Decent Work and Economic Growth

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| Editors: Walter Leal Filho, Anabela Marisa Azul, Luciana Brandli, Pinar Gökcin Özuyar, Tony Wall

Sustainable Business Models

  • Nancy BockenEmail author
Living reference work entry
DOI: https://doi.org/10.1007/978-3-319-71058-7_48-1

Synonyms

Related Terms

Product service systems (PSS); Green business models; Social business models; Circular business models; Sharing business models

Definition

Sustainable business models (SBMs) draw on economic, environmental, and social aspects of sustainability in defining an organization’s purpose, use a triple bottom-line (people, profit, planet) approach in measuring performance, consider the needs of all stakeholders rather than giving priority to shareholder expectations, treat “nature” as a stakeholder and promote environmental stewardship, and encompass a system, as well as a firm-level perspective (based on Stubbs and Cocklin 2008).

Background

This entry introduces the concept of sustainable business models. It starts with a brief overview on the concept of business models more generally, followed by explaining business models for sustainability, or synonymously, sustainable business models. This is followed by the linkages between the sustainable business model concept and the Sustainable Development Goals (SDGs). Next, manifestations of sustainable business models and potential sustainable business model tools are described. The entry ends with recent developments in the field, such as experimentation, collaboration, and emerging concepts such as the sharing economy and circular economy.

Emergence of the Concept

Business models have gained significant ground and popularity in literature and practice due to increasing competitive pressures and sustainability concerns, quickly changing industry landscapes, and, correspondingly, the need to search for new ways to gain competitive advantage (Massa et al. 2017). Business models matter to business – and other forms of organizations such as nonprofits and social enterprises – as they can be an important source of firm survival and competitive advantage.

The business model concept appears to have origins in areas such as e-business, information systems, strategy, and management and has risen to prominence in the late 1990s with the advent of the Internet in the business arena and the steep rise of the stock market index for technology-heavy companies (Osterwalder et al. 2005). New technology such as the rise of the Internet allowed different types of businesses to form changing the rules of how business is done. The quick development of technology was met with an emergence of business model research. It has been argued that a technology can only be really successful in business if accompanied with the right business model (Chesbrough 2010), so that technology or the product could not the sole differentiator anymore. To illustrate: “the same idea or technology taken to market through two different business models will yield two different economic outcomes. So it makes good business sense for companies to develop the capability to innovate their business models” (Chesbrough 2010, p. 354).

According to McGrath (2010), the business model concept offers strategists a novel way to consider their options in uncertain and fast-moving environments. It is also recognized that companies should be trialing multiple business models to remain competitive in the long term as focusing on just one might put future competitiveness at risk (Andries et al. 2013). However, the business model innovation process is not as innate to business operations compared to product and technology innovations with more predictable stage-gate-type of processes: “companies have many more processes, and a much stronger shared sense of how to innovate technology, than they do about how to innovate business models” (Chesbrough 2010, p. 356). Hence, because of the strategic importance and difficulty to innovate business models in established business in increasingly unpredictable business environments coupled with sustainability pressures, it is not surprising that this field has risen in prominence of late in research, business, and policy debates.

What Is a Business Model?

Business models describe the way business is done (Magretta 2002). They describe the design or architecture of how value is proposed, created and delivered, and captured by business (Richardson 2008; Teece 2010). A business model goes beyond changing the product and service offerings for the customer – business model innovation involves changing “the way you do business” rather than “what you do” and hence must go beyond process and products (Amit and Zott 2012).

There are many manifestations and depictions of business models: focusing on activities and values, providing a conceptual template of a business, or providing a process-oriented perspective. A business model can be described as an “activity system” that describes the business model design or architecture: the content, structure, and governance of key business activities (Amit and Zott 2012). It may also be described from a value-based perspective (e.g., value proposition and customer orientation) (Osterwalder et al. 2005). It can take the shape of a conceptual template, such as the business model canvas by Osterwalder and Pigneur (2010), which contains the different building blocks of a business: value proposition, resources, activities, partnerships, customer relations, segments, channels, cost structure, and revenue streams. A simplified version amalgamates these blocks and focuses on the value proposition at the core (product-service offering), value creation and delivery (resources, activities, partnerships, customer relations, segments, channels), and value capture (cost structure and revenue streams) (Richardson 2008; Bocken et al. 2014). Finally, business model (innovations) can be described as a process, for example, of experimentation (Ries 2011), effectuation (Sarasvathy 2001), or organizational leadership (Chesbrough 2010).

