Here are seven ways that businesses can start transitioning toward a sustainable business model, according to Dr. Sally Uren, deputy chief executive, Forum for the Future, in a contributed article for The Guardian.
The Forum for the Future recently held its second Business Network event, which looked at sustainable business models in practice.
Here are Uren’s seven tips for starting on the path toward sustainability.
1. Try new financing mechanisms. Uren says these could include forward purchase agreements for suppliers to allow them to experiment with new production methods, match funding arrangements with government bodies and a sustainable innovation or investment fund, which could be used to kick-start sustainable innovations.
2. Aim for profitability. She tells organizations not to view the sustainability program as a cost, but rather as an investment that will yield financial benefits to the business. As an example, Mark & Spencer’s Plan A program generated £50 million (approximately $81 million) net profit from resource efficiencies and new product developments in year three of the five-year program.
3. Integrate sustainability thinking into the business. This can include incorporating sustainability performance into cash bonus schemes and embarking on comprehensive change management programs.
4. Change the value proposition. Uren says businesses need to use the power of their brand and marketers to help consumers equate quality with things other than volume. Sustainability needs to be an attractive value proposition for everyone, she says.
5. Start shifting to a more sustainable product portfolio. This can be achieved by either removing non-sustainable products off the shelves or promoting the more sustainable choices.
6. Create a roadmap. She recommends that businesses have a clear roadmap towards sustainability in order to meet transformational goals rather than taking small steps toward sustainability.
7. Innovate. Innovation is the key to a sustainable business model from product design to service delivery, and across all levels of an organization’s operations, she says.
In the U.S. alone the sustainable business market will double over the next four years, reaching $60 billion in 2014 up from $28 billion in 2010, according to a new report from analyst firm Verdantix. The biggest spenders will be power utilities and automotive firms, followed by high-tech engineering and industrial engineering.