Sustainability transformation: Are you ready for the change?

Companies which create truly sustainable businesses will remain competitive in the future.

Click Image to Enlarge

Today most companies don't address the basic sustainability dilemma related to their business models and industries they are operating in. Corporate sustainability activities are still mainly concentrating on enhancing existing operations, such as minimizing energy and raw material consumption and production of waste and effluents as well as enhancing positive impacts on the society. To become truly sustainable, companies need a more fundamental approach that rethinks the whole business idea and business model to drive sustainability in the core understanding the new kinds of business opportunities related to that.

The difficulty of becoming a sustainable business

Today manufacturing companies base their businesses on linear models meaning that they take natural resources, produce products out of them, products are consumed or used and after all disposed when they become obsolete. These companies face the dilemma how to transfer their existing linear business models to become truly sustainable.

To clarify the sustainability dilemma, here are two examples of companies that might optimize their operations for sustainability but struggle to address the core dilemma by doing so:

A company mass-producing products is always problematic from the environmental perspective as its goal is to sell as many products as possible at a low price. Even though it may enhance its processes so that the environmental impacts per product is minimized its business model does not support a broader sustainability goal.

If a company’s business is based on utilizing nonrenewable resources, it may be difficult to make a change to become truly sustainable as the product and industry itself conflicts with the sustainability goals.

Sustainable business model design

To maximize impact and outcomes, sustainability aspects should be integrated to all corporate decision-making, starting from the development of the business idea and business model. These considerations should be an integral part of the strategic planning. Truly sustainable business models consider that the business is not only economically but also socially and environmentally viable.

Depending on industry, that could mean adapting circular economy principles in planning of future operations, products and services. The most conventional strategy is to use fewer raw materials in the production and to increase the energy-efficiency of products. In many cases this is not sufficient and more comprehensive strategies are needed. These can be based, for instance, on innovative service models related to maintenance, repair, refurbishing, remanufacturing, product reuse or product-as-a-service models with focus on creating entirely new kind of value for customers. 

For example, Bugaboo piloted a leasing program ‘Flex plan’ of their strollers and Philips together with Turntoo developed “light as a service” business model where Philips retains control over the items they produce, enabling better maintenance, reconditioning and recovery.

A way forward

Changing a business model is not an easy task and requires lots of effort which is why many companies are struggling with how to start. To make the change easier, companies can start taking small steps. This can be done, for instance, through involving stakeholders in co-creation of new ideas and solutions. In addition, companies can start experimenting and testing hypotheses with low effort and cost instead of having to start large-scale piloting activities. Digital technologies can play a critical role in enabling new circular business models and in facilitating rapid experiments and co-creation across company boundaries.

How to get started?

  • Our advice to companies interested to take first small-scale steps in changing their business to a truly sustainable one:
  • Utilize co-creation across organizational borders in the development of ideas. Share your ideas, use the power of the crowd and be ready to modify the initial ideas.
  • Avoid trying to solve complex problems at once, simplify and split them into better manageable issues.
  • Start with small-scale, low-effort experiments, features can be added later. Adapt an iterative process: be ready to fail and start again with new experiments.
  • Understand the business case: a circular economy solution should create value-add for the customers compared to a traditional way of fulfilling their needs. Such value-add might be different compared to the traditional solution.
  • It is acceptable to copy existing solutions and to do the same thing in a better way or to combine parts of different existing solutions/ideas – don’t re-invent the wheel.
  • Digital tools are enablers, business innovation drives the value - Don’t go technology first!
  • Understand the value chain/network and the ecosystem and your role within it.
  • To change a company’s direction to be truly sustainable requires that the business model is designed from a new basis. The solution is to rethink how to create value simultaneously to customers, environment and the society in a totally different way.

Author: Ira Hanf, Taival Advisory,

HSE | 27.9.2018

Latest articles

Neste Engineering Solutions has performed a dynamic simulation for Kiilto Oy

Neste Engineering Solutions has performed a dynamic simulation for Kiilto Oy, a producer of chemical industry products. The purpose of the dynamic simulation was to get a better understanding of how Kiilto's production facility's polymerizing reactor behaves in possible disturbances. The production facility is located in Tampere, Finland.

Asset Management | 31.1.2019

5 Benefits of Using Ticketing Software

Customers are always inclined toward companies that provide quality customer service. This is something that strongly influences the profitability of your business. In case of poor customer experience, they would be less likely to do business with the company once again or convey their negative experience to friends and family discouraging them to patronize your brand.

Cmms | 29.1.2019

Emission-Free, Efficient and Safe: The Future Urban Construction Site

A lot of work lies ahead for the construction industry: According to estimates, by 2050 two thirds of the world's population will live in large cities. At the same time, the industry is about to see massive changes through macro trends such as electric mobility, digitalization and assistance systems.  

HSE | 29.1.2019

Clariant Partners with ExxonMobil and Renewable Energy Group to Advance Cellulosic Biofuel Research

Clariant, a world leader in specialty chemicals, announced that it has signed a joint research agreement with ExxonMobil and Renewable Energy Group (REG) to evaluate the potential use of cellulosic sugars from sources such as agricultural waste and residues to produce biofuel, which has the potential to play a role in reducing greenhouse gas emissions.

R&D | 25.1.2019

Robots Are What We Make Them

At a Belgian factory, the following sign stands next to a gigantic industrial robot: “This machine has no brain. Use your own.”

Applications | 23.1.2019

It’s About “Time”

At Bentley Systems, we have been talking to our users, especially owners, and it has become clear that despite our collective best efforts, there is a gap in the market.  Owners need easy access to real-time, accurate, engineering information and they need tools that make it simple to keep engineering data up-to-date, especially those engaged in brownfield and revamp projects.  It takes too much time and effort to gather and verify the information they need to make decisions effectively. And for older plants that do not have 3D models, there is simply no visual way to verify and check information easily.

Partner Articles | 10.12.2018

Maintenance: A Necessary and Important Function in the Future

Euromaintenance 2016 will take place in Athens at the end of May. It is the ideal moment to reflect on maintenance in a European context. Euromaintenance is known as the summit for all involved in maintenance across Europe, it’s the place to be. The conference, with the support of the EFNMS, is the only commercially independent conference covering the topics we deal with in the maintenance world.

EFNMS | 20.5.2016