Sustainability innovations refer to novelty, not only in technology but also in processes, operating procedures and practices, business models, and thinking.
Since the societal context for business is changing, the capability to adopt new business models has been identified as an important source of sustainable competitive advantage and key leverage to improve the sustainability performance of organisations.
With sustainability issues like growing inequality and the deterioration of our natural livelihood making the transformation to a more sustainable economy increasingly desirable, companies need a new approach to expand the opportunity for new growth and value creation.
Adopting sustainable business model innovation (SBM-I) is then suggested as one-way companies can yield higher returns than product or process innovations, and can also have the additional benefit of higher risk mitigation and resilience.
To realize these advantages, organisations need to become increasingly interested in implementing sustainable solutions; they need to reimagine business models for sustainability, manage new measures of performance and reshape business ecosystems.
They are encouraged to explore various strategies or design themes to innovate their business models for sustainability.
While this might look a bit hard for any management team, the future of the company and society depends on doing so. It is the only fundamental approach to realize innovations for sustainability which is now well recognized as a driver of business success and competitive advantage at the micro-level.
Although a few companies have tried to systematically understand sustainability limits and vulnerabilities, they risk diminishing their future competitiveness. This is not entirely surprising because for a long time companies have relaxed their ambitions towards sustainable competitive advantage and shifted focus on shareholder returns.
This means that we have a long way to go if sustainability and sustainable competitive advantage have to fuse coherently in a way that can guide management thinking and corporate action in the decade ahead.
Companies, therefore, need to urgently adopt sustainable business models that enable resilience, durability, and value creation through changing business, societal and investor contexts.