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Sustainable Business Models Find Success

Innovative sustainable business models are connected to greater profitability according to new research by MIT and the Boston Consulting Group. The MIT-BCG research on the state of sustainability management has been ongoing since 2010, and a clear trajectory has been identified. A growing number of respondents are reporting profit from sustainability from (23%-37%) and nearly half of respondents have changed their business models in light of sustainability opportunities.  Some of the major drivers for sustainable business model innovation include:

  • Resource scarcity and rising costs;
  • Meeting growing consumer expectations; and
  • Attracting and retaining young talent.

Those companies that find ways to address sustainability issues such as these in a transformative and profitable way are referred to in the report as “Sustainability-Driven Innovators.” Innovators enhance profitability by innovating business models, management practices, and market infrastructures based on current or future sustainability pressures. The study determined that this group was twice as likely to report profits from sustainability activities. Here are a few things that Sustainability-Driven Innovators are more likely to do than their counterparts:

  • Develop a business case for sustainability;
  • Focus on the impacts of sustainability beyond cost (such as market share and competitive advantage);
  • Work closely with stakeholders (with customers as a central focus); and
  • Drive sustainability through skillful organizational change.

In short, if you want to make a profit from sustainability, you must change the way you do business and integrate sustainability concepts into your corporate DNA. If you don’t, you just might find yourself coming up short against your competitors who do.

Click here to access the full report.