Understanding the Sustainable Business Model

We are all aware of the harmful effects of plastic on the environment. Being non-biodegradable, plastic products, such as plastic bottles, are indestructible and can linger on for years and years. The plastic often ends up in oceans and seas and harm marine life. The effects are now becoming more widespread and harmful, with microplastics (broken-down plastic), harmful to humans being found even in unborn babies. If the course continues, it won’t be long before we lose the human race and the entire planet to plastic pollution.

We need to act and act now.

One way we can curb plastic use and plastic pollution is by building a sustainable business model. But before you make the shift to it, let us first understand in detail the concept of a sustainable business model.

What is a sustainable business model?

A sustainable business model generates high value for all the stakeholders involved without depleting the resources it relies on. It involves assessing the environmental impact of the process and aims to keep it to a bare minimum.

What makes the business model work?

Four components are required for a sustainable business model to work and become successful. They are:

  • Profitability

No business model is successful unless it is profitable. The same goes for a sustainable business model. It should attract customers, help in the growth of the business, and bring in profits.

  •  Long-term goals

Any new business model may bring short-term benefits. But to be truly effective, the business model must prove beneficial in the long-term. A sustainable business model gives benefits in the long run. Hence, you should not abandon it midway, if you don’t see quick results.

  • Resource utilization

A sustainable business model uses resources for a long time — moreover, the resources used as sustainable, meaning that they will have no impact on the environment. Most of the business activities involve using finite resources and employing processes that are harmful to the environment. A sustainable business model aims at replacing the resources and processes with environment-friendly ones.

  • Receiving it back

A truly sustainable business model gives back as much as it takes. The model is based on the borrow-use-return concept. In such a model, the resources are borrowed rather than being taken. The resources are then used and then replenished or returned.

person holding a phone over a reusable bag

How to start a sustainable business model?

There are three main steps to a sustainable business model. They are:

  • Planning

The first step is planning resources’ usage in various processes. You will need to make a list of all the raw materials required. Depending on the type of business, the list may vary significantly. For instance, a cellphone manufacturing company will have a different raw materials listed than a cloth manufacturing one.

Once you have planned the resources required, the next step is to address matters that can lead to a sustainable business model.

The questions include:

1. What processes are wasteful or produce the most waste? How can the negative effects of the processes be mitigated?

2. What materials are causing harm to the environment? Can the materials be replaced with others that are environment-friendly?

3. Where can the wastage be reduced? Can the final products be made with minimum to zero waste?

4. What are the labor working conditions like? How can they be improved to reduce wastage and impact on the environment?

  • Considering alternatives for ownership

The traditional top-down model is not conducive to a sustainable business model. The model creates unreasonable gaps between the highest authorities and the lowest employees and proves to be a disadvantage in creating a successful sustainable model. You can opt for an alternative model where every stakeholder can easily communicate with each other.

  • Engaging your customers

In the end, your products and your sustainability model should resonate with your customers. You should spread awareness among your customers regarding your sustainability policies and encourage them to become active participants in your journey towards sustainability. You can do this through marketing campaigns such as pledging to donate a certain fraction of the profits to a charity dedicated to improving the environment.

If you are looking to implement a sustainable business model at your workplace, remember that the task will be tough. You will incur a lot of costs and there will be extra strain on operations and even human resources. If you will look at the short-term, you won’t find many benefits in implementing a sustainable business model. However, if you look at it from a long-term perspective, you will be guaranteed benefits.

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