What is Sustainable Business
Defining sustainability is extremely complex, and scholars have not yet found a precise and general definition. For this reason, analyzing sustainable business models might be helpful to frame a sustainable business. Indeed, sustainable business models lie at the core of companies and allow them to embed sustainable practices and follow sustainable processes in its three dimensions – environmental, economic, and social. Through sustainable business models grounded on the circular economy’s cornerstones, every company can create value both for themselves and their stakeholders. They operate to reach their business goals and make profits, while, at the same time, promote the conservation and regeneration of the environment and watch over the society around them.
Sustainable business models are based on the three Ps of sustainability – profit, people, and planet. These three elements should all be considered when implementing sustainable processes, so companies can respect the world around them while also gaining economic success.
The development throughout the years
In the last years, there has been an increase in sustainability in businesses. In fact, more and more companies have embraced actions aiming at environmental conservation, and an increasing number of executives have committed to making their company more environmentally friendly. In 2023, for example, sustainability was one of the main priorities for 65% of the businesses. Most companies prioritize energy efficiency, and about 80% of businesses have internal environmental sustainability goals for the use of energy evolution. Looking at the future, most executives think that, in 2024, the plan for investments in sustainability will increase. Only 14% of top managers think that the investments are likely to decrease, whereas 34% believe that the investment plans for sustainability will not change. Right now, in business, the majority of enterprises tackle the “sustainability issue” from an environmental perspective, whereas the social and economic factors are still a little bit less popular. So, there is still a long way to reach a more “sustainable world”, due to the fact that sustainability is not something that a business reach once, but it is a constant approach to the business reality, this approach requires long-term plans and constant action. Nevertheless, the business sector is showing that the first steps in a good direction have been taken.
Reconceiving and redefining the product life
To implement more sustainable businesses, it is fundamental to reconceive and redefine the entire life of the product (or service) the company offers.
New technologies and the use and analysis of data can be helpful in this endeavor, since they have the power to impact and reshape the way society operates, interacts, and consumes, and, therefore, also the way in which products (or services) are designed and supply chain is organized. Digital tools, indeed, can both boost businesses’ efficiency and profits and make them smarter, adjusting to consumer needs and changing markets conditions.
At the same time, business leaders need to think about a more sustainable economy. The shift to a low-carbon economy will heavily rely on technological innovations. However, transitioning to renewable energy alone will not allow businesses to achieve carbon reduction at the needed level. Enterprises are required to rethink how to both design and produce their products, to do business in new and better ways.
The design stage of a product (or service) is very important, 80% of the environmental impacts of a product are linked with the decision made at the early stage. Therefore, sustainable product design and the implementation of circularity in the product’s value chain will reduce its environmental footprint, but also lower cost and improve resource use efficiency. Moreover, with the reconceiving of the supply chain, businesses can also make ethical choices, which will foster the “social” and “economical” aspects of sustainability.
References
- Modello di business sostenibile: cos’è e come si fa? – HENRY & CO. (henryandco.it)
- The Future of Corporate Sustainability—Even In A Tough Economy (forbes.com)
- Why 2024 is the year sustainability develops a business case | World Economic Forum (weforum.org)
- The future of business is digital and sustainable. Here’s why | World Economic Forum (weforum.org)