Business model innovation is about creating value for companies, customers, and wider society by replacing or modifying outdated business models (Osterwalder and Pigneur 2010). It can provide a pathway to competitive advantage if the model is sufficiently differentiated and hard to replicate for others like incumbents and new entrants like start-ups (Teece 2010). Business model innovation can be more incremental (adjustment or adaption) or radical (improvement or full redesign) (Lüdeke-Freund et al. 2016). Change can take place to one or multiple building blocks of the business model simultaneously (Bocken et al. 2018), where the more radical changes focus on changing most building blocks at the same time (e.g., value proposition, targeted customers, channels, cost, and revenue streams). Finally, business model innovation can be more defensive, accommodative, or proactive in nature (Schaltegger et al. 2012). Defensive strategies are often more incremental and are typically a reaction to business’ (perceived) cost-constraints to protect existing revenue streams. Accommodative strategies cautiously integrate environmental and social objectives (e.g., environmental production or health and safety) not questioning revenue logics and core business yet, while the more proactive strategies are often more radical and integrate environmental or social objectives as part of the core business logic to contribute to sustainable development of the economy and society (Schaltegger et al. 2012).

What Is a Sustainable Business Model?

Business models for sustainability (BMfS) or sustainable business models (SBMs) have become of interest because of rising sustainability concerns coupled with concerns for competitiveness, due to quickly changing business landscapes with fast-growing start-ups enabled by Internet-based technologies and new technologies (Massa et al. 2017). Key sustainability concerns have now been summarized under the UN Sustainable Development Goals (SDGs), 17 global goals set by the United Nations General Assembly as a universal call to action to end poverty, protect the planet, and ensure that all people can enjoy peace and prosperity (UNDP 2018). These provide business with a potential platform to build innovative solutions from. At the same time, issues such around poverty, resources, and the urgency of mitigating climate change (IPCC 2018) are the greatest challenges of all time, but they can also provide a platform for business innovation and generating new forms of value, together with societal actors (Porter and Kramer 2006).

SBMs have the potential to act as a driver for innovation for sustainability in business as the SBM lens gives the opportunity to take a holistic view on how business is done (Bocken et al. 2013; Magretta 2002; Stubbs and Cocklin 2008). As an ideal type, SBMs draw on economic, environmental, and social aspects of sustainability in defining an organization’s purpose; use a triple bottom-line approach in measuring performance; consider the needs of all stakeholders rather than giving priority to shareholders’ expectations; treat nature as a stakeholder and promote environmental stewardship; and encompass a systems as well as a firm-level perspective (Stubbs and Cocklin 2008). Within the sustainable innovation spectrum (Adams et al. 2016), sustainable business models allow for a broader perspective than innovating single products, creating collaborative ties beyond the firm (e.g., with customers and suppliers) (Fig. 1). Business models and business model innovation thus link different firms and their products and services and by nature involve some form of collaboration.
Fig. 1

Business models within the sustainable innovation spectrum. (Source: Developed from Konietzko et al. (2018) based on Ceschin and Gaziulusoy (2016))

SBMs thus allow for a holistic view on how business is done, involving concerns of multiple stakeholders, including sustainability metrics, and internalizing environmental and societal concerns (Bocken et al. 2013; Stubbs and Cocklin 2008). This highlights a stark contrast compared to purely conventional profit-oriented business models focused on profit generation, financial performance, shareholder value optimization, and a firm-centric motive. Nonetheless, sustainable business models as a prerequisite must be economically sustainable (Bocken et al. 2013; Boons and Lüdeke-Freund 2013). Sustainable business model innovation thus focuses on identifying solutions that allow firms to capture economic value while generating environmental and social value and in doing so establishing an internal business case for sustainability (Bocken et al. 2013; Schaltegger et al. 2012).

