There is no doubt that climate change has emerged as the biggest threat to humanity, with a demand on all of us to respond to this challenge with ambition and creativity.
In the past, many companies held the belief that sustainability, beyond compliance, only increased costs, did not generate revenue, and therefore, should only be addressed as a matter of corporate social responsibility. However, as awareness of climate change continues to grow, impacts are increasingly felt along supply chains and stakeholders’ demands continue to rise.
Companies are rapidly becoming more aware of the environmental and social impacts of their activities and are searching for ways to do things differently. Leading companies have realised that sustainable business is not just the right thing to do, but by integrating sustainable practices throughout an enterprise, a wide range of tangible benefits can be realised including:
- Improving brand image and competitive advantage
- Reducing risk
- Increasing employee attraction and retention
- Driving innovation
- Increasing productivity and reducing costs
- Attracting investors
Over the next decade, sustainability challenges will provide enormous opportunities for companies to drive innovation as they seek to re-invent products and services in line with stakeholder demands and climate limitations.
New constraints will demand a different approach to design, and will shape how key resources such as energy, carbon, water, raw materials and waste are used in products and processes.
5 Direction for Circular Business Model Design
Already, some of the world’s biggest companies are actively transforming their supply chains to become “circular,” where they are redesigning systems that ‘close the loop’ so that waste is eliminated, and materials stay in circulation as long as possible. Entire industries have started to move towards new business models to ensure they stay relevant in the new sustainable economy. For example, the automotive industry is moving at pace to not only increase the production of electric vehicles, but to also explore leasing models as consumers’ relationship with ownership changes. Similarly, the textile industry has witnessed huge innovation in the design of new sustainable materials and are now also experimenting with rental models.
Given the magnitude of the challenge, there will be opportunities for organisations to collaborate at a scale never seen before. Whether it’s established companies partnering with start-ups, corporate organisations working with NGOs, or even traditional competitors coming together to pool resources in shared supply chains, collaboration will be essential to drive
As we move towards a low carbon economy, business as usual will no longer be an option. Innovation is vital for a successful transition to a green economy and for those companies that move quickly enough, there are huge opportunities ahead.