Re-engineering the business model: leading companies show the way

A company committing to have a net zero carbon footprint by 2050 is transformational. As is targeting to have 50% of sales come from green products by 2015.  Companies around the world are stepping up with solutions-driven strategies built for the long-term. These businesses exemplify the qualities of a new kind of company known as the Transformational Company.

The Transformational Company framework was developed by CBSR as a guide for businesses who recognize the need to scale up their corporate responsibility and sustainability efforts in order to address systemic societal risks, challenges and opportunities. The framework identifies 19 qualities that represent a global consensus on the new standard for sustainability; the consensus highlights the imperative for companies to rethink their core purpose and customer offerings, to focus their efforts on solutions to systemic social, economic and environmental problems, and to go beyond “zero harm” to create net positive benefits.

Transformational companies commit to act outside their own operations, and the foreseeable future, to become word-class sustainability leaders in their region or sector. The following examples provide insight into how the transformational qualities are being mobilized.

Transformational Quality #4 Restorative

Generate net positive benefits for society, the environment, the company and shareholders, advancing local and global resilience.

Kingfisher is Europe’s largest home improvement retail group and the third largest in the world. In 2012, Kingfisher announced a new corporate social responsibility plan called Kingfisher Net Positive.  Net Positive was launched “with an ambition to contribute positively to some of the big challenges facing the world, while creating a more valuable and sustainable business for our stakeholders”.  The initiative is fundamental to the future of Kingfisher, as the company believes the businesses that will succeed in the future are those that today show leadership on the sustainability challenges facing the world.

To achieve the Net Positive objective by 2050, Kingfisher has set targets across the business until 2020 and focuses on four priority areas: timber, energy, innovation and communities. Each of Kingfisher’s priority areas is tightly linked with business goals and achieving each target will create measurable business benefits. Attaining Net Positive will enable Kingfisher to secure crucial resources, unlock new opportunities and drive growth.

np_CBSR_restorative example

Transformational Quality #2 Sustainable Customer Offerings 

Integrate sustainability into the full life cycle of product and service design, use and disposal, and advance sustainability through continuous improvement of core products and services

Phillips is a diversified health and well-being company, focused on improving lives through innovations.  As a world leader in healthcare, lifestyle and lighting, Philips integrates technologies and design into people-centric solutions. Through their EcoVision program, Philips has set targets to increase their sustainable customer offerings. In 2012, Green Product sales increased to 45% of total sales ($15 billion USD), which is on track to reach the target of 50% in 2015.

green products sales_CBSR

To be considered a “Green Product”, it needs to be a leader in at least one Green Focal Area, identified as energy efficiency, packaging, hazardous substances, weight, recycling and disposal, and lifetime reliability.

green product categories_CBSR

To reach their goal of 50% of total sales generated from Green Products, Philips is committed to continuously improving the environmental performance of their products, which includes designing for energy efficiency, chemical content of products, life time reliability, and recyclability. To support the growth and development of green products, Phillips invested EUR 569 million in 2012 in Green Innovation and is on track to reach their target of EUR 2 billion by 2015.

These examples illustrate how companies can challenge and transform today’s dominant business model. Adopting the transformational qualities allows companies to anticipate the challenges and embrace the opportunities that flow from being a market pioneer, while creating long-term shareholder and societal value. On November 6, the CBSR Summit will advance dialogue and action on the Transformational Company and feature keynote speaker John Elkington, a world authority on corporate responsibility and sustainable development.

Editor’s Note: The day following the CBSR Summit, John Elkington and the Volans team will be bringing together business, government, investors and entrepreneurs for Breakthrough Capitalism at MaRS on November 7th to help a new form of capitalism find its wings.

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