Sustainable Business Models and the SDGs

The SDG agenda calls upon businesses, governments, and civil society actors equally to pursue a more sustainable pathway forward, and many would argue that the private sector has “strengths to bring to bear in delivering on the SDGs, including innovation, responsiveness, efficiency and provision of specific skills and resources” (Scheyvens et al., p. 371), while again others argue that “many large companies are also lobbyists for policies antagonistic to sustainable development, so engagement with business has to be done cautiously” (Scheyvens et al., p. 373).

The 2030 Agenda for Sustainable Development, which was adopted by all United Nations Member States in 2015, provides a shared vision for peace and prosperity for people and the planet, now and into the future, thus developing pathways to global sustainable development. The 17 Sustainable Development Goals (SDGs) are at the core of this agenda and serve as an urgent call for action by all countries – developed and developing – in a global partnership (See https://sustainabledevelopment.un.org/sdgs). The SDGs were developed from the Millennium Goals (signed by leaders of 189 countries in 2000) (See http://www.sdgfund.org/mdgs-sdgs) to build a better world for people and our planet by 2030. Adopted by all United Nations Member States in 2015, they present a call for action by all countries to promote prosperity while protecting the environment, recognizing that ending poverty must go hand in hand with strategies that build economic growth and address a range of social needs such as education, health, equality, and job opportunities while tackling climate change and working to preserve nature (See https://sustainabledevelopment.un.org/about).

The SDGs have been adopted by nations worldwide and the role of business may be intuitively linked to the more economic SDGs. However, while in conventional business model innovation, the most obvious SDGs to be targeted would be Goal 8 (decent work and economic growth), Goal 9 (industry, innovation, and infrastructure), and perhaps Goal 17 (partnerships for the goals), the impact of sustainable business model innovation could be much broader, with the potential to include all SDGs. However, business would need to overcome short-term thinking and planning with a narrow focus on finances, in order to focus on a longer-term sustainable development agenda, which may not yet be in the nature of typical business (Scheyvens et al. 2016).

SBMs as an ideal type have the opportunity to bring together economic, social, and environmental value through the role of business (Bocken et al. 2013). It has been argued that SBMs can have an impact at a wider systems scale (e.g., Stubbs and Cocklin 2008) and solve issues in the regulatory and NGO domain (Schaltegger et al. 2016) and fill institutional voids (Agarwal et al. 2018). So, business can contribute to big goals such as Goal 13 (climate action) and Goal 11 (sustainable cities and communities) through the power of business, which, in the case of multinational companies, even transcends country boundaries. Indeed, Porter and Kramer (2006) already introduced the concept of “shared value” as an opportunity to solve institutional voids around health, poverty, education, and the environment while creating markets in conjunction with others.

Although one may dispute whether business is the best actor to fill institutional voids (Scheyvens et al. 2016), some companies are already successfully compensating for a lack of institutional structure and constructing new markets that are inclusive of BoP segments (Agarwal et al. 2018). Yunus et al. (2010) discuss social impact through the business of Grameen Bank, which, through microfinance, supported businesses to alleviate poverty through social business model innovation. They trace the development of Grameen’s expertise in formulating social business models, which require new value propositions, value constellations, and profit equations, similar to business model innovation. Such initiatives (which started before the SDGs) contribute to both social and economic objectives and therefore potentially multiple SDGs. Yet other businesses, such as those focusing on solar power, might focus predominantly on one SDG, like Goal 7 on affordable and clean energy. Finally, some businesses seek to combine economic, environmental, and social goals in their business models, such as Interface Networks Programme, collecting and supplying fishing nets in fishery communities as a raw material for carpets, together with those communities, manufacturer Aquafil, and the Zoological Society of London (ZSL), thus potentially contributing to several SDGs, such as Goal 1 on eradicating poverty, Goal 8 on decent work, Goal 12 on responsible consumption and production, Goal 14 on life below water, and Goal 17 on partnerships (Bocken et al. 2016; Lüdeke-Freund et al. 2016). Another example is Solar Sister, which, by combining a clean energy technology (solar) with a deliberately women-centered sales network, seeks to eradicate energy poverty by empowering women with economic opportunity (Lüdeke-Freund et al. 2016). These are just a few of the many examples of sustainable business model pursuits that could support the SDGs.

