The ambition of the Swedish Government is to facilitate the development of green innovation within the Swedish economy supported by the transition of the energy and material processing, retail, transport and other service sectors towards climate neutral solutions. The guiding principle is to comply with the 1.5˚C vision of climate change goal as agreed in the Paris agreement and the guiding targets of the UN Sustainable Development Goals. This calls for innovative business models and sustainable solutions.
Despite many attempts to create and understand sustainable business models (SBMs), the conditions for their success and sustainability remain poorly understood. Businesses, policy makers and the society at large still have diverse and vague understanding about what sustainable business models are. Understanding the nature of SBMs is crucial for businesses and policy makers on different governance levels.
People usually associate the notion of “sustainable business models” with any generic environmental work and improvements, such as waste recycling. Much less is understood about other sustainability practices, such as remanufacturing and reuse, circular manufacturing and dematerialisation of consumption. At the same time, new business models, such as product-service systems, sharing and functional sales struggle to overcome market barriers and scale-up.
The term “circular economy” is rather often voiced in media and generally associated with waste management practices focusing on material recycling or energy recovery.
The QUEST Project aims to map, analyze, and synthesize the current state of knowledge about sustainable business models (SBMs). We seek to better understand which actors and under what conditions enable more sustainable business solutions. For this we need to learn who are the most important players in products’ value chains, what contextual factors and actor interactions are effective in enabling SBMs.
What is a value chain? It is a range of activities needed to create a product or service – from raw material extraction, production and use to end of life management. This also includes systems for procurement, supply, distribution, marketing and communication between different actors – business, customers and authorities.
What is a business model? – In “smart” words, it is a formalized description of how an organization creates, delivers, and captures value for its stakeholders. In “simple” words, it is a description of what a business does to achieve its goals (usually to make profit).
What is a Sustainable Business Model (SBM)? – Sustainable business models focus on a broader understanding of value creation, beyond economic and shareholder value. For example, such businesses realize that their activities inevitably affect the society and the surrounding environment. Sustainable business models are designed to mitigate such negative effects and generate value along economic, environmental and social dimensions.
Organizations can exploit different strategies and practices for sustainable business models. For instance, these could be reducing material and energy intensity of products and services, remanufacturing old products into new, reusing old products or parts of products and recycling waste materials into new raw materials.
Funded by the Swedish Environmental Protection Agency
The project is funded by the Swedish Environmental Protection Agency (Naturvårdsverket) as part of their Environmental Research Program (Miljöforskningsprogram) in the area of Society (samhälle) and part of the cluster on Sustainable Consumption (Syntesanalyser om hållbar konsumption).
Learn more about the Swedish Environmental Protection Agency’s ongoing work – https://www.naturvardsverket.se/