The way that mainstream business embraces new and disruptive business models will be critical in accelerating the pace of change on sustainability.
Not only do the new business models (e.g. closed loop, circular economy, open innovation) - identified by Mike Barry in his recent blog - have the potential to move us beyond the status quo, socially and environmentally, there is significant commercial value to be gained, too.
The debate has indeed already moved beyond the traditional definition of sustainability. In research Coca-Cola Enterprises will publish on 1st October with the Economist Intelligence Unit, leading companies have reported that they are increasingly turning sustainability initiatives into ways of innovating, engaging employees, winning supplier contracts and tapping into new markets.
Recognition of this means progressive companies are already rethinking their business models and using disruptive approaches to extract real value from the green economy. For example, the UK Government Department for Business, Innovation and Skills estimates that over the past five years, clean technology and circular economy services have grown by 24% and 18% respectively.
At Coca-Cola Enterprises, as part of our leadership on sustainable packaging and recycling we have cut our use of packaging materials by over 2.5 million euros in the past year, and continue to look at ways to use more recycled and renewable material in our bottles and cans. One way we’ve done this is by departing from our traditional business model to invest in collaborative ‘closed loop’ joint ventures in France and Great Britain. We are increasing capacity within the plastic reprocessing industry, driving more recycled PET into our bottles and have helped to establish the largest plastic bottle reprocessing plant in Western Europe.
Collaborative business is one of the new and potentially most fruitful models identified. No one company has all the answers. So, we need to further embrace the transformative power of collaboration with government, society and the wider business community if we’re to drive the breakthroughs needed to accelerate progress. Partnering with NGOs and academic institutions remains important, and is something Coca-Cola Enterprises actively pursues, but to generate even greater value, cross sector collaboration with peers and supply chain partners is an area I’d expect to see fast-tracked over the coming years.
Businesses are receptive to the concept too. In a recent Green Monday survey, nearly 40% of respondents considered such new business models an opportunity. Ten, or even two years ago, that wouldn’t have been the case.
For Coca-Cola Enterprises, collaborative partnerships have also proved useful in understanding and influencing consumer behaviour. We recently partnered with the University of Exeter to observe at-home recycling behaviours, and understand why there is a value-action gap in terms of recycling. People say that they recycle, but in Great Britain and France, where recycling rates are lower than in other NW European countries, the reality is different – people don’t always do what they say they intend to do.
The consumer plays a critical role. Increased recycling rates will enable manufacturers like Coca-Cola Enterprises to boost sources of locally-available high-quality recycled PET that can be reprocessed and reused. This, in turn, helps us to close the loop, reduce our use of natural resources and re-use valuable material in our packaging.
New and disruptive business models do have the potential to impact the way mainstream business operates and help to address the most significant societal and environmental challenges of our time. They may appear unfamiliar and challenging, yet tried and tested solutions increasingly have limits. By embracing innovative thinking, expanding collaboration and utilising emerging technologies, business will be better equipped for the long-term.