Large firms are increasingly adopting and scaling up sustainability innovations and reaping substantial rewards for themselves and their customers, according to a new report.
The Green Game-Changers report by WWF highlights the actions that large firms have taken to transform their business models towards sustainability. It looks at large-scale sustainability initiatives in companies such as Hertz, Phillips, Kingfisher, DONG Energy, BASF and PepsiCo, and finds that sustainable business innovations are often driven by smaller, disruptive business models creating new markets and altering existing ones.
Here are some key recommendations from the report for firms starting out on the road to implementing sustainable business models:
- Monitor emerging models
Firms in all markets should consider how companies in their industry are delivering value and monitor shifts and new players in the market. Companies like Kingfisher and Hertz have been prompted to move towards business models based on sharing or renting goods and services by companies like Zilok and Zipcar.
- Don’t stop at sustainable product innovation.
Sustainable products require business models that ensure a viable business case that captures all the value provided. Phillips and DONG energy have both created new service models to fully capture the benefit for themselves and customers of sustainability innovations.
- Get buy-in from the top.
Internal leadership support is crucial for sustainable business model innovations to achieve scale. Umicore credit their business’s transformation to a consistent vision from the top of the firm backing increased recycling and ‘urban mining’.
- Reassess the value chain.
Truly sustainable business models look outside a firm’s four walls to the impacts that the company has in the value chain, both upstream and downstream. PepsiCo and BASF have both had early successes in creating restorative models that have a net-positive impact on the environment.
- Collaborate externally.
The report highlights the importance of developing new business propositions and shifting towards sustainable models and shows that this cannot be done without engaging with the market and collaborating with external partners.
Dax Lovegrove, head of business and industry at WWF-UK, said: “Scalability clearly remains crucial for true business innovation, but this reports shows that, as small-scale green innovators with novel business models are gaining traction and market share across the world, large firms need to reconsider business models to ensure they don’t get left behind.”