It will also stimulate ideas for new businesses and forward-looking investment. For example, Hindustan Unilever cut its international sourcing of tomato paste from 100% to under 20% by partnering with Bayer and local companies to localize the inputs and de-risk the supply base. We already see some leading companies taking ad hoc steps toward transforming their business models for improved performance, better environmental and societal sustainability, and sustainable advantage. Sustainable business model (SBM) can support managers to better understand how it can contribution to global sustainable development through firm's value proposition and including methods of value creation, delivery and capture. The overall societal context for business has changed. The incremental value of the project over 15 years is estimated at $760 million; more important, fortified grains and locally branded products will increase the nutritional security of the population. And when it comes to issues of sustainability and societal challenges, managers have often treated these separately from core business operations. It fractures or recomposes value chains in the industry or across industries. Understand how the trend could progress and mature and the potential impacts on stakeholders and the business. A 45,000-ton-capacity facility employing 300 skilled factory workers was built with cofunding by DSM and international donors. By taking these actions, the company will reset the standard for building and promoting sustainable brands in the decade ahead. And then there are disadvantages for any company in moving first, which leads to wait-and-see behaviors across the industry even as the risks and costs of inaction rise. This research examines the relationship between coworking space and innovation, particularly business model innovation (BMI) for sustainable performance. It brought together the CEOs of ten global corporations from five industries to identify cross-sector private-private partnerships to accelerate financial inclusion. Compete by digitally encoding, promoting, and monetizing the full accumulated societal value that is embedded in products and services along the entire value chain, from origin to customer and from cradle to grave. This requires systems analysis to uncover business models that offer the richest competitive and financial options. In our experience, environmental and societal surpluses are not limited to consumer chains but are possible across industry sectors, even in primary industries. Companies also face high and risky upfront investments to fund innovation. In addition to providing employment, the facility is supplied by over 24,000 farmers, and AIF profits above necessary commercial returns go back to the government of Rwanda. Business model innovation has seen a recent surge in academic research and business practice. A case in point is a metals company that further processes the byproducts of its refining operations into roadway aggregates to reduce waste and quarrying demand and improve roadway longevity. Then evaluate how well it deals with the risks, brittleness, and fracture points of today’s business model, how effectively it scales with increasing returns, and how it expands the options for the future under a range of likely industry and societal scenarios. Hence, progress on sustainability metrics is often (and ironically) not closely connected with progress in building sustainable advantage and performance. Few companies are positioned on the far right of the spectrum, a requirement for them to win through the ‘20s. Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. Copyright © 2020 Elsevier B.V. or its licensors or contributors. Consequently, expect the SBM-I effort to define opportunities for “corporate statesmanship” that identify the shared interests of industry players as a basis for collective action. The goal of this exercise is to help the business envision a very different operating context by colliding rich scenarios with the business model to assess its limits, risks, and opportunities for both financial gain and sustainability. It also found that 30% of companies claimed that access to land, water, and energy had a “very significant impact” on their operations and finances. We recommend that the corporate strategy center take responsibility for creating and evolving this picture of the larger context of the business, its translation into the corporate dynamic materiality matrix, and a set of “strategic materiality scenarios” that provoke thinking about the future. This disconnect is both a wasted opportunity and an urgent social priority. For example, capture those inputs produced with cleaner energy, sustainable sourcing practices, preserved biodiversity, recycled content, inclusive and empowering work practices, minimized waste, digitized traceability, or fair trade. SUSTAINABLE BUSINESS MODEL INNOVATION: Sustainability competencies Many companies now have the skills needed to move to the next level of sustainability. Compete by layering onto the value chains of another industry to extend the reach, richness, and societal benefits of products and services for both parties, while at the same time changing the economics and risks of doing so. These ideas can load the corporate development and venturing process, offering companies new vectors for portfolio growth and asset development. © 2018 The Authors. One company worked alongside a national government to strengthen and corruption-proof its social safety nets through digitization and electronic payments. Or create new offerings that enable sharing rather than owning to ensure high utilization of resources and end-of-life value. BCG was the pioneer in business strategy when it was founded in 1963. And going beyond the bounds of a single sector, the European public-private partnership SPRE brings together process industry sectors to fund cross-industry innovations in cement, ceramics, nonferrous metals, minerals, steel, and water. For all the effort to date, we are making little or even negative aggregate progress in essential areas like carbon emissions, even as the societal effects and business impacts are increasingly apparent. Escalating investor and consumer activism, Shared urgency to mitigate the impacts of climate change, Demonstration of an authentic and powerful purpose. SBM-I addresses the limitations of current approaches. We identified a research gap and proposed research questions. We encourage companies to quickly pilot SBM-Is to refine the necessary process and product changes, sources of advantage, and ways to capture value through marketing, sales, and pricing. Applying combinations of the foregoing SBM-I transformations to today’s business models will stretch strategic thinking and expose opportunities for new competitive advantages. It increases returns to shareholders and net positives to stakeholders on environmental and societal dimensions. In other cases, collective action across sectors is needed, for instance, to restructure recycling systems to enable greater penetration of waste-to-value business models. When correctly defined, rather than limiting competitive moves within the industry, collective action becomes empowering by eliminating the constraints that prevent companies from joining up sustainability and sustainable competitive advantage. Are there new or amplified risks? The capability to rapidly and successfully move into new business models is an important source of sustainable competitive advantage and a key leverage to improve the sustainability performance of organisations. Expand societal content. Corporations are making significant progress in addressing sustainability. It may also be possible to reimagine production networks against total environmental and societal costs, or to capture local waste streams as new feedstocks into preprocessing. Companies generally recognize that scarcity can destroy a company’s scale advantages and choke the value chain with significant operational and financial consequences. Such hidden environmental and societal surpluses offer new possibilities for creating business value while being good for the environment and society. Instead of measuring action and progress against a strategic plan, ESG metrics have become an end in themselves. Further along, a cereal producer locks in regenerative-farming suppliers within a preferred radius to create a supplier advantage for sustainable product content, reduced scope 3 emissions, and options in offsets. These insights should inform a company–specific and dynamic materiality matrix. Published by Elsevier Ltd. The process starts by taking combinations of dynamics in the expanded business context and amplifying their materiality.