Sustainability as a Business Model

Abstract

Reports from the Intergovernmental Panel on Climate Change (IPCC) (2007), United Nations Environment Programme (UNEP) (2005), and the Worldwatch Institute (WWI) (2009) paint a bleak picture of the impact of human activity on the natural environment (see Table 3.1). While society and business rely on a healthy environment, the way humans use resources and the amounts used are irrevocably damaging the environment, such that humanity’s very life support systems are under threat (McPhail 2008). Referencing the work of eminent British economist Sir Nicholas Stern (2006), Espinosa and colleagues conclude that “[t]he possibility that complete environmental collapse is now decades rather than millennia away makes it in everyone’s interests to re-think fundamentally the structures and processes which have brought us so close to the brink” (Espinosa, Harnden, and Walker 2008, p. 645). McPhail (2008) concludes that bus iness-as-usual is not working. Incrementally improving the environmental efficiency of existing businesses— producing the same amount of products but with fewer resources and less energy, waste, and emissions—is not enough. Ryan (2008) argues that the level of reduction required in greenhouse gas emissions points to the need for rapid systemic change in business systems because the traditional management paradigm is inherently limited in its ability to address ecological degradation effectively (Shrivastava 1995) and traditional business models exacerbate the problems (Stubbs and Cocklin 2008a).