As corporations increasingly embed sustainability into their long-term plans and decision-making processes, new business models are emerging that promise to deliver financial and non-financial (such as environmental and societal) values while working toward a net-zero emissions economy.
A new paper by Volans, commissioned by the Business and Sustainable Development Commission, calls these “Breakthrough Business Models.” As Volans chairman John Elkington writes in an article on Medium: “As leaders learn to ‘Think Sustainably,’ they will also need to learn to ‘Think X,’ shorthand for ‘Think Exponential’ … And in Thinking X, business leaders need to focus on four key domains where the X agenda is already playing out.”
Tesla is an example of one of these exponential companies. As the report says, Tesla and its founder Elon Musk are “thinking big and betting big” on the company’s mission to accelerate the global transition to clean energy by integrating cars, batteries, grids and solar power.
The four “exponential” characteristics of breakthrough business models, as detailed in the report, are:
- Social X: delivering positive impacts for people.
- Lean X: maximizing the value of all forms of capital, including human and natural.
- Integrated X: connecting economic, social and environmental systems.
- Circular X: making inputs and outputs as circular as possible.
The Volans report coincides with the launch of Project Breakthrough, co-developed by Volans and the UN Global Compact, the world’s largest sustainable business platform. The 8,800-plus business-led “change platform” aims to showcase companies that are using these new business models and emerging technologies.
“Project Breakthrough is really about bringing disruptive thinking to companies,” said Volans’ Jacqueline Lim in an interview. “We think about disruption in three areas. One, the exponential mindsets that are necessary to drive change to reach the scale that the UN’s Sustainable Development Goals demand. Second, we think that disruptive technologies are going to be playing a huge, crucial role in terms of helping us achieve the SDGs. And finally we need business models that are fit for purpose and give businesses a new language when they think about sustainability.
“It’s no longer about trying to build a business case for sustainability. There are huge opportunities — financial and non-financial — in evolving these new business models.”
In addition to Tesla, another example of a breakthrough business model is a partnership between European energy company Enel, the UK’s National Grid and Japanese automaker Nissan. The three organizations are working to turn vehicles into mobile power sources by allowing drivers of Nissan Leaf battery-powered cars and e-NV200 electric vans to sell excess energy during periods of peak demand.