Sustainable Business Model Examples

Depending on who you ask, there are two prevalent definitions of a sustainable business model.

The first definition posits that a sustainable business model is one that creates value for all stakeholders without depleting the resources that produced it.

The second interpretation is much simpler and one that many are more familiar with.

In this context, the company prioritizes sustainable, positive, long-term impact by striving to balance economic, social, and environmental pillars. 

With those definitions in mind, below is a look at some sustainable business models from companies in a variety of industries.

PepsiCo

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With 53% of revenues coming from food, and the remaining 47% coming from the beverage. PepsiCo is a Food and Beverage Empire that in 2017 made over $63 billion in revenues. North America Beverage segment represented 33% of those revenues. 58% of its revenues were in the US. The company distributes its products via direct-store-delivery, customer warehouses, and other distribution networks.

PepsiCo’s business model is built around a belief that there is an opportunity to improve how the world produces, distributes, consumes, and disposes of food and drink.

The company’s strategy permeates every aspect of its circular value chain to reduce GHG emissions, recycle packaging materials, and rejuvenate vital water supplies.

In 2021, the company announced the pep+ (PepsiCo Positive) strategy to drive positive action for people and the planet.

Among many other initiatives, Pepsi wants to improve farming communities that provide crucial raw materials and inspire customers to make sustainable choices that benefit the planet.

Nike

nike-vision-statement-mission-statement
Nike’s vision is “to bring inspiration and innovation to every athlete in the world.” While its mission statement is to “do everything possible to expand human potential. We do that by creating groundbreaking sports innovations, by making our products more sustainably, by building a creative and diverse global team, and by making a positive impact in communities where we live and work.”

The “Move to Zero” sustainability campaign is part of Nike’s commitment to reduce its carbon emissions and waste production to zero.

Importantly, Nike realizes that its sustainable business model can only work if the entire industry works together.

To that end, the company plans for its factories in Vietnam, China, and Indonesia to be 100% solar-powered by 2025.

Nike is also revolutionizing its manufacturing and fabric production processes.

For one, it is reducing the size of its cardboard shoe boxes so that less tissue paper and wrapping are required.

The company also eradicated single-use plastic bags at the end of 2021 and has implemented a system where customers can identify which of its products contain more than 50% reused materials.

Ford

ford-swot-analysis
Founded in 1903 by Henry Ford and is the fifth-largest family-owned company in the world. Ford is a globally recognized brand in the automotive industry for a couple of reasons. First, Henry Ford is well-known as the inventor of the production line and thus the modern automobile industry. Today, Ford has also maintained relevance as the seventh-largest car manufacturer worldwide, selling a range of passenger cars, trucks, and vans.

Ford has a broad sustainability strategy based on three key aspects:

  1. Hard data – Ford employs a team of climate scientists to predict its future carbon emissions. Then, the team works backward to determine the acceptable fuel efficiency that all future vehicles need to demonstrate.
  2. Short-term and long-term challenges – while Ford is taking advantage of the hype surrounding electric vehicles, it is also enhancing its internal combustion engine fleet with advanced technologies and innovation.
  3. Pragmatism – Ford acknowledges that while 9 billion will be on the planet by 2050, this is not an open invitation for it to sell more cars. Here, Ford is placing the needs of the planet and society above revenue and market saturation.

Ben & Jerry’s 

Ice cream brand Ben & Jerry’s has a long history of utilizing a sustainable business model.

As early as 2002, the company was implementing carbon offset programs and investing to increase the efficiency of its supply chains and manufacturing operations.

The company’s main environmental impact stems from dairy cow emissions on farms in which it sources milk and cream.

Like Ford, Ben & Jerry’s has established science-backed GHG reduction goals which are verified by third parties.

Specific actions to reduce emissions include no-till cropping, crop rotation, and investment in manure separators and digesters that limit the amount of methane gas produced.

Key takeaways:

  • Sustainable business models are those that create value for stakeholders without depleting the resources that produced them. Other definitions incorporate value creation that is sensitive to environmental, social, and economic factors.
  • PepsiCo’s sustainable business model permeates every aspect of its value chain to change the way people consume and dispose of food and drink. Nike’s model relies on industry cooperation and alignment to be successful.
  • Sustainability at Ford involves setting realistic, relevant, and science-based objectives. Ice cream manufacturer Ben & Jerry’s has also utilized scientific research to develop ways to reduce methane emissions.

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