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  • Flickr image by Mary Anne Enriquez

    This article was co-written by Lindsay Clinton and Rochelle March.

    Last year, the CEO of Fortune 250 energy provider NRG wrote a letter to shareholders about the lack of innovation in the energy industry. “There is no Amazon, Apple, Facebook or Google in the American energy industry today,” David Crane wrote. “NRG is not that energy company either, but we are doing everything in our power to head in that direction – as fast as we can. But we need to pick up the pace further, and that is what we intend to do.”

    Although NRG’s portfolio still includes 30% coal-generated power, it is repositioning itself and its business model to guide energy users from a grid-based power system to a distributed generation system. It’s also developing products and services related to electric vehicles, rooftop solar and home energy efficiency.

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  • Flickr image by Tim Reckmann

    When Warby Parker launched its prescription eyewear brand four years ago, it broke the industry mold by offering a unique business proposition. Whereas most eyeglass shops depend on storefronts to bring in customers, Warby Parker created a business model based on bringing the glasses to the consumers. Using their “Home Try On” system, the company’s customers can order up to five pairs of glasses to try on in front of their bathroom mirrors – for five days at no charge.

    Much has been written about Warby Parker’s hipster brand identity as well as its social mission: for every pair of glasses sold, the company donates a pair to a person in need. What I find unique about its model, however, is the potential for sustainability by way of reduced resource usage. Just like Netflix and other virtual brands that have come before it, Warby Parker is cutting energy and resource use by streamlining operations.

    Once, the consumer marketplace was almost exclusively comprised of single-purpose brick and mortar stores – the butcher, the baker, the greengrocer and even the optometrist. Later, grocery stores – and, eventually, big box stores, retail outlets and shopping malls – put several of these services under one roof. It isn’t hard to see why the department store model was so profitable: erecting a store on every corner or in every town provides customers with convenience, builds brand recognition, and can even create a sense of community. …

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  • Flick image of step pyramid by Ed Yourdon

    In 2004, the late CK Prahalad, an influential management professor and author, published The Fortune at the Bottom of the Pyramid, a book that urged companies to use a new lens to view the poor. Prahalad advocated for envisioning those at the bottom of the economic pyramid as producers and consumers of products, rather than merely as philanthropic beneficiaries.

    Ten years later, several large companies have adopted Prahalad’s ideas and, in the process, have demonstrated that serving the “base of the pyramid” consumer can make good business sense. I analyzed several of these “base of the pyramid” business models — what we call “Building a Marketplace” — in Model Behavior: 20 Business Model Innovations for Sustainability, a report that I co-wrote and released earlier this year….

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  • Philadelphia increased its residential recycling by nearly 20,000 tons after partnering with Recyclebank. Flickr image by Bob Snyder

    Imagine if you got rewarded every time you rode your bike instead of driving, or if you received a tangible benefit whenever you made a greener choice. Would this change how you go about your day? And could that change be a stimulus to speed up advances in global sustainability?

    Convincing consumers to change their behavior is a significant component of the sustainability agenda. But for the most part, these efforts have been based in apps and campaigns, such as Alcoa’s Aluminate can recycling app or Bank of America’s Keep the Change savings program. By comparison, business models designed to stimulate sustainable behavior change are a relatively new – and largely unproven – concept.

    However, given the growth of smart technology and social media, expect to see behavior-change-focused business models in the future. If these models can generate profit and scale, they could help drive an economy decoupled from resource use. …

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  • Flickr image by Barefoot Photographers of Tilonia

    Rice paddies and colorful tractors are common sights in remote parts of south India. So, too, are small shanties, brightly painted shops and coconut palms. But nowadays, in some villages, solar panels have also become part of the landscape, covering shingled roofs and competing with the palms for sunlight.

    The panels are helping to catapult energy-poor villagers – who previously had no, or only very limited, electricity – into a more sustainable future. This leap to renewable energy is the result of an innovative business model that’s being rolled out to low-income communities in the state of Karnataka.

    The company behind this new model is Simpa Networks, a technology company that aims to make sustainable energy affordable to all – even those who make less than $2 a day. In particular, Simpa targets customers who have limited access to electricity and use kerosene lanterns, which can pose health and safety risks, to illuminate their small homes. It also targets customers with little, if any, disposable income, who can’t afford to buy its solar products for $200 to $400 each – even though Simpa claims its system could yield significant savings over its 10-year lifespan. …

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  • The idea of business model innovation—that a company could launch a new business model never conceived of before, or transform an existing business model—has long captivated business leaders. And yet, executives are often held back by vested interests in their current approach: “If it ain’t broke, don’t fix it.” But as global trends—environmental, social, political, technological—continue to shift the foundations of our current business models, incremental innovation will become less effective in enabling companies, industries and whole economies to adapt and succeed. There is an urgent need for fundamentally different approaches to value creation….

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  • E-Choupal's alternative marketplace gave local farmers access to market information, like corn prices, that they didn't have before. Flickr image by Martin Lopatka

    This is the first in a series of posts originally published on Guardian Sustainable Business about business-model innovations that accelerate social and environmental impact.

