5 Criteria for a Sustainable Business Model

It’s one thing to critically assess how today’s dominant business model is not sustainable; it’s another thing to design one that is. As sustainability champions, we need to have a positive vision of the pot of gold at end of the sustainability rainbow. We need to be able to respond to a “put up or shut up” challenge with a description of a sustainable business model that is better for the environment, society, and the company.

In my August 3, 2010 blog, I described four critical attributes of today’s way of doing business that make it unsustainable. We are facing serious constraints as we experience a rising demand from an exploding world population for increasingly scarce resources. Today’s linear take-make-waste business model is not designed to handle this reality. In fact, it is culpable for contributing to its unsustainability.

When guiding companies on their 5-stage sustainability journeys, we need to know where we are going—what a sustainable company in Stage 4 or 5 looks like. It behooves us to have a blueprint for a sustainable business, one that is simple enough that it is a handy guide to knowing when we’ve arrived at our destination.Here are five characteristics of a sustainable, cyclical, borrow-use-return business paradigm, overlaid on the 3-nested-dependencies model of a sustainable society, described in my July 20 blog.

1.  Radical resource productivity
Companies stretch natural resources by increasing productivity for a given amount of a resource by factors of 5, 10, or even 100. They work to eliminate dependencies on materials and energy from resources dug from the earth’s crust. This commitment addresses issues of overharvesting and depletion of natural capital.

2.  Investment in natural capital
Companies restore, maintain, and expand ecosystems to sustain society and business needs.

3.  Ecological redesign
Companies use closed-loop production systems in which waste from production and end-of-life disposal is treated as a resource and reused, rather than sent to a landfill. Companies acknowledge they can’t throw things away because there is no “away.” They also work to eliminate man-made toxic chemicals from their production processes.

4.  Service and flow economy
Companies replace their goods with services. They lease products and their solutions instead of selling them. When the product becomes obsolete or is unable to produce its service, the company takes it back and recycles or remanufactures the returned product.

5.  Responsible consumption
Although it sounds like an oxymoron, responsible consumption reduces the demand for stuff and its associated pollution and waste, as graphically explained in The Story of Stuff. The company promotes responsible consumption by educating consumers so they can make more informed decisions about their purchases based on products’ location of origin, the labor conditions under which they were made, their ingredients, their packaging, their life-cycle ecological footprints, and other sustainability-related criteria. New forms of company ownership and profit sharing ensure company success is more equitably shared among employees and other stakeholders. The company avoids any inadvertent interference with people’s ability to meet their basic needs.

The sustainable borrow-use-return model enables companies to perform as described by William Donough and Michael Braungart in Cradle to Cradle.

  • “Buildings that, like trees, produce more energy than they consume and purify their own waste water.
  • “Factories that produce effluents that are drinking water.
  • “Products that, when their useful life is over, do not become useless waste but can be tossed onto the ground to decompose and become food for plants and animals and nutrients for the soil; or, alternately, they can return to industrial cycles to supply high-quality raw materials for new products.
  • “Billions, even trillions, of dollars’ worth of materials accrued for human and natural purposes each year.
  • “Transportation that improve the quality of life while delivering goods and services.
  • “A world of abundance, not one of limits, pollution, and waste.”

Isn’t that an exciting business model? You bet. And it is achievable. It is a win-win-win for the environment, society, and the company. Next week, we’ll look at four stepping stones that take companies from an unsustainable business model to this sustainable one.


Please feel free to add your comments and questions using the Comment link below.


9 replies
  1. Jennifer Cocker
    Jennifer Cocker says:


    I am writing a piece for my MSc in Sustainability for Business and Community about sustainable business and I was just curious if you think there are any businesses that are adhering to the 5 Criteria for the sustainable business model? Or even the four minus the responsible consumption?

