Sustainable Business Models

What It Is and How to Make It Work

Gumi & Company
4 min readMar 2, 2021


Sustainable Business Models


One of the many challenges many businesses face is communicating their business case to ensure sustainability, which is the essence of innovation.

A sustainable business model must capture economic, social, and environmental value for a variety of stakeholders.

This article discussed what sustainable business models mean in the simplest term, how to achieve one, and the steps to take.

A business model can be described as organized and value-oriented. It is how a company creates value for itself without failing to deliver products and services for its target audience.

Why do you need your business to be sustainable, and how can you achieve this model?

The recent trend against plastic products and irresponsible consumption is just one of the signs that sustainability is becoming more important to buyers. Yet, you will ask, “what does that have to do with my business, and how can I create — or shift to — a sustainable business model?

However, before you make that switch, you must understand what sustainability is, what it means to have a sustainable business model, and why you need it at all.

What is Sustainability?

In standard terms, sustainability is to retain a specific state irrespective of the varying conditions. It can also be described as a business’s ability to adapt or survive irrespective of compromising challenges in the economy, society, and business.

What makes this definition relevant to business development?

Lia Colabello, the managing principal of Plastic Pollution Solutions, suggests no difference between a sustainable business model and a business model that prioritizes sustainability.

In her words, “A sustainable business model is what every business leader hopes to achieve: that the business will turn a profit quickly and stay afloat for the long term,” on the other hand, “A business model that prioritizes sustainability is one that, at a minimum, considers all stakeholders, assesses and addresses environmental impacts, and is transparent and thorough in its reporting.

Having considered these definitions by these innovators, there must be elements of a sustainable business model. These elements will determine if this sustainable business model will work. They are:

1. It is profitable.

As a business, it is important to consider what makes the business valuable. This means a sustainable model is one with a well-defined value proposition, niche, and sustainable power.

2. It is for the long run.

A trendy business that relies on limited resources may be profitable for a few months, but how will it fare in a year or two? A sustainability business must never understate the availability of resources and pricing.

3. It uses resources that it can utilize for the long term.

You cannot have a sustainable business model without using sustainable resources. Finite resources or exceptionally high prices limit many business activities.

4. It gives back.

One theory is that a truly sustainable business model gives as much as it takes. This concept is called the cyclical borrow-use-return model. Rather than taking from the earth, a sustainable business “borrows” resources with the intent to replenish them. This concept of responsible consumption is one that both companies and consumers can promote and practice.

Now, What is a Sustainable Strategy?

Sustainable strategy understands the flow of ‘in’ and ‘out’ — not just cashflow, also but the tangible and intangible resources required to create a product or service.

Hence, effective sustainability strategies start with the organization’s purpose and encourage questions like:

  • Why does the organization exist?
  • What problem is it solving?
  • How is it going to improve the world, environment, and society?

How Can You Create a Sustainable Business Model?

1. Plan out your resource usage.

Make a list of the raw materials you will need. This list will vary dramatically by business type. SaaS companies, for example, do not require the natural resources that clothing brands do.

Think about where your materials might be sourced. Who is making or harvesting them? How are they being sold? And many more.

2. Consider alternative forms of company ownership.

The traditional top-down business model can create narrow wage gaps between those at the highest rungs at the ladder (the CEO, other C-level executives, founders, managers) and those at the lowest (the laborers tasked with creating raw materials or carrying out the manufacturing processes). Including everyone in your sustainability goals can help you keep your business on track and give those who have typically disadvantaged an enormous say.

3. Engage your customers.

Your dedication to sustainability may result in higher prices for your consumers, and that’s OK. Let your customers know why they’re paying more for your products in a compelling blog post, series of posts, or dedicated brand story page. Include them in the decisions of the company.

Certainly, sustainability in a business cannot be sidetracked. It is a phenomenon that every business owner must consider at every phase of the business. However, if you are considering implementing a sustainable business model, you must understand that though you may incur a short-term cost, you must see the long-term picture.

For a compelling brand value — sustainability will always sell.



Gumi & Company

Products | Digital Transformation | People Solutions