It outlines various sustainable approaches, including mitigation and adaptation strategies, and highlights the importance of a corporate culture that fosters innovation. The text emphasizes the need for businesses to address environmental challenges and social inequities through collaborative efforts and new business paradigms.
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New business models for sustainability
- 1. New Business Modelsfor Sustainability International program Green Sustainable Economy University College Aalborg Menno de Lind van Wijngaarden
- 2. Program n Sustainability n Businesspicking up the challenge n Innovation for sustainability n Social Entrepreneurship n Circular economy n Base of the pyramid
- 3.
- 4. Sustainability n The problemsat hand: n Pollution n Resource depletion n Natural ecosystems n Resources n Inequity n Population growth n Consumption growth
- 5. Sustainability approaches n Mitigationstrategies “If we act now we can save the world as we know it” n E.g. CO2 offset, Emission Trading Schemes n Adaptation strategies “ be ready for a big disruption” n E.g. low carbon strategies, zero footprint
- 6. Program n Sustainability n Businesspicking up the challenge n Innovation for sustainability n Social Entrepreneurship n Circular economy n Base of the pyramid
- 7. The role ofbusiness The culprit? The answer to the solution?
- 8. Business as driverof change? n Quick in response to external threats n Know-how in-house, industrial networks, in public-private partnerships. n Capital available for investment n Pressure over suppliers n Influence over customers n Round tables, covenants, standardizations with competition
- 9. From obligation toopportunity 1945-1960’s Pollution: Denial or “part of progress 1970’s-1980’s End-of-Pipe regulation. Pay to reduce negative impact (trade- off) 1980’s-2000 Greening: pollution prevention, product stewardship (eco- efficiency) 2000-present Beyond greening: Clean technology, Base of the Pyramid
- 10. Perspectives on Business Differentperspectives of business in the sustainability context
- 11. Areas of BusinessInvestment Areas of business investment in sustainability today
- 12.
- 13. Program n Sustainability n Businesspicking up the challenge n Innovation for sustainability n Social Entrepreneurship n Circular economy n Base of the pyramid
- 14.
- 15. The process ofinnovation n Idealized process of innovation n In real life innovation will not be this neatly categorized Insight / Research Develop ment Design Market Evaluation Produc -tion engineer -ing Market / Pilot testing Full scale manufac -ture & launch Innovation Research and Development Commercialization
- 16.
- 17. The functions ofa business model Business Model Invention Value Creation Value capture
- 18. Innovation and organization nHow can you foster innovation in your organization? n Business should have “ absorptive capacity” n “the ability of a firm to recognize the value of new, external information, assimilate it and apply it to commercial ends”
- 19. Corporate culture n Ingeneral, firms with a strong record of innovation have a corporate culture that values and promotes: n Outward-looking orientation n Facilitating communication n Openness to new ideas n Challenging established ideas n Acceptability of failure n Promotion of evaluation and reflection
- 20. Program n Sustainability n Businesspicking up the challenge n Innovation for sustainability n Social Entrepreneurship n Circular economy n Base of the pyramid
- 21. Example of SocialEntrepreneur n Muhammad Yunus n Founder of the Grameen bank, it’s model of microfinance inspired hundreds of banks to develop similar business models n Received the Nobel peace price in 2006
- 22. Social entrepreneurship n Growingphenomena, because… n Growing inequity n Weak institutions, retrieving governments n Scandals in corporate world n Need for inspiration!
- 23. What is Soc.Entrepreneurship? n Relative new research field therefore broad definition. n ‘a process involving the innovative use and combination of resources to pursue opportunities to catalyse social change and/or address social needs.’ (Mair and Marti, 2006) n Often a focus on the entrepreneur (the change agent); personality, qualities, values and visions. n Characterized by n Social impact (Social return on investment) n Innovation (business model) n Market orientation (performance-driven, competitive, co-operation across sectors.)
