Depending on who you ask, there are two prevalent definitions of a sustainable business model.
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’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.
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.
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 has a broad sustainability strategy based on three key aspects:
- 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.
- 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.
- 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
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.
- 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.
Key highlights of sustainable business models
- Sustainable business model focused on improving the food and drink production, distribution, consumption, and disposal processes.
- Introduced the pep+ (PepsiCo Positive) strategy to drive positive action for people and the planet.
- Initiatives include reducing GHG emissions, recycling packaging materials, and supporting farming communities that provide raw materials.
- Sustainable business model centered around reducing carbon emissions and waste production to zero through the “Move to Zero” campaign.
- Committed to making products more sustainably and building a positive impact in communities.
- Plans to have factories in Vietnam, China, and Indonesia running on 100% solar power by 2025.
- Broad sustainability strategy based on hard data, short-term and long-term challenges, and pragmatism.
- Employs climate scientists to predict future carbon emissions and sets fuel efficiency goals for all future vehicles.
- Balances advancements in electric vehicles with improvements in internal combustion engine fleet.
- Ben & Jerry’s:
- Long history of utilizing a sustainable business model, implementing carbon offset programs since 2002.
- Focuses on reducing environmental impact, particularly dairy cow emissions on farms.
- Implements science-backed GHG reduction goals, including no-till cropping, crop rotation, and methane reduction measures.
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