- Blog Posts
- Sustainable business
- Posted in Default
- By admin
- Date May 10th, 2012 15:41
Sustainable businesses seem to be everywhere. What makes them so isn't always apparent. Below is a graphical look at the range of sustainable businesses.
Model 01: Sustainable businesses are profitable.
By standard definition sustainable businesses at least break even. Below is a sustainable business when only profit is considered. Society and ecology are not considered and might be increasingly damaged as profits grow. This could be a cigarette company.
Image 1: Sustainable business - Model 01
Model 02: Sustainable businesses are profitable and don't limit society.
As early as the 1960's CSR programs emerged narrowing the definition of sustainable businesses to only include those which have at least a break even impact on the societies they reach. At a minimum these companies follow international labor laws, have equal opportunity hiring practices, safe working conditions, and pay fair wages. This could be a chemical plant producing solvents according to all international laws and regulations.
Image 2: Sustainable business - Model 02
Model 03: Sustainable businesses are profitable, don't limit society and don't harm the environment.
Not limiting society is a fairly modest goal. The above chemical company could still be releasing allowable emissions or dumping allowable chemicals into sewage systems. Some progressive companies have evolved to align their CSR strategies to minimize their environmental impact. This could be any company that invests in carbon offset or clean-up programs.
Image 3: Sustainable business - Model 03
Model 04: Sustainable businesses profit when the environment thrives.
While the initiatives in Model 03 are valuable, profits are not directly linked to environment health. We believe there is still room for improvement and we share The Natural Step's view of sustainable business as shown here.
Image 4: Sustainable business - Model 04
Using this Model, before considering profits sustainable businesses must first consider how they impact the environment. Impact must be measured holistically, including end products and services, processes, and operational activities. The system works on the premise that businesses must be inherently invested in what supports them. All businesses are supported by people - clients and employees. Without clients, no revenue can be made. Without employees there is little to sell. What supports people? Their environment. If the environment isn't healthy, neither are people and sick people don't work well. We measure every company using this model. A corporate law firm impacts the environment just as a manufacturer does - the only difference is rate and scale. At the core, their principles are entirely the same. Both consume energy (minimal vs. huge amounts) and raw materials (stationary and workstations vs. minerals and machinery) to provide products and services (advice vs. end products) and generate waste (domestic vs. industrial) while doing so.
Few companies are aligned with Model 04 because historically there has been little leverage for anything but Model 01 businesses. Collectively we've been deferring the need to run Model 04 businesses since the Industrial Revolution. Since 1750 there has been enough space and raw materials to allow businesses to push their waste, pollution, and chemical legacies onto future generations. Things are changing. Exponentially increasing government regulations have created leverage for Model 04 businesses. Space is running out and raw materials are becoming scarcer. Still, the greatest source of leverage is the power of individual consumers. With every product or service you buy, you validate the business and values that create them. When consumer patterns change, businesses need to adapt or fold. GIGA exists precisely to aggregate consumer demand for healthier products and materials. Start asking businesses about their 300 year plans. Ask every brand how they impact the environment. Companies who follow Model 04 will have an answer to both questions. As leverage increases, Model 04 businesses will become default standards and early adopters will reap the benefits.
Food for thought.
What Model does your company most resemble?
What Model do the brands you support most resemble?
We want your feedback.
What brand do you think comes the closest to using Model 04? Reply
What's your 300 year plan? Reply