- 24. Example • Restaurant chain‘Fifteen’ • Founded by Jamie Oliver in 2002 • Each restaurant recruits unemployed and under-qualified young people, aged between 18 and 24, from the local area and trains them to become qualified chefs through an Apprentice Program. • 220 have graduated since the start and more than 90 per cent of apprentices stay in the business. •The profit of the restaurants goes into the chef apprenticeship scheme
- 25. Philanthropy v.s. SE PhilanthropySocial Entrepreneurship Spontaneous charity Reasoning about social return Honoring sacrifice and justifying weak results Need for talent and expertise to address challenges Pure giving Business like approaches Relieving suffering Solving the problem and its cause Caring for people Empowering people Dees, J. G. (2012) But not just a bipolar strategy; Some problems ask for philanthropy, others for SE Most SE start with charity The two different cultures can also be aligned.
- 26. Program Sustainability Business picking upthe challenge Innovation for sustainability Social Entrepreneurship Circular economy The Natural Step Natural capital Cradle to Cradle Base of the pyramid
- 27. Circular economy Industry shouldmove to closed loop systems in alignment with laws of nature: Circular Economy: The Natural Step Natural Capitalism Cradle to Cradle
- 28. The Naturel Step TheNatural Step Karl-Henrik Robèrt The Four System Conditions... . . . Reworded as The Four Principles of Sustainability In a sustainable society, nature is not subject to systematically increasing: To become a sustainable society we must... 1. concentrations of substances extracted from the earth's crust 1. eliminate our contribution to the progressive buildup of substances extracted from the Earth's crust (for example, heavy metals and fossil fuels) 2. concentrations of substances produced by society 2. eliminate our contribution to the progressive buildup of chemicals and compounds produced by society (for example, dioxins, PCBs, and DDT ) 3. degradation by physical means 3. eliminate our contribution to the progressive physical degradation and destruction of nature and natural processes (for example, over harvesting forests and paving over critical wildlife habitat); and 4. and, in that society, people are not subject to conditions that systemically undermine their capacity to meet their needs 4. eliminate our contribution to conditions that undermine people’s capacity to meet their basic human needs (for example, unsafe working conditions and not enough pay to live on).
- 29. Example After receiving criticismon formaldehyde off- gassing , use of PVC, paper and chlorine use for catalogue, IKEA decided to work with The Natural Step in 1992. It is now the basis for their environmental program; step by step environmental impact reduction of all products.
- 30. Natural Capitalism 3principles • Buy the time to deal with the growing challenges facing the planet by using all resources far more productively. (=eco-efficiency) • Redesign how we make all products and provide services, using such approaches as biomimicry and cradle to cradle. • Manage all institutions to be restorative of human and natural capital
- 31. Natural Capitalism Increase productivityof natural resources Whole system design Adopting innovative techniques Redesign production according to biological models Closed loop systems Zero waste Change the business model Not selling lifts/elevators, but “leasing vertical transportation”
- 32. Example: Interface Inc.carpet Ray Anderson, CEO Changed business model From selling to leasing Evergreen lease “Floor Covering Service”
- 33. Innovation of BusinessModels From waste as a cost to a waste as an asset Recycling factory in Kampala, Uganda pays cash p. kilo plastics, has lead to numerous local initiatives, 43 people working in the factory, hundreds make a living collecting. The clean end products are sold to China for fibers of fleece and carpets. The environment benefits too. From car lease to mobility services Athlon car lease, the biggest lease company of the Netherlands closed a deal with the Dutch Railway, NS. It offers now clients a car lease plus NS Business Card. Athlon wants to become a mobility broker in 2020.
- 34. Cradle to Cradle TheNext Industrial Revolution?
- 35. Waste = FoodPrinciple
- 36. Waste = Food Designproducs and processes in such a way: that resources remain available for human use or the natural environment That they are save for the environment and can be reused: Waste = Food Non renewables are valuable resource for technosphere (food for process) Non reusables are decomposable in the biosphere (food for organisms)
- 37. Cradle to cradlebook Cradle to cradle: remaking the way we make things Written by Architect McDonough and chemist Braungart Published in 2002
- 38. resource raw material component assembly consumption disposal Cradle toGrave Cradle to Cradle resource raw material component assembly consumption disposal
- 39. Cradle to Cradle Incontrast to Cradle to Grave concept Reduce, reuse, recycling (3 R’s) Reducing: ‘poisoning’ at a slower rate Reuse: products are not designed for this purpose Recycling: down cycling and potentially dangerous
- 40. Cradle to Cradle Focuson: Design, start from the root of the problem Biological processes, like ecological systems Not Eco-efficiency (3 R’s) but Eco- effectiveness Waste = Food principle Biological nutrients and technical nutrients
- 41. What about thebook? Do you notice something about the physical appearance of the book?
