Redesigning Business Models

  • SBM
    Shankar Venkateswaran, Chief Sustainability Officer,Tata Group, making his point. On the dais -Pradeep Kashyap, Founder of MART,Madhugar Shukla, XLRI, Poonam Madan (moderator) from INESA

    Becoming sustainable can yield both bottom-line and top-line returns in the long run.

  • Corporate Social Responsibility as practiced by most companies is to contribute towards community development. The emphasis of Sustainable development has been towards conservation of the environment from degradation and deforestation.
  • However, the proposition of a sustainable business model focuses on transforming the existing businesses. The objective of SBM is to encourage existing ‘for profit’ companies to re-design their business models such that they can sustain in the long run. They can sustain the environment related challenges such as resource constraints and also sustain the society related challenges such as social license to operate and yet make profits.
  • In the context of emerging markets, a business cannot be understood as profitable if it does not take care of the larger pressing needs of the economy or vice versa. It becomes indispensable for businesses to revolve their business models around solving larger social and environmental issues such as water.
  • Sustainable Business Models in a country like India can’t be thought of without including the BoP consumers, which form a huge proportion of populace.
  • With rural income growing faster than urban in last five years and subsequent shift of non-consumers of
    past becoming the consumers of present, we need  to find the sustainable ways to handle this growing demand from new consumers.
  • CSR may ensure short-term sustainability but long term sustainability of a company is questionable in light of the fact that CSR deals with only 2% of company’s profit (in Indian context), however, the rest of 98% of the business is taken care of in a sustainable business model.
  • There is a distinction between the three terms – CSR (people > planet > profit), sustainable development (planet > people > profit) and Sustainable Business Models (profit > planet > people).
  • Currently business entities are looking at sustainability from a risk mitigation perspective rather than looking at the opportunistic side of it.
  • Sustainability is a compulsory board room mission and also the importance of managing complexities in organizations to achieve SBM.
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