While companies might not consciously innovate for the SDGs, the SDG agenda has been developed in collaboration with business (Scheyvens et al. 2016). However, an opportunity-seeking mind-set may be needed (Porter and Kramer 2006) rather than trying to work around trade-offs, in order to successfully embed the SDGs in the sustainable business model innovation process in the short term with the lack of direct policy pressures in many of these areas.

Sustainable Business Model Types

The origins of sustainable business models can be found in work on “conventional” business models (e.g., Osterwalder et al. 2005; Amit and Zott 2012), but also work on social business models (e.g., Yunus et al. 2010), green business models, and product-service systems (Mont 2002; Tukker 2004). Such separate streams of business model literature, as well as emerging sustainability practices (e.g., eco-design; product take-back systems for reuse), contribute to the emerging field of sustainable business models (Bocken et al. 2014).

Perhaps the most well-known early “sustainable business model groupings” take a service orientation, product-service systems or PSS (Tukker 2004), which represent variations of product-service combinations (e.g., leasing, rental). PSS are of potential environmental interest, because when companies retain product ownership or extend product responsibility, they remain accountable for performance, incentivizing product life cycle concerns (e.g., material reuse, energy reduction) and longer and more intense use of products (Tukker 2004, 2015). However, to achieve the desired impact, business models need to be designed as such (Mont 2002), and environmental impact must be planned and traced (Manninen et al. 2018). Whereas service models or PSS may have many manifestations, Tukker (2004) classifies these broadly according to more product-, use-, or result-oriented types: Product-focused strategies may involve high levels of service and extended product warrantees; use-oriented strategies involve leasing and renting products rather than product ownership; and result-oriented strategies are about paying per use or unit of performance rather than direct product sales. Potentially, the more use- and result-oriented types have the greatest positive impact on sustainability, because consumers (or business actors) pay for access to a service or a certain level of performance rather than being dependent on products (Tukker 2004).

To expand the list of sustainable potential business models and expand the research agenda beyond PSS and capture emerging practices in the field, sustainable business model archetypes have been developed (Bocken et al. 2014), which were classified according to more technological, social, and organizational types, as per the broad categorization in Boons and Lüdeke-Freund (2013). Subsequently, various typologies and lists of circular and sustainable business models have been generated by practitioners (e.g., Clinton and Whisnant 2014) and academia (e.g., Bocken et al. 2014; Lüdeke-Freund et al. 2018a, b; Ritala et al. 2018), expanding the list of sustainable business model examples beyond services. Some sustainable business model types have been classified according to the triple bottom line of taking a more social, environmental, or economic focus (Ritala et al. 2018; Lüdeke-Freund et al. 2018a), while others have been structured according to technical, social, and organizational focus (Bocken et al. 2014; Boons and Lüdeke-Freund 2013).

While there are various typologies on SBMs, the emergence of the full diversity of SBMs in large business is still lagging behind and focuses on “win-win situations” (e.g., creating value from waste), rather than more radical approaches around sufficiency and slow consumption (Ritala et al. 2018).

Sustainable Business Model Tools and Approaches

Several tools and approaches have emerged that may support practitioners in the development of sustainable business models. They have taken the form of conceptual tools, assessment methods, and (card) games, for example, and are often focused on idea generation or assessment of new sustainable business models. The tools also take similar focus points to the manifestations of business model literature, either targeting the main business model activities (e.g., Amit and Zott 2012), focusing on value (Osterwalder et al. 2005), or business model innovation processes (Chesbrough 2010). More specific to sustainable business models (as opposed to conventional business models) is the focus on sustainability impact assessment. Next, examples of sustainable business modelling tools are broadly described, focusing on idea generation, business model processes, and sustainability assessment.

