- Introduction
In today’s world, businesses must prioritize environmental care and respect for human rights to
remain competitive and profitable. Companies that choose an ethical and sustainable path gain
a competitive advantage, while those that do not risk losing customer trust, which could lead to
financial failure. However, sustainability is not an easy path—it requires significant investment.
As a result, some branding and marketing managers may resort to unethical practices such as
greenwashing or manipulating facts and data to obscure their shortcomings. Consequently,
identifying genuinely sustainable companies is a complex process that requires thorough
analysis and comparison of various resources to make an informed decision.
- Definitions
To fully understand business sustainability, it’s important to first clarify key definitions related to
sustainability
2.1 Sustainability definition
McGill University defines sustainability as “meeting our own needs without compromising the
ability of future generations to meet their own needs” (McGill.ca)[1]. In most definitions,
sustainability encompasses not only environmental concerns but also the responsible use of
social, economic, and natural resources. Additionally, it involves promoting social fairness and
economic development alongside environmental protection.
2.2 Sustainable business model innovation
The primary goal of a sustainable business model is to help businesses develop more
sustainable economic systems and achieve their sustainability objectives. Today, this concept
has evolved into a significant source of competitive advantage for companies. Sustainable
business models build on traditional models but incorporate specific traits and objectives,
including sustainability-related values and goals. These models either (1) include sustainability
as a core element or (2) integrate sustainability into product development, value creation,
delivery, or value capture processes.
However, due to challenges such as limited knowledge of new technologies or poor working
conditions, some businesses may only achieve partial sustainability. Martin Geissdoerfer et al.
define sustainable business models as those that “incorporate proactive multi-stakeholder
management, create both monetary and non-monetary value for a broad range of stakeholders,
and hold a long-term perspective” (Geissdoerfer et al., 2018)[2].
Sustainable business model innovation can be categorized into four types:
- Sustainable start-ups: New organizations built around long-term, sustainable business
models. - Transformation to a sustainable model: The modification of an existing business model to
become more sustainable. - Diversification into sustainable models: The emergence of a new, sustainable business model
within an organization without significant changes to existing models. - Acquisition of a sustainable model: The integration of a newly acquired sustainable business
model into an organization (Geissdoerfer et al., 2018)[2]
2.3 The concept of eco-innovation (EI)
Eco-innovation refers to the development, integration, or adoption of novel products, processes,
services, and organizational strategies that reduce environmental impact, pollution, and risk.
This concept not only drives the creation of new products and processes for businesses and
individuals but also encourages the efficient use of resources to minimize environmental harm.
Eco-innovation promotes environmental stewardship and helps achieve sustainability goals byimplementing new ideas, habits, and creative products or processes. Popularized by theEnvironmental Technology Action Plan (ETAP), eco-innovation focuses on incorporatinginnovation into products, production processes, business practices, and services across theirlifecycle to reduce environmental risks and resource depletion (Fulgence et al., 2022)[3].
It is also important to note that public-private partnership initiatives and tax exemptions can
further enhance eco-innovation by improving environmental conditions without hindering
economic growth (Fulgence et al., 2022)[3]
2.3 Arabesque Company (Analyzing sustainability of companies)
Arabesque is an asset management firm that assesses companies based on Environmental,
Social, and Governance (ESG) criteria and sustainability performance. ESG policies often
reflect the quality of a company’s strategy, corporate purpose, and management capabilities.
Arabesque requires companies to publish two specific types of carbon emissions data: Scope 1
(direct emissions) and Scope 2 (indirect, owned emissions) figures, reported in tonnes, across
all operations. For data to be considered current, it must come from a reporting period within the
past two years.
Arabesque believes that sharing detailed emission data and setting clear sustainability targets
not only holds shareholders and climate activists accountable but also raises awareness among
employees, motivating them to seek out information and act responsibly (Bansal, 2021)[4].
References
[1] mcgill.ca
https://www.mcgill.ca/sustainability/files/sustainability/what-is-sustainability.pdf
[2] Martin Geissdoerfer, Doroteya Vladimirova, Steve Evans, 2018. Sustainable business model
innovation: A review.
https://www.sciencedirect.com/science/article/pii/S0959652618318961
[3] Otu Larbi-Siaw, Hu Xuhua, Ebenezer Owusu, Abigail Owusu-Agyeman, Brou Ettien
Fulgence, Samuel Akwasi Frimpong, 2022. Eco-innovation, sustainable business performance,
and market turbulence moderation in emerging economies
https://www.sciencedirect.com/science/article/abs/pii/S0160791X22000409
[4] Tima Bansal, 202. How green is Tesla, Really?
