What is business model innovation? How does it impact sustainability? Which models are disrupting industries, beyond car sharing and distributed energy? A new research report, Model Behavior: 20 Business Model Innovations for Sustainability, released by SustainAbility earlier this year, brings clarity to this oft-hyped space and identifies and analyzes 20 emerging business model innovations that are having a positive social or environmental impact. Mark Lee, Executive Director of SustainAbility, and Lindsay Clinton, Senior Manager in SustainAbility's New York office, who led and co-authored the research, will host this webinar to share research findings and engage in a discussion about business model innovation.

1. sustainability.com London | New York | Oakland
Sustainable Brands Webinar
March 12, 2014
Business Model Innovation for
Sustainability
Confidential and Proprietary
This presentation has been produced for Sustainable Brands only.

2. Introduction
2
Welcome from SustainAbility
SUMMARY SLIDES MODEL BEHAVIOR INTRODUCTION
Lindsay Clinton
Senior Manager, SustainAbility
Co-author Model Behavior
Mark Lee
Executive Director, SustainAbility

3. Model Behavior explores the role and practice of business
model innovation in the context of sustainability.
- Over 100 companies reviewed
- More than 80 examples of business model innovation
- 5 areas of innovation
- 20 distinct business models
The report offers a closer look at what’s occurring in each
of these models to produce more sustainable outcomes.
www.sustainability.com/model-behavior
Introduction
3
Model Behavior
SUMMARY SLIDES MODEL BEHAVIOR INTRODUCTION
20 Business Model Innovations
for Sustainability

4. 4
Structures to create, deliver and capture value
Source: Alex Osterwalder’s Business Model Canvas.
SUMMARY SLIDES MODEL BEHAVIOR INTRODUCTION

5. 5
Framework: Innovating for sustainability
SUMMARY SLIDES MODEL BEHAVIOR INTRODUCTION

6. 6
The 20 Models
SUMMARY SLIDES MODEL BEHAVIOR THE 20 MODELS
Environmental
Impact
§ Closed Loop Production
§ Physical to Virtual
§ Produce on Demand
§ Rematerialization
Social Innovation
§ Buy One, Give One
§ Cooperative Ownership
§ Inclusive Sourcing
Base of Pyramid
§ Building a Marketplace
§ Differential Pricing
§ Microfinance
§ Micro-Franchise
Diverse Impact
§ Alternative Marketplace
§ Behavior Change
§ Product as a Service
§ Shared Resource
Financing
Innovation
§ Crowdfunding
§ Freemium
§ Innovative Product
Financing
§ Pay for Success
§ Subscription Model

7. Key Takeaways from
the Research

8. Every exchange in a value chain
provides opportunities for innovation
and impact.
8
Takeaway 01
SUMMARY SLIDES MODEL BEHAVIOR KEY TAKEAWAYS FROM THE RESEARCH
By identifying and analyzing the points of
exchange, an established business can
find areas of promise for business model
innovation.

9. Companies that have demonstrated a
business model innovation have often
done so by shifting incentives in the
value chain.
9
Takeaway 02
SUMMARY SLIDES MODEL BEHAVIOR KEY TAKEAWAYS FROM THE RESEARCH
When a business understands what each stakeholder wants or
needs and responds creatively, or perhaps even radically,
business model innovation begins to take shape.

10. The largest companies tend not to be the
source of new models, but they can help
evolve and scale them.
10
Takeaway 03
SUMMARY SLIDES MODEL BEHAVIOR KEY TAKEAWAYS FROM THE RESEARCH
Larger companies can help to bring new models to maturity.
through acquisition or mutually-beneficial partnerships, or the
adoption of new ideas into a given industry.

11. Business model innovation doesn’t
happen in a vacuum.
11
Takeaway 04
SUMMARY SLIDES MODEL BEHAVIOR KEY TAKEAWAYS FROM THE RESEARCH
We must recognize how any model - sustainable
or not - is dependent on surrounding conditions, and that
new models are often enabled by, or arise organically from,
changes in those conditions.

12. Models with the
Most Promise

13. SUMMARY SLIDES MODEL BEHAVIOR MODELS WITH THE MOST PROMISE
13
Closed-Loop Production
Closed Loop
Production:
The material used to create a product is
continually recycled through the production
system.
Spotlight:
Novelis
Novelis aims to develop an almost entirely
closed-loop business model by sourcing
more recycled aluminum, coordinating
post-production scrap take back, arranging
end-of-life product takeback, and building
more of its own recycling operations and
processing facilities.

14. SUMMARY SLIDES MODEL BEHAVIOR MODELS WITH THE MOST PROMISE
14
Product as a Service
Product as
a Service:
Consumers pay for the service a product
provides without the responsibility of
repairing, replacing or disposing of it.
Spotlight:
Rolls Royce
plc
Rolls Royce handles service and
maintenance of the products it
manufactures; rather than charging per
transaction, the company uses a model
focused on achieving outcomes for each
customer.

15. SUMMARY SLIDES MODEL BEHAVIOR MODELS WITH THE MOST PROMISE
15
Inclusive Sourcing
Inclusive
Sourcing:
Retooling the supply chain to make a
company more inclusive, focusing on
supporting the farmer or producer
providing the product, not just the volume
of the product sourced.
Spotlight:
Walmart
For several years, Walmart has sourced
more food directly from farmers, cutting out
middlemen and enabling some farmers to
boost their income. In some countries, this
has meant fresher, more local produce.

16. SUMMARY SLIDES MODEL BEHAVIOR MODELS WITH THE MOST PROMISE
16
Alternative Marketplace
Alternative
Marketplace:
When a company circumvents a traditional
method of transaction or invents a new
type of transaction to unleash untapped
value.
Spotlight:
ITC
e-Choupal:
This rural agribusiness arm of the Indian
conglomerate ITC provides Internet access
and market pricing information that can
boost farmers’ earnings and eliminate
middlemen.

17. Lindsay Clinton
SustainAbility
clinton@sustainability.com
Twitter: @lindsclint