Idea Generation

One of the most well-known conceptual templates for conventional business models focusing on developing and capturing new ideas is the “business model canvas” by Osterwalder and Pigneur (2010). This canvas maps the key activities associated with innovating the business model. At its center is the value proposition or product/service offering. The flanks of the canvas include the value creation and delivery mechanisms, such as the channels and customer segmentation. At the bottom, the value capture mechanisms (cost structure and revenue streams) can be found. Different “sustainability manifestations” of the business model canvas have emerged such as the triple bottom-line canvas by Joyce and Paquin 2016) and the flourishing canvas by Jones and Upward (2014) and the sustainable business model canvas (Bocken et al. 2018). Figure 2 shows an example of such a template: the sustainable business model canvas.
Fig. 2

Sustainable business model canvas. (Source: Bocken et al. (2018) based on Osterwalder and Pigneur (2010) and Richardson (2008))

While some tools like the business model canvases describe the different elements of a business model, others go deeper into the aspects of “value” of a sustainable business model observed as a key business model perspective (Osterwalder et al. 2005). For example, the value mapping tool for sustainable business modelling was developed to this extent (Bocken et al. 2013). The value mapping tool seeks to create awareness of the value captured, destroyed, missed, and new opportunities associated with doing business, by taking into account the perspectives of different stakeholders affecting, and being affected by the business (ibid.). By creating greater awareness of these different forms of value, new sustainable business model ideas can be generated. The notion of value has also been used in later sustainable business model tool development (e.g., Breuer and Lüdeke-Freund 2017).

Yet, other examples include card type of games that can be used in workshop formats to stimulate new idea generation for sustainable business model innovation (e.g., Breuer and Lüdeke-Freund 2017). The use of cards and mapping exercises is also common in the broader field of sustainable (and eco-) innovation (Adams et al. 2016) (Fig. 3).
Fig. 3

Value mapping tool. Developed from Bocken et al. (2013)

Process

Various tools and approaches are emerging focusing on the process of sustainable business model innovation. Some use design approaches and prototyping for sustainable business modelling (Baldassarre et al. 2017; Geissdörfer et al. 2016). Others describe various aspects of the process of experimenting with new business models (Antikainen et al. 2017; Weissbrod and Bocken 2017). These may take a more planned (e.g., Ries 2011) or effectual approach (Sarasvathy 2001). Yet others (e.g., Whalen and Kijne 2018) describe the role of serious games and gamification as means to develop sustainable business models. Games and gamification allow users to learn more deeply from experiences (Whalen and Kijne 2018) and can therefore be suitable to teach users about the difficulties and opportunities associated with sustainable business model innovation.

Sustainability Assessment

Next to idea generation, the area of sustainability assessment of new sustainable business models is developing, which is important to understand the real impact of sustainable business model innovation in business. Such assessment methods typically use life cycle thinking or analysis (e.g., Manninen et al. 2018; Tukker and Ekins 2017). Despite there not being one specific approach to assess the impact of new sustainable business models, life cycle assessment and thinking have been applied to assess the impact of some sustainable business models (e.g., Lindahl et al. 2014; Zamani et al. 2017). Recent developments on assessment (e.g., Bocken et al. 2019; Manninen et al. 2018) focus on understanding the relationship between new business models and existing ones to understand the real impact of SBMs. It is important to understand the wider impact of sustainable business models to understand whether these really contribute to significantly reduced environmental impact or increased societal impact (Wells 2018).

Recent Developments

Despite great interest in SBMs, such business models are not yet mainstream. In particular in large established business, sustainable business model innovations appear to lag behind (see, e.g., Ritala et al. 2018), perhaps because of organizational inertia (Benner and Tushman 2003) and immediate business pressures (Slawinski et al. 2017). In particular, this is the case for more “difficult” innovations focused on slowing resource loops and moving from product sales to services (Ritala et al. 2018). Hence, more work is needed to ensure the wider uptake of such business models. This section discusses recent developments and potential areas for future research around experimentation, novel concepts such as circular and sharing economy, collaborative business models, and transitions research and the role of business (models).

