Sustainable Business Models: Theoretical Reflections

Nidumolu et al. (Harvard Bus Rev, September: 57–64, 2009) argue that sustainability is becoming increasingly essential for long-term success of companies. Those that do not rethink the business models around sustainability will limit long-term ability to create competitive advantage. Economic sustainability is a prerequisite for any viable business model, as without this there cannot be longevity for the business. While this is generally conceptualised as a requirement for growth and profitability, this need not necessarily be the case—there is a growing body of literature around the subjects of steady-state economics and not-for-profit social enterprises. Beyond economic sustainability, the need for environmental and social sustainability is increasingly recognised. Companies are attempting to address this within the framework of existing business models and exploring business model innovations.