    More than a decade ago, the Indian conglomerate ITC created a new model for sourcing agricultural commodities from rural villages. It brought internet terminals – called e-Choupals – into farming villages, which gave local farmers access to market information they hadn’t had before. The innovation created business value for ITC by strengthening its supply chain, and provided social value by delivering benefits to farmers. But it did something else, too: it also disrupted the marketplace.

    The terminals ended the information asymmetry that had long hindered rural farmers, who had little negotiating power at the government-mandated marketplace, called a mandi. The e-Choupal enabled access to market pricing information for crops, giving farmers the choice of when to sell and for how much. ITC has since placed 6,500 e-Choupals, serving more than 4 million families, in 40,000 villages….

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  • Image: iStockphoto

    Historically, most companies advanced their sustainability credentials through reporting, efficiency or even just good marketing. Approaches often involved streamlining processes or products to achieve a smaller environmental footprint.

    These innovations are worthwhile and move us closer to sustainable development, but they don’t address the underlying value structure of a company. They are incrementally better, but not transformative or good enough to change our take-make-waste economy….

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  • Many multinationals, in the last few years, have ramped up their efforts to better understand their long-term future in a world where 9 billion people need to live amidst converging pressures on food, energy, and environment. Some, like GE, P&G, and Microsoft have turned to emerging markets to innovate new products, processes, and business models. Sustainability professionals looking for new solutions should also take note. Emerging markets provide a wealth of information, ideas and knowledge about how to thrive in the face of massively constrained resources …

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  • Last week, leaders from government, business and civil society gathered in Rio de Janeiro for a United Nations summit—called “Rio+20” because it is now 20 years since the original Earth Summit in Rio—intended to address the slow pace of change on sustainable development and determine the best path forward.

    At business side events leading up to the event, executives repeated a refrain: We have the science. We have the …

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  • If you’ve been watching any of the news coming out of the Rio+20 Earth Summit, you would not be blamed for thinking that it will ultimately fail. Many have decried the final Rio outcome document as weak and watered down. Several leaders have spoken out against the final version expressing dismay that it does not offer a more ambitious agenda. United Nations (UN) Secretary-General Ban Ki-moon, said in his opening remarks to the general assembly earlier this week, “Let me be frank: …

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  • It is awfully tempting to ignore the Rio+20 Earth Summit.

    If you’ve been listening to the echo chamber of low expectations surrounding the summit, you can’t be blamed for doing so. Many companies and even some environmental NGOs are keeping their heads down.

    But it’s not in business’ best interest to ignore the summit. We’re in the midst of a tipping of …

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  • Early talk about the UN Summit Rio+20 to be held June 20-22 in Rio de Janeiro, Brazil, gives the impression that it may flop. Recent articles from respected groups like the Council on Foreign Relations and the World Resources Institute and outlets like Guardian Sustainable Business and Environmental Finance cite low expectations. For those that pay attention to international governance meetings, the lack of progress at the annual COP meetings (Conference of the Parties) to assess and negotiate climate change commitments and lack of action after past sustainable development meetings have created a cloud of fatigue.

    While many are skeptical about Rio+20, we stand to gain from holding this fourth—the fourth in forty years—in a series of Summits focused on environment and development.

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  • This year marks two especially significant milestones in sustainable development: the 20th anniversary of the United Nations’ Earth Summit in Rio de Janeiro and the 25th anniversary of the Brundtland Report, Our Common Future.

    How far have we come since the concept of sustainable development was elevated to the global policy agenda?

    To put it simply,…

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  • SustainAbility and GlobeScan sat down to breakfast in New York recently in the fourth in a series of discussions on “Leadership, Trust and Value.” Over the last few months we’ve held several gatherings about sustainability aspirations with our clients and collaborators in London, DC and San Francisco. At this iteration, colleagues from Cisco, Context America, Goldman Sachs, IFF, Mission Markets, and the Overbrook Foundation joined us. The diversity of our group made our discussion—which volleyed from the evolution of the sustainability movement to “NGO lethargy” and the off-gassing of Styrofoam—all the more interesting.

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  • Photo: Flickr user Meena Kadri

    A week ago, as I waited at a traffic light in Mumbai, I witnessed an incident of grand theft auto—well, perhaps it was not grand, but something was stolen, and it involved an automobile. Here’s what happened: A barefoot woman in a grubby green sari scurried into the street, carrying a big empty water jug under her arm. Without shame, she went straight to the back of a brightly painted water tanker truck which was waiting for the red light to change. On the back of the water tanker was a large faucet, and when the woman turned the valve, water spurted everywhere, soaking her sari and filling her jug within seconds. The woman’s children and husband watched by the side of the road as she stole the water

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  • Lindsay Clinton tracks emerging themes in social enterprise, from this year's Skoll World Forum.

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  • Lindsay Clinton is in Mumbai to round off 18 months of research on sustainable solutions to urban poverty.

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  • Many companies have struggled to achieve meaningful returns from BOP markets, but they shouldn't give up quite yet.

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  • Despite the hope microfinance has not made poverty history - once again we are in need of new inclusive business models.

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