Novel Approaches for Experimentation

Experimentation is not new and originates from fields of natural science, but has been heralded as a key business model innovation approach (Chesbrough 2010; Weissbrod and Bocken 2017) with foundations in entrepreneurship work (Ries 2011; Sarasvathy 2001). Although, in contrast to natural sciences, situational factors cannot be fully controlled, experimentation practices, such as formulating hypotheses (or assumptions) and deciding on key measures, can guide the sustainable business model innovation process (Bocken et al. 2018; Ries 2011). Yunus et al. (2010) suggest that conventional business model innovation is about challenging conventional thinking, finding complementary partners, and undertaking continuous experimentation, but social/sustainable innovation also adds recruiting social profit-oriented shareholders, and perhaps replacing shareholders with stakeholders, as well as including social profit objectives clearly and early on. Hence, experimentation for sustainability might be more complex, also challenging the core dimensions of business.

Recent developments in the field of experimentation include the focus on novel tools (e.g., Baldassarre et al. 2017; Bocken et al. 2019) and processes focusing on how to experiment with new business models (Antikainen et al. 2017; Bocken et al. 2018). This has also been a focus point in the literature on “conventional business models,” which has described the need for experimentation in start-ups (e.g., Ries 2011) and large business (e.g., Chesbrough 2010; Andries et al. 2013). Tools and approaches for sustainable business model experimentation seek to bring together economic, environmental, and social objectives and include necessary “sustainability checks” to see whether experimentation is heading the company in the right direction (Weissbrod and Bocken 2017).

Future work could advance ways in which companies can experiment with sustainable business models and effectively integrate the SDGs into innovation pathways, this contributing to a positive bottom line as well as sustainable development. Also, the role of business experimentation in a wider context (e.g., a city) and collaborative experimentation may be explored.

Novel Concepts Such as Circular Economy and Sharing Economy

Novel sustainability themes include the rise of the “sharing economy” and “circular economy” paradigms. The sharing economy paradigm is characterized by a rise in novel “sharing” business model concepts (e.g., car and home sharing) and heralded in popular books for its potential to drive sustainable consumption (Botsman and Rogers 2010), through sharing fewer products between more people and increasing the levels of peer-to-peer services. The “circular economy” paradigm, focused on closing, slowing, and narrowing resource loops, has roots in the 1960s but recently picked up by policy and business (Blomsma and Brennan 2017; Bocken et al. 2016; Schmidt-Bleek 1998; Stahel and Reday-Mulvey 1981). It includes several examples from industrial symbiosis up until slowing consumption through the role of business. Both paradigms challenge economic, social, and environmental paradigms and may drive mind-set changes through providing a novel perspective.

The interest in novel paradigms around sharing and circular economy has indeed generated further attention for new business models supporting sharing (e.g., Ranjbari et al. 2018) and circular economy (e.g., Bocken et al. 2016; Kirchherr et al. 2017), which are being applied in a business and wider city context. While perhaps not replacing the sustainable business model concept, new concepts such as circular economy and sharing economy create renewed enthusiasm and involve different research and practitioner communities into the sustainable development agenda, such as innovation and experimentation in the city context (e.g., Ranjbari et al. 2018).

Collaborative Business Models and Ecosystems

Business model innovation is collaborative by nature. At the very least, there is collaboration across business functions within the same organization (Lüdeke-Freund et al. 2016). But, as business models are about creating value for companies, customers, as well as other stakeholders such as the wider society and natural environment (Stubbs and Cocklin 2008), to displace outdated business models (Osterwalder and Pigneur 2010), it typically involves collaborations with others outside business boundaries.

Sustainable business model innovation requires an ecosystems approach of identifying the necessary stakeholders to work with, rather than a shareholder-centric approach (Bocken et al. 2019; Stubbs and Cocklin 2008; Yunus et al. 2010). For example, NGOs or governmental stakeholders might share the same value and problems and could act as collaboration partners to simultaneously push for solving the same problems (Yunus et al. 2010).

Whereas the collaborative nature has been recognized in (sustainable) business model research, the interlinkages between business models also deserves attention. The “ecologies of business models” approach builds on the idea of ecosystems and the metaphor of ecological dynamics in natural ecosystem, by analyzing the symbiotic and competitive relations between new and existing business models to understand the true impact of business (Bocken et al. 2019). For example, to what extent do clothing sharing business models prevent new clothing sales? Is a car sharing business model really replacing cars or is it leading to more car (and less public transport) dependencies in a city context?

