Sustainability Business Models: Interface and Bendigo Bank

Introduction

Stubbs and Cocklin's 2008 article, Conceptualizing a "Sustainability Business Model," published in Organization & Environment, addresses the growing pressures on firms to rethink sustainability in fundamental ways. The authors argue that organizations will need to transform the paradigms under which they operate rather than simply adding new provisions to existing frameworks. Specifically, they contend that the dominant neoclassical business model cannot be adequately supplemented with additions sufficient to build genuinely sustainable enterprises. Instead, new systems, new metrics, and new culturally embedded collaborative capabilities must be introduced at the firm level to achieve true sustainability. The article uses two case studies to support these claims, and this review discusses the authors' arguments alongside those case studies.

The Neoclassical Model and the Case for Change

The business world has long operated under the premise that the primary objective of all business activity is to maximize profits and the corresponding returns to a firm's investors. Under this model, social or environmental objectives are secondary at best — addressed only when required by regulation or law, and even then sometimes overlooked. For example, if the fine for violating an environmental regulation was smaller than the profits generated by the offending activity, some companies would strategically pay the fine rather than alter their operations.

However, as scientific understanding of ecological issues deepens and political pressures surrounding environmental concerns intensify, the relationship between the business environment and the natural environment is rapidly evolving. Stubbs and Cocklin argue that this evolution demands more than incremental policy adjustments — it requires a wholesale transformation of how firms conceptualize their purpose and measure their success.

Interface Inc.: Environmental Sustainability in Practice

The first case study examines Interface Inc., the world's largest manufacturer of commercial carpet, commanding over one-third of total market share in the industry. The company operates seventy-five sales locations and maintains manufacturing operations in more than twenty countries (Stubbs & Cocklin, 2008). Interface was selected to illustrate how departing from the traditional neoclassical model can lead to meaningful environmental sustainability, even within a natural resource-intensive industry.

The company's CEO came to recognize that Interface was making a significant negative impact on the environment at scale. In response, the company launched a comprehensive initiative to reduce waste across both internal operations and the broader external environment. It redesigned its processes to improve energy efficiency and reduce dependence on oil-based inputs. The company also actively sought opportunities to incorporate recycled materials and to substitute materials with lower toxic effects on humans and natural systems. An outreach program was developed to build stakeholder support for sustainable practices throughout the supply chain. Notably, this initiative was not primarily motivated by profitability — yet the company remained profitable throughout its transition, demonstrating that environmental responsibility and financial viability are not mutually exclusive.

Conclusion

Together, the two case studies presented by Stubbs and Cocklin illustrate that genuine sustainability requires a fundamental transformation of business paradigms, not incremental additions to existing models. Interface demonstrates that a resource-intensive manufacturer can pursue aggressive environmental goals without sacrificing financial performance, while Bendigo Bank shows that redefining who counts as a stakeholder can unlock forms of social value that conventional banking ignores. Both examples support the authors' central thesis: that a new conception of the business model — one that embeds sustainability at its core rather than treating it as a compliance obligation — is both necessary and achievable.

References

Stubbs, W., & Cocklin, C. (2008). Conceptualizing a "Sustainability Business Model." Organization & Environment, 103–127.