  2. Bob Willard
    Bob Willard says:

    Jennifer, no company has completely satisfied all five criteria. Most companies are focusing on one or two of the criteria, especially “radical resource productivity” because that yields the fastest low-hanging fruit of eco-efficiency benefits. Interface is frequently used as an example of an enterprise that is working on all criteria. Ray Anderson’s book, “Mid-Course Correction,” uses excellent diagrams to show how Interface is striving to become the “prototypical company of the 21st century” by 2020 by addressing all five. Hope this helps. Best wishes for your MSc research and thesis. Bob

  3. Arnold
    Arnold says:

    Dear Bob,

    I came up your blog when I was looking for criteria for sustainable business models (SBM’s) because I am writing a thesis about the transition from normal BM’s to SBM’s and what they key succes factors of this transition are. Now is my question: what are your references for the five criteria as you’ve put them in your blog and what do you think are succes factors or barriers for this transition?


  4. Bob Willard
    Bob Willard says:

    Thanks for your question, Arnold. I’ve been wrestling with the same one for about twelve years. This blog was an interim attempt to describe the attributes of a truly sustainable business. Since then I have been working with TNS Canada and others to describe how we would know a sustainable company or business model if we saw one. The Future-Fit Business website describes that project, which is defining a science-based set of performance goals for a critical set of sustainability indicators for a sustainable future-fit company. I am also working with the Strongly Sustainable Business Model Group to develop a canvas to enable companies to (re)design a business that is strongly sustainable. You might want to check out that second website, since it sounds like it aligns most closely with your research. Bob

  5. Arnold
    Arnold says:

    Dear Bob,

    Thank you for your reaction. Last month I’ve been busy with trying to develop a model to identify a sustainable business model (for the food and beverages industry). Next to your five criteria I combined the 8 archetypes (Bocken et al., 2014) of a SBM and the 4 phases model of sustainable entrepreneurship (Van Tilburg et al., 2012) into one model. The model is very interesting but I am struggling with drawing lines between sustainable and non-sustainable. Now is my question to you, do you think that a firm has a SBM when it only meets one of your criteria? Or do you think it should meet at least f.e. three of the five criteria?



  6. Bob Willard
    Bob Willard says:

    Arnold, a firm would be more sustainable if it only met a couple of the criteria, but to be truly sustainable it would need to meet all five criteria. Having said that, we should provide companies with best-available science that supports the criteria, and a set of performance goals on key indicators that would define a truly sustainable company. I have been working on a Future-Fit Business Benchmark project for over two years that will do that. Stay tuned … Bob

  7. Fiona
    Fiona says:

    Bob & Arnold – I came across your blog when I was looking for criteria for sustainable business models (SBM’s) because I am writing a thesis on SBM for electricy sector. I find this topic of Arnold very intersting about the transition from normal BM’s to SBM’s and what they key succes factors of this transition are. Now is my question: what are your references for the five criteria as you’ve put them in your blog and what do you think are succes factors or barriers for this transition?

    I find ths discussion very intersting

  8. Fiona
    Fiona says:

    Dear Bob and Arnold – I came across your blog when I was looking for criteria for sustainable business models (SBM’s) because I am writing a thesis about a SBM framework for the electricity sector. It will be great if you can share your recommendations of your thesis Arnold – a transition from normal BM’s to SBM’s.

  9. Bob Willard
    Bob Willard says:

    Fiona, my source for the five characteristics was chapter 1 of Natural Capitalism by Amory Lovins, Hunter Lovins, and Paul Hawken. You might also be interested in the Strongly Sustainable Business Model (SSBM) project headed by Antony Upward (see http://www.ssbmg.com/). I am part of that effort and we are aligning that work with the Future-Fit Business Benchmark work (see http://futurefitbusiness.org/). By the end of this month, a beta version of the benchmark will be available for public comment and I will post a blog that invites people to do that. The key success factors motivators for companies making the transition are: 1) a compelling articulation of the downside risks of not making the transition; 2) a compelling articulation of the upside opportunities of the company does make the transition; 3) relentless pressure from important stakeholders for companies to make the transition. Bob

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