Future research can contribute to understanding how to collaborative in order to achieve sustainable development, also linking into SDG 17, for instance, on developing partnerships, to tackle issues well beyond business boundaries such as poverty and climate change. Moreover, an ecosystem or “ecologies of business models” approach can help understand the true nature and impact of sustainable business model innovation. By creating awareness of real environmental and societal impact, collaboratively, better solutions can be identified.

Transitions Research and the Role of Business (Models)

Transitions research recognizes the need to create impact at the micro (individual), meso (e.g., business), and macro levels (institutional levels) (e.g., Sarasini and Linder 2018). Businesses and associated business models represent just one facet of this landscape of change, but can potentially transform consumption patterns at the individual micro level, change the wider business landscape (meso level), and move in the macro-level territory (solving issues beyond the business scale and challenging policies). However, to achieve degrowth needed to address pressing climate and resource issues (IPCC 2018) through a business model lens, more coordinated efforts are needed across these levels (Wells 2018).

Understanding the ways in which business can contribute to transitions to sustainable development thus operationalized through the SDGs is essential. The subsections on “Collaborative Business Models and Ecosystems” and “Novel Approaches for Experimentation” demonstrated that collaboration with different actors and experimentation – a key feature of transitions research – are important future directions in sustainable business model research. Moreover, the circular economy and sharing economy paradigms may be potential levers to engage new research and practitioner communities into the sustainable development debate, by exploring topics such as sharing and circular cities.

If business is to be put on equal footing in terms of guiding the transition to policy makers and civil society actors (Scheyvens et al. 2016), more research is needed to guide such a transition and understand the precise role (and boundaries) of business. The potential role of sustainable business models in wider transitions (e.g., at a city scale) is being discussed in the recent literature (e.g., Sarasini and Linder 2018) and deserves further work. There are key roles for start-ups, established business, and understanding the interplay between those in broader transitions (Hockerts and Wüstenhagen 2010; Schaltegger et al. 2016). For example, to what extent can start-ups change the landscape? To what extent does policy need to intervene? How can policy and business experiments be combined? Moreover, there are ample opportunities to better coordinate work on business- and policy-driven experiments to accelerate sustainability transitions (Bocken et al. 2018).

Future work can focus on better understanding SBMs and the role of business in wider transitions, for example, to support degrowth and absolute reductions in environmental impacts (e.g., Wells 2018) while avoiding negative rebound effects (Zink and Geyer 2017). The roles – and boundaries to the roles – of business in sustainable development transitions may also be explored.

Conclusions

Sustainable business models (SBMs) present an ideal type of business model that focuses on generating positive environmental and societal impact through the role of business. SBMs draw on economic, environmental, and social aspects of sustainability in defining an organization’s purpose, use a triple bottom-line (people, profit, planet) approach in measuring performance, consider the needs of all stakeholders rather than giving priority to shareholder expectations, treat “nature” as a stakeholder and promote environmental stewardship, and encompass a system, as well as a firm-level perspective. Unfortunately, SBMs are far from mainstream, and more work is needed to accelerate the emergence of more radical and challenging business model innovations that slow resource loops and lead to degrowth. To accelerate sustainability transitions, recent sustainable business model work focuses on tools, assessment, innovation processes, and experimentation, as well as collaborations and understanding the role of business in wider sustainability transitions. Future research may expand on this and focus on understanding the role of multi-stakeholder collaboration and experimentation with a pivotal role for business (models) and investigating the interplay between micro, meso, and macro actors in experiments. A deeper understanding of the opportunities and barriers to sustainable business model innovation in relation to achieving the SDGs is needed. Finally, a deeper understanding is needed of the wider “ecology of business models” in different contexts (e.g., cities, countries) to drive systems-wide change for sustainable development.

Cross-References

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.The International Institute for Industrial Environmental Economics (IIIEE)Lund UniversityLundSweden
  2. 2.TU Delft, Industrial Design EngineeringDelftthe Netherlands
  3. 3.School of Business and ManagementLappeenranta University of TechnologyLappeenrantaFinland

Section editors and affiliations

  • Edurne A. Inigo
    • 1
  1. 1.Business Management & Organization, Social Sciences GroupWageningen University and ResearchWageningenThe Netherlands