SUSTAINABLE BUSINESS AND INNOVATION AWARDS
Sustainable Business and Innovation Awards
Table of contents
Sustainability is now viewed as critical to business success due to the realisation that businesses contribute significantly to environmental degradation, proliferation of unsustainable energy sources, unequal and unjust societies, and wasteful consumerism. The 21st century has seen an increased focus on sustainability issues when it emerged that the prevailing business practices were not sustainable in earth’s fragile ecosystem. While profits assured businesses of success previously, sustainability is now accepted as being critical to business success (Porter & Kramer 2019). While mainstreaming sustainability into business practices remains a challenge, efforts such as the sustainable development goals (SDGs) introduced in 2015, the United Nations Global Compact, have set into motion the corporate sustainability movement (Dyllick & Muff 2016). Therefore, many corporations have incorporated sustainable practices in their business models to not only reduce their environmental footprints along their value and supply chains but also to spearhead the innovation of the practices in the global business environment (Baldassarre et al. 2017). Unfortunately, many of the well-established companies persist with their profit-focused business practices and engage in sustainability efforts as an additional corporate responsibility exercise that drives their capitalistic intents. However, some start-ups are founded on innovative business models that have entrenched sustainability into their core business operations at the onset. These companies are not only creating sustainable value but also sharing this value widely with shareholders to mutually benefit the business and society simultaneously. Nonetheless, some longstanding corporations have modified their business model to redirect their focus towards sustainability and innovation.
Sustainability awards motivate business enterprises to look beyond profits upon the realisation that the society rather than the government is increasingly granting the corporate license to operate in the rapidly changing world. In this report, a sustainable business and innovation awards, dubbed The Earth Awards, is proposed to honour business enterprises with transformative innovations that mutually benefit business and society. Using 6 criteria, five deserving business enterprises are shortlisted and an overall winner selected. In this report, the criteria for arriving at the awards nominees are described. After that, the five shortlisted companies are detailed and the selected winner presented based on the set criteria.
The criteria are based on the pursuance of transformative innovations that mutually benefit business and society. The seven criteria include value creation, shared value, sustainable value, innovativeness in business model, net positive global effect, support of one or more of the 17 United Nations Sustainable Development Goals and focus. The first five criteria are gauged using a three-level Likert scale as illustrated in the table 1. Very high means that the criterion is highly evident while present means that the criterion is recognised in the company. For the criterion about the SDGs, the number of SDGs pursued by the firm is recorded as the score. Likewise, for the focus criterion, is scores that that a local focus scores 1, regional = 2 and global = 3.
Table 1. Scoring of the criteria.
|Evaluation of criterion||Very high||High||Present|
Value creation is the process of creating outputs that are more valuable than inputs. Businesses thrive of value creation as their core essence. In many cases, this value is captured as profits. However, value creation is transforming from being powered by the economies of industrial scale and mass production to creating innovative solutions to problems through new products and services (Porter & Kramer 2019). This criterion focuses on the ability of a firm to develop solutions to problems that vex their customers.
Shared value is the maximisation of the competitive worth to address societal needs and problems. Shared value brings together corporate assets, business opportunities and social need, that enabling society to benefit from the value created by a business entity. As such, share value goes beyond the acts of minimizing harm to the society and environment or giving back to society through philanthropy and corporate social responsibility activities (Porter & Kramer 2019). As such, the value created should be valued by multiple stakeholders, who also participate in its creