Skip to main content Accessibility help

We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.

Close cookie message
×
Hostname: page-component-6bf8c574d5-9nwgx Total loading time: 0 Render date: 2025-02-19T22:49:01.663Z Has data issue: false hasContentIssue false

7 - Sustainability and Business Models

Published online by Cambridge University Press:  02 May 2024

Chander Velu
Chander Velu
Affiliation:
University of Cambridge
Get access

Summary

What are the benefits and challenges inherent in designing business models to address the major global sustainability challenges? This chapter examines the challenges related to climate change and the sustainability agenda, as well as the benefits of maintaining biodiversity. In particular, it looks at the different challenges involved in value creation and value capture from a multiple-stakeholder perspective. It examines how to internalise externalities and design business models that encompass economic, social and environmental goals.

Type
Chapter
Information
Business Model Innovation
A Blueprint for Strategic Change
 , pp. 165 - 201
Publisher: Cambridge University Press
Print publication year: 2024

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Amasawa, E., Shibata, T., Sugiyama, H., and Hirao, M. (2020). Environmental Potential of Reusing, Renting, and Sharing Consumer Products: Systematic Analysis Approach. Journal of Cleaner Production 242: 1–11.CrossRefGoogle Scholar
Anaya, K. L. and Pollitt, M. G. (2019). Storage Business Models: Lessons for Electricity from Cloud Data, Frozen Food and Natural Gas. The Energy Journal 40: 409–432.CrossRefGoogle Scholar
Bakker, S. and Konings, R. (2018). The Transition to Zero-Emission Buses in Public Transport – The Need for Institutional Innovation. Transportation Research Part D 64: 204–215.CrossRefGoogle Scholar
Batista, L, Bourlakis, M., Smart, P., and Maull, R. (2018). In Search of a Circular Supply Chain Archetype – A Content-Analysis-Based Literature Review. Production Planning & Control 29(6): 438-451CrossRefGoogle Scholar
BEIS. (2021). Low Carbon Hydrogen Business Model: Consultation on a Business Model for Low Carbon Hydrogen. Department of Business, Energy & Industrial Strategy: 1–90.Google Scholar
Bidmon, C. M. and Knab, S. F. (2018). The Three Roles of Business Models in Societal Transitions: New Linkages between Business Model and Transition Research. Journal of Cleaner Production 178: 903–916.CrossRefGoogle Scholar
Bigdeli, A. Z., Li, F., and Shi, X. (2015). Sustainability and Scalability of University Spinouts: A Business Model Perspective. R & D Management 46(3): 504–518.CrossRefGoogle Scholar
Bishop, J., Kapila, S., Hicks, F., Mitchell, P., and Vorhies, F. (2009). New Business Models for Biodiversity Conservation. Journal of Sustainable Forestry 28: 282–303.CrossRefGoogle Scholar
Bocken, N. M. P., Short, S. W., Rana, P., and Evans, S. (2014). A Literature and Practice Review to Develop Sustainable Business Model Archetypes. Journal of Cleaner Production 65: 42–56.CrossRefGoogle Scholar
Bocken, N. M. P., Mugge, R., Bom, C. A., and Lemstra, H-J. (2018). Pay-per-Use Business Models as a Driver for Sustainable Consumption: Evidence from the Case of HOMIE. Journal of Cleaner Production 198: 498–510.CrossRefGoogle Scholar
Bocken, N. M. P., Boons, F., and Baldassarre, B. (2019). Sustainable Business Model Experimentation by Understanding Ecologies of Business Models. Journal of Cleaner Production 208: 1498–1512.CrossRefGoogle Scholar
Bokat-Lindell, S. (2021). Do We Need to Shrink the Economy to Stop Climate Change? International New York Times, 16 September 2021.Google Scholar
Bolton, R. and Hannon, M. (2016). Governing Sustainability Transitions through Business Model Innovation: Towards a Systems Understanding. Research Policy 45(9): 1731–1742.CrossRefGoogle Scholar
Boulding, K. E. (1945). The Consumption Concept in Economic Theory. The American Economic Review 35(2): 1–14.Google Scholar
Boulding, K. E. (1949). Income or Welfare. The Review of Economic Studies 17(2): 77–86.CrossRefGoogle Scholar
Boulding, K. E. (1966). The Economics of the Coming Spaceship Earth. Resources for the Future: 1–14.Google Scholar
Branca, T. A., Fornai, B., Colla, V., Pistelli, M. I., Faraci, E. L., Cirilli, F., and Schroder, J. (2021). Industrial Symbiosis and Energy Efficiency in European Process Industries: A Review. Sustainability 13: 1–37.CrossRefGoogle Scholar
Bryant, S. T., Straker, K., and Wrigley, C. (2019). The Discourses of Power – Governmental Approaches to Business Models in the Renewable Energy Transition. Energy Policy 130: 41–59.CrossRefGoogle Scholar
Cardinale, B. J., Duffy, J. E., Gonzalez, A., Hooper, D. U., Perrings, C., Venail, P., Narwani, A., Mace, G. M., Tilman, D., Wardle, D. A., Kinzig, A. P., Daily, G. C., Loreau, M., Grace, J. B., Larigauderie, A., Srivastava, D. S., and Naeem, S. (2012). Biodiversity Loss and Its Impact on Humanity. Nature 486: 59–68.CrossRefGoogle ScholarPubMed
Chakrabarty, D. (2020). The Human Sciences and Climate Change: A Crisis of Anthropocentrism. Science and Culture 86(1–2): 46–48.CrossRefGoogle Scholar
Chopra, S. S. and Khanna, V. (2014). Understanding Resilience in Industrial Symbiosis Networks: Insights from Network Analysis. Journal of Environmental Management 141: 86–94.CrossRefGoogle ScholarPubMed
Ciulli, F. and Kolk, A. (2019). Incumbents and Business Model Innovation for the Sharing Economy: Implications for Sustainability. Journal of Cleaner Production 214: 995–1010.CrossRefGoogle Scholar
Crowley, H., DeKoszmovszky, J., Firbank, L. G., Fulford, B., Gardner, T. A., Hails, R. S., Halvorson, S., Jack, M., Kerrison, B., Koh, L. S. C., Lang, S. C., McKenzie, E. J., Monsivais, P., O’Riordan, T., Osborn, J., Oswald, S., Price Thomas, E., Raffaelli, D., Reyers, B., Srai, J.S., Strassburg, B. B. N., Webster, D., Welters, R., Whiteman, G., Wilsdon, J., and Vira, B. (2017). Research Priorities for Managing the Impacts and Dependencies of Business upon Food, Energy, Water and the Environment. Sustainability Science 12: 319–331.Google Scholar
Cusumano, M. A., Kahl, S. J. and Suarez, F. F. (2015). Services, Industry Evolution, and the Competitive Strategies of Product Firms. Strategic Management Journal 36(4): 559–575.CrossRefGoogle Scholar
Cyert, R. M. and March, J. G. (1963). A Behavioral Theory of the Firm. Englewood Cliffs, NJ: Prentice Hall.Google Scholar
Dasgupta, P. (2021). The Economics of Biodiversity: The Dasgupta Review. London: HM Treasury.Google Scholar
Davies, I. A. and Doherty, B. (2019). Balancing a Hybrid Business Model: The Search for Equilibrium at Cafédirect. Journal of Business Ethics 157: 1043–1066.CrossRefGoogle Scholar
Dewey, J. (1944). Some Questions about Value. The Journal of Philosophy 41(17): 449–455.CrossRefGoogle Scholar
Dryzek, J. S. and Stevenson, H. (2011). Global Democracy and Earth System Governance. Ecological Economics 70: 1865–1874.CrossRefGoogle Scholar
Elkington, J. (1997). Cannibals with Forks: The Triple Bottom Line of 21st Century. Oxford: Capstone.Google Scholar
Ellen MacArthur Foundation. (2013). Towards the Circular Economy: Economic and Business Rationale for an Accelerated Transition.Google Scholar
Ellen MacArthur Foundation. (2015). Delivering the Circular Economy: A Toolkit for Policymakers.Google Scholar
Elzen, B., Geels, F., and Green, K. (2004). System Innovation and the Transition to Sustainability.CrossRefGoogle Scholar
Feger, C. and Mermet, L. (2020). New Business Models for Biodiversity and Ecosystem Management Services: An Action Research with a Large Environmental Sector Company. Organization & Environment 35(2): 1–30.Google Scholar
Flower, J. (2015). The International Integrated Reporting Council: A Story of Failure. Critical Perspectives on Accounting 27: 1–17.CrossRefGoogle Scholar
Geels, F. W. (2018). Socio-Technical Transitions to Sustainability. Oxford Research Encyclopaedia of Environmental Science. 39: 187–201CrossRefGoogle Scholar
Geels, F. W. and Schot, J. (2007). Typology of Sociotechnical Transition Pathways. Research Policy 36(3): 399–417.CrossRefGoogle Scholar
Geissdoerfer, M., Savaget, P., Bocken, N. M. P., and Hultink, E. J. (2017). The Circular Economy – A New Sustainability Paradigm? Journal of Cleaner Production 143: 757–768.CrossRefGoogle Scholar
Haskel, J. and Westlake, S. (2017). Capitalism without Capital: The Rise of the Intangible Economy. Princeton, NJ: Princeton University Press.CrossRefGoogle Scholar
Hawken, P., Lovins, A. B., and Lovins, L. H. (1999). Natural Capitalism: The Next Industrial Revolution. Washington, DC: Island Press.Google Scholar
Henderson, R. (2021). Innovation in the 21st Century: Architectural Change, Purpose, and the Challenges of Our Time. Management Science 67(9): 1–10.Google Scholar
Hickel. (2017). The Divide: A Brief Guide to Global Inequality and Its Solutions. London: William Heinemann.Google Scholar
Hopkinson, P., Zils, M., Hawkins, P., and Roper, S. (2018). Managing a Complex Global Circular Economy Business Model: Opportunities and Challenges. California Management Review 60(3): 71–94.CrossRefGoogle Scholar
Hughes, T. (1983). Networks of Power: Electrification in Western Society 1880–1930. Baltimore: John Hopkins University Press.CrossRefGoogle Scholar
International Energy Agency. (2021). Net Zero by 2050: A Roadmap for the Global Energy Sector. International Energy Agency Special Report, IEA Publications, Paris, France.Google Scholar
IPCC (Intergovernmental Panel on Climate Change). (2018). Global Warming of 1.5 °C. An IPCC Special Report on the Impacts of Global Warming of 1.5 °C above Pre‐industrial Levels and Related Global Greenhouse Gas Emission Pathways, in the Context of Strengthening the Global Response to the Threat of Climate Change, Sustainable Development and Efforts to Eradicate Poverty. www.ipcc.ch/sr15/.Google Scholar
Keyber, L. T. and Lenzen, M. (2021). 1.5 °C Degrowth Scenarios Suggest the Need for New Mitigation Pathways. Nature Communications 12: 1–16.Google Scholar
Khmara, Y. and Kronenberg, J. (2018). Degrowth in Business: An Oxymoron or a Viable Business Model for Sustainability? Journal of Cleaner Production 177: 721–731.CrossRefGoogle Scholar
Köhler, J., Geels, F. W., Kern, F., Markard, J., Wieczorek, A., Alkemade, F., Avelino, F., Bergek, A., Boons, F., Fünfschilling, L., Hess, D., Holtz, G., Hyysalo, S., Jenkins, K., Kivimaa, P., Martiskainen, M., McMeekin, A., Mühlemeier, M. S., Nykvist, B., Onsongo, E., Pel, B., Raven, R., Rohracher, H., Sandén, B., Schot, J., Sovacool, B., Turnheim, B., Welch, D., and Wells, P. (2019). An Agenda for Sustainability Transitions Research: State of the Art and Future Directions. Environmental Innovation and Societal Transitions 31: 1–32.CrossRefGoogle Scholar
Kortmann, S. and Piller, F. (2016). Open Business Models and Closed-Loop Value Chains: Redefining the Firm-Consumer Relationship. California Management Review 58(3): 88–108.CrossRefGoogle Scholar
Lehoux, P., Silva, H. P., Denis, J-L., Miller, F. A., Sabio, R. P., and Mendell, M. (2021). Moving toward Responsible Value Creation: Business Model Challenges Faced by Organizations Producing Responsible Health Innovations. Journal of Product Innovation Management 38: 548–573.CrossRefGoogle Scholar
Lovins, A. B., Lovins, L. H., and Hawken, P. (1999). A Road Map for Natural Capitalism. Harvard Business Review 77(3): 145–158.Google ScholarPubMed
Markard, J., Raven, R., and Truffer, B. (2012). Sustainability Transitions: An Emerging Field of Research and Its Prospects. Research Policy 41: 955–967.CrossRefGoogle Scholar
McDonough, W. and Braungart, M. (2002). Cradle to Cradle: Remaking the Way We Make Things. New York, NY: North Point Press.Google Scholar
McKinsey, . (2021). Curbing Methane Emissions: How Five Industries Can Counter a Major Climate Threat, September.Google Scholar
Nillesen, P. and Pollitt, M. (2016). New Business Models for Utilities to Meet the Challenge of the Energy Transition Chapter 15. In: F. P. Sioshansi (ed.), Future of Utilities – Utilities of the Future: How Technological Innovations in Distributed Energy Resources Will Reshape the Electric Power Sector. London: Academic Press, 283–301.Google Scholar
Nuttall, W. J. and Bakenne, A. T. (2019). Fossil Fuel Hydrogen – Technical, Economic and Environmental Potential. Gewerbestrasse, Switzerland: Springer.Google Scholar
Pacheco, D.A. de J., ten Caten, C.S., Jung, C.F., Sassanelli, C., Terzi, S. (2019). Overcoming Barriers towards Sustainable Product-Service Systems In: Small and Medium-Sized Enterprises. Journal of Cleaner Production. 222: 903–921Google Scholar
Painter, M., Hibbert, S., and Cooper, T. (2019). The Development of Responsible and Sustainable Business Practice: Value, Mind-Sets, Business-Models. Journal of Business Ethics 157: 885–891.CrossRefGoogle Scholar
Pardo, R. J. H, Bhamra, T., and Bhamra, R. (2012). Sustainable Product Service Systems in Small and Medium Enterprises (SMEs): Opportunities in the Leather Manufacturing Industry. Sustainability 4: 175–192.CrossRefGoogle Scholar
Parry, G. C., Brax, S. A., Maull, R. S., and Ng, I. C. L. (2016). Operationalising IoT for Reverse Supply: The Development of Use-Visibility Measures. Supply Chain Management 21(2): 228–244.CrossRefGoogle Scholar
Paulson, H. (2021). The World’s Biodiversity Peril. The New York Times, 23 October.Google Scholar
Rajan, M. (1997). Global Environment Politics: India and North-South Politics of Global Environment Issues. Delhi: Oxford University Press.Google Scholar
Raworth, K. (2018). Doughnut Economics. Seven Ways to Think Like a 21st-Century Economist. White River Junction, VT: Chelsea Green Publishing.Google Scholar
Rendtorff, J. D. (2019). Sustainable Development Goals and Progressive Business Models for Economic Transformation. Local Economy 34(6): 510–524.CrossRefGoogle Scholar
Ripple, W. J., Wolf, C., Newsome, T. M., Barnard, P., and Moomaw, W. R. (2020). World Scientists’ Warning of a Climate Emergency. BioScience 70(1): 8–12.CrossRefGoogle Scholar
Roome, N. and Louche, C. (2016). Journeying Toward Business Models for Sustainability: A Conceptual Model Found Inside the Black Box of Organisational Transformation. Organization & Environment 29(1): 11–35.CrossRefGoogle Scholar
