Corporate Social ResponsibilityStrategySustainability

Building sustainability in

Why is sustainability on top of the agenda today?

Consumers have changed their expectations of companies; they now expect firms they do business with to operate in an ethically sound manner. This is a cultural shift form mass consumerism that shapes the way we interact with each other, and in business. That is why sustainability is also increasingly a key area for typical B2B firms, ranging from small service providers to large multinationals. If you don’t care about how you affect the world, people will take their business elsewhere, and top candidates will seek employment with competitors that are better corporate citizens.

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Sustainability is a multi-faceted part of modern businesses that want to be good corporate citizens. How are your business operations contributing to society above and beyond creating shareholder value?

Prerequisites for including sustainability measures in management accounting

In order to include sustainability in your KPI reports you need to know exactly what you are trying to achieve. The way to do that is to integrate your sustainability goals into your business model. Let us do that by a use case; say you are the leader of a new startup providing co-working office space in suburban areas around major cities with lots of commuters (this is a business idea I’ve been thinking about for a while but not really acted upon – feel free to steal it and make it reality). We’ll make a very simple business model canvas for this story.

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A case study business model canvas created with bizplan.one tools for a co-working business.

Here’s the starting point for our business model, including a separate section for Sustainability. Let us now do a quick check on the other parts of the business model to see how we can integrate sustainability thinking into the core workings of our co-working business.

Customers:

  • Seek customers who value protecting the environment. Give free tips on saving individual footprint at home and work.

Value proposition:

  • Change to “improve your carbon footprint while saving time and money too”

Relationships:

  • Seek partnerships with environmental protection organizations.
  • Target marketing channels favored by people who are environmentalists.

Revenue:

  • Seek “green business” funding sources
  • Add crowdfunding to capital strategy
  • Add paid events on “living green” in the different office spaces. Extra revenue stream, thereby improving risk profile.

Cost:

  • Reduce lease costs for office spaces by limiting parking etc.
  • Developing sourcing strategies that will reduce cost by selecting high-growth clean alternatives.

Take-away points

  • Develop a business model that takes sustainability into account as a core business measure
  • Analyze each facet of your business model to see how sustainability can be improved, and how it can help drive competitive advantage
  • Develop key measurements for risk governance that ensure your sustainability efforts are aligned with your financial goals and that your core business helps drive both financial and societal value.

 

Now, go to bizplan.one and make your own business ideas more sustainable.

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