- 42. The Book itself NoPaper, but synthetic resins Non toxic, recyclable (up cycle) Superior durability and performance Waterproof Ink can be washed of • As an example of their concept: the book is a ‘technical nutrient’
- 43. C2C in Business Ideashas followers among “big business”: Nike, Ford Motor Company, Herman Miller 2 documentaries in NL attracted attention of business
- 44. Example of certifiedC2C Diapers fully recyclable, compostable and flushable No use of chlorine, plastics, latex, perfumes, inks and dyes. It takes up 500 years to biodegrade for a normal disposable diaper in a landfill
- 45. C2C in theNetherlands Happy Shrimp Farm Heat exchange system with E.ON Power Plant Biological filter bed No damage to marine ecosystems http://www.happyshrimp.nl/
- 46. Happy Shrimp Farm Wentbankrupt 23-06-2009 Shrimps didn’t grow fast enough, harvests too small 2 partners are in conflict 600.000 debt at ING bank
- 47. Program Sustainability Business picking upthe challenge Innovation for sustainability Social Entrepreneurship Circular economy Base of the pyramid
- 48. Bottom of thePyramid
- 49. Bottom of thePyramid Concept of C.K. Prahalad 4 billion people at bottom of economic pyramid, with income less then $ 1.500 PPP Can be seen as a latent market of goods and services Aggregated there is a huge potential
- 50. Bottom of thePyramid Removal of poverty penalty (=high prices due to, local monopolies, inadequate access, poor distribution, strong traditional intermediaries) Find access to BOP market (urban easier than rural areas) Create capacity to consume (e.g. single serve packaging)
- 51. Bottom of thePyramid Three A’s AFFORDABILITY (single serve package) ACCESS (high intensity of distribution) AVAILABILITY (consumption when capacity is there)
- 52. BOP market requirements Innovative Highprice performance Conserving resources Focus on functionality Deskilled work / operation Education of customers High performance / endurance
- 53. Critique on BoP Byco-author Stuart Hart Too many same products at lower prices, no new approach environmental unsustainable products and services “dumped” on BoP market Poor are not just consumers, should be considered as partners in mutual learning
- 54. From Bottom toBase
- 55. New Business Models Conclusions: Businessas a driver for change, when primed for innovation. Government and regulating authorities needed for leveling playing field, stimulation of innovation Circular economy principles needed for environmental solutions Base of the Pyramid, social entrepreneurship for social solutions
- 56. Thank you Be thechange that you want to see in the world. Mohandas Gandhi
Editor's Notes
- #11 From: Blowfield, M. (2012). Business and sustainability. Oxford: Oxford University Press. p.61.
- #12 From: Blowfield, M. (2012). Business and sustainability. Oxford: Oxford University Press. p.65.
- #17 Currently we are entering the 6th wave; the wave of the life-sciences
- #23 From: Pless, N. M. (2012). Social Entrepreneurship in Theory and Practice—An Introduction. Journal of Business Ethics, 1–4. doi:10.1007/s10551-012-1533-x
- #24 From: Pless, N. M. (2012). Social Entrepreneurship in Theory and Practice—An Introduction. Journal of Business Ethics, 1–4. doi:10.1007/s10551-012-1533-x
- #25 From: http://www.fifteen.net/about
- #26 From: Dees, J. G. (2012). A Tale of Two Cultures: Charity, Problem Solving, and the Future of Social Entrepreneurship. Journal of Business Ethics, 1–14. doi:10.1007/s10551-012-1412-5
- #31 See article Lovins, A. B., Lovins, L. H., & Hawken, P. (1999). A Road Map for Natural Capitalism. Harvard Business Review