Rosenbloom, D., Markard, J., Geels, F. W., and Fuenfschilling, L. (2020). Why Carbon Pricing Is Not Sufficient to Mitigate Climate Change – and How “Sustainability Transition Policy” Can Help. PNAS 117(16): 8664–8668.CrossRefGoogle ScholarPubMed
Rozentale, I. and van Baalen, P. J. (2021). Crafting Business Models for Conflicting Goals: Lessons from Creative Service Firms. Long Range Planning 54(2-3): 1–17.Google Scholar
Sachs, J. D. (2012). From Millennium Development to Sustainable Development Goals. The Lancet 379: 2206–2211.CrossRefGoogle ScholarPubMed
Sachs, J. D. (2015). The Age of Sustainable Development. New York: Columbia University Press.CrossRefGoogle Scholar
Sarasini, S. and Linder, M. (2018). Integrating a Business Model Perspective into Transition Theory: The Example of New Mobility Services. Environmental Innovation and Societal Transitions 27: 16–31.CrossRefGoogle Scholar
Short, S. W., Bocken, N. M. P., Barlow, C. Y., and Chertow, M. R. (2014). From Refining Sugar to Growing Tomatoes Industrial Ecology and Business Model Evolution. Journal of Industrial Ecology 18(5): 603–618.CrossRefGoogle Scholar
Smith, N. (2021). People Are Realizing that Degrowth Is Bad. Noahpinion. https://noahpinion.substack.com/p/people-are-realizing-that-degrowth (accessed 29 November 2021).Google Scholar
Solberg, E., Traavik, L. E. M., and Wong, S. I. (2020). Digital Mindsets: Recognizing and Leveraging Individual Beliefs for Digital Transformation. California Management Review 62(4): 105–124.CrossRefGoogle Scholar
Team Gemini. (2015). Danish Town of Kalundborg Implements Valuable Industrial Resource Management Model. Sustainable Development. http://teamgemini.us/danish-town-of-kalundborg-implements-valuable-industrial-resource-management-model/ (accessed 14 January 2022).Google Scholar
The Economist. (2021). Technology Can Help Conserve Biodiversity.Google Scholar
The Economist. (2021a). Put a Plug in It. Governments Should Set Targets to Reduce Methane Emissions. It Would Rapidly Make a Difference to Climate Change, 31 March.Google Scholar
The Economist. (2021b). Global Warming: Those Who Worry about CO2 Should Worry about Methane, Too, 3 April.Google Scholar
The Economist. (2021c). What Happened at COP26? 11 November.Google Scholar
The Sunday Times. (2022). Highview Chief Rupert Pearce on the Cold Batteries that Could Save the Planet, 24 April.Google Scholar
Thomson, I. (2015). “But Does Sustainability Need Capitalism or an Integrated Report,” A Commentary on “The International Integrated Reporting Council: A Story of Failure,” by J. Flower. Critical Perspectives on Accounting 27: 18–22.CrossRefGoogle Scholar
United Nations. (2020). The Sustainable Development Goals Report. New York: United Nations Publications.Google Scholar
Wesseling, J. H., Bidmon, C., and Bohnsack, R. (2020). Business Model Design Spaces in Socio-Technical Transitions: The Case of Electric Driving in the Netherlands. Technological Forecasting & Social Change 154: 1–11.CrossRefGoogle Scholar
Winn, M. I. and Pogutz, S. (2013). Business, Ecosystems, and Biodiversity: New Horizons for Management Research. Organization & Environment 26(2): 203–229.CrossRefGoogle Scholar
WWF. (2012). The Living Planet Report 2012.Google Scholar
Yang, M., Smart, P., Kumar, M., Jolly, M., and Evans, S. (2018). Product–Service Systems Business Models for Circular Supply Chains. Production Planning & Control 29(6): 498–508.CrossRefGoogle Scholar
Yang, M. and Evans, S. (2019). Product–Service System Business Model Archetypes and Sustainability. Journal of Cleaner Production 220: 1156–1166.CrossRefGoogle Scholar

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×