Sustainable Business Model: The Impact of Sustainability

¶ … Sustainable Business Model: The Impact of Sustainability on Shareholders

The objective of this study is to consider the need for adopting sustainability as a business model and to present evidence both for and against sustainability as part of the company's business model.

Sustainability

The Economist writes that the phrase 'the tripe bottom line' was first stated by the founder of a company called SustainAbility in 1994, John Elkington. Elkington posited that companies needed to compare three bottom lines including the first for measuring traditional corporate profit, or that of the profit and loss account and secondly, that of the company's "people account" which measured the level of social responsibility of the company. Finally, the third bottom line was stated as the company's level of environmental responsibility. (Paraphrased, 2009) These three formulate the triple bottom line of "profit, people, and planet." (The Economist, 2009, p.1) Alex Steffen states that while society is successful there are major flaws in the footprint society leaves on the planet. Presently, there is an unsustainable level of footprint left on the planet in that we are using the one earth at the level 10 planets would be utilized. This is unsustainable. While some have more than enough, others do not have enough to survive. The global population density is the primary reason for lack of sustainability. It is necessary that society formulate a sustainable way of living. Presently the knowledge needed to build a sustainable society is not possessed by people today. Steffen states that the way that we live in cities needs to be addressed by creating denser and more livable cities. Leave aside "what is natural to be natural." (Steffen, 2005) Transit systems need to be reformulated as well as do buildings for living including those that generate their own electricity and use recycled water. Included in this are what Steffen terms 'green roofs'. Sharing means using less, for example car pools is one way of becoming more sustainable. Knowing and monitoring the amount of energy used is one way of becoming more sustainable. Methods of constructing buildings is another way of becoming more sustainable. Neobiological design is one method of design that is focused on sustainability. According to Ray Anderson, the corporate sector is the only sector large enough to lead toward sustainability. Anderson says sustainability means taking from the earth only what can be replaced in the earth. Anderson states that he has been described as the world's greenest CEO. Impact is the product of people, affluence, and technology. Technology is abusive in too many ways to quantify. Andersen states his business used the Environmental Impact Equation I=PxA/T1 creating impact and I=PxA/T2 which decreases impact. In the new industrial revolution, what is taken must be replaced and abusive practices replaced by benign practices in order to reduce the impact to zero. The problem with the triple bottom line is that "the three separate accounts cannot easily be added up." (The Economist, 2009, p.1) This is because of the difficulty in measuring the "planet and people accounts in the same terms as profits -- that is, in terms of cash." (( The Economist, 2009, p.1) While it is possible to measure the total cost of a spill by an oil tanker it is not possible to determine the cost associated with relocating entire communities to clear forests or the cost associated with children being deprived of being educated so that they can begin working at a very young age.