Sustainability challenges such as rising disparities and the degradation of our natural livelihoods make the transition to a more sustainable economic system increasingly desirable. To make this transformation, the private sector is a key player with the most resources and capabilities. But technological progress toward sustainability is increasingly incremental, and many companies are struggling to meet their sustainability goals. Therefore, innovation at the business model level is needed to align incentives and revenue mechanisms to bring sustainable solutions to fruition.
Business model innovations are expected to deliver better returns than product or process innovations, and sustainable business models could have the additional advantage of higher risk mitigation and resilience, as well as additional diversification and value creation opportunities. To reap these benefits, companies are increasingly becoming aware of the need to implement sustainable solutions.
Numerous business model innovations fail, however. This has severe economic impacts on companies and leads to significant delays in the introduction of sustainable solutions.