Sustainable business models

Sustainable business models

Sustainable business models are frameworks that help to create, deliver, and capture value for business’ stakeholders, making sure that the natural, social and economic capital it relies on is not depleted. The six models can be used: the Triples Bottom Line (TBL), The Five Capitals (5C), Natural Capitalism,  Cradle to Cradle (C2C), The Circular Economy, and the Balanced Scorecard (BSC).

The Triple Bottom Line (TBL) is an accounting framework consisting of three elements, namely, planet, profit, and the people. The people include employees, the labor involves, and the community where the business is done. The “planet” shows that a firm tries as much as possible to reduce its ecological footprint (Dentchev et al., 2016). TBL businesses see profit as part of the business plan. Sustainable companies recognize that “profit” is not opposed to the planet or people.

The 5C framework offers a basis in which sustainability is understood in terms of the economic concept of wealth creation. From 5C model, there are five types of sustainable capital: natural capital which is any stock producing goods and services, human capital consisting of people’s knowledge, health, and skills, social capital made of institutions that aid to develop human capital, manufactured capital consisting of goods which contribute to the production process and financial capital that enables the other types of money to be owned and traded.

Natural capitalism is a framework of sustainable development that not only protects the biosphere but also improves competitiveness and profits (Dentchev et al., 2016). The journey to natural capitalism entails four significant shifts: shift models that are biologically inspired, move to a solution-based business model, reinvest in natural capital, and a dramatic increase in the productivity of natural resources.

The Cradle to Cradle model mimics the regenerative cycle of nature where the waste is reused. The trash from one process is used in other methods such that nothing is wasted. The goal of C2C is to create a cyclical process instead of the linear one like the cradle to grave model. The C2C methodology is built on the concept that “waste=food” (Dentchev et al., 2016). The model suggests that the industry has to protect and enrich the biological metabolism of nature.

The circular economy model of business sustainability involves sharing, repairing, reusing, and refurbishing existing products as long as possible. The application of this model helps to reduce pressure on the environment, increases competitiveness, and stimulate innovation. The model has planned obsolescence where a product is designed with a limited lifespan so that the consumers are encouraged to purchase it again.

The (BSC) is a management tool that supports the successful implementation of corporative strategies. BSC is a promising starting point where the company’s management system can include environmental and social aspects (Dentchev et al., 2016). The benefit of this model is that it provides the organization with the ability to determine the contribution of sustainable developments to their goals.

J+J Flooring Group

J+J is a construction company that offers a range of products and services that meet the needs of the customers. The company deals with Kinetex textile composite flooring, Luxury Vinyl Tile (LVT), among others. The company embraces the C2C and 5C models of analyzing the sustainable performance of a business. The group offers the Environmental Product Declaration (EPD) for its products and Health Product Declaration (HPD) for all Kinetex products. The two documents give full transparency on a product and its ingredients, beginning from the sourcing of raw materials.

The company endorses the C2C model by having 50% post-consumer recycled content in all the Kinetex products. A single box of Kinetex equals 492 plastic water bottles, and one 24×24 tile is equivalent to 27 plastic bottles. The careless disposal of plastic water bottles has resulted in great danger for marine life. Kinetex is making significant use of what might have otherwise been harmfully discarded. The company also embraces the 5C model as it is the EPA Green Power Partner. J+J Flooring Group is committed to the use of renewable, clean energy for electricity and hence reduce the carbon content. In ten years, the company has reported a 28.7% reduction (see appendix A). Since 2010, the company has been able to achieve a 37.7% reduction in energy use in all its facilities and thus reducing the use of BTU from under 24,000 to under 15,000 (See appendix B).

The company believes in full attention to the potential effects of every aspect of the company’s activities to achieve true sustainability. J+J Flooring Group gauges its progress through measuring its social and environmental performance, and it is also stringent to its financial performance. The organization uses its Campus Environmental Team, manages sustainability daily. Under the leadership of the director of sustainability, the team has representatives from the critical business areas. Another way through which the company endorses the 5C model is by putting its people first who are the human capital. The company also cares about its endowment of natural capital. The resources can later be enjoyed by future generations. The foundation of J+J Group is in preventing the inefficient utilization of natural resources and the protection of the environment.

Being responsible stewards of the environment, J+J Group uses all the resources judiciously and efficiently as much as possible. It prioritizes the reduction of consumption and conservation before recycling. The organization achieves being an environmental leader by continuously improving its environmental objectives, reducing pollution, and abiding by the regulations and requirements of the environment. The use of the 5C model resulted in more meaningful information in the analysis of the sustainable performance of the J+J Flooring Group. The model took into consideration several elements like human capital, natural capital, and human capital, which consequently maximized the financial capital.

The models picked for the analysis of the company are 5C and C2C. The company chose to apply the two models is the J+J Flooring Group, which provides different construction products and services. The 5C models appear more useful according to the results and the information it has offered as it has provided more comprehensive information as well as it has more benefits.

References

Dentchev, N., Baumgartner, R., Dieleman, H., Jóhannsdóttir, L., Jonker, J., Nyberg, T., … & van Hoof, B. (2016). Embracing the variety of sustainable business models: social entrepreneurship, corporate intrapreneurship, creativity, innovation, and other approaches to sustainability challenges. Journal of Cleaner Production.

https://www.totzkeltd.com/jjflooringgroup

https://www.jjflooringgroup.com/sustainability/overview/

Appendix A

Greenhouse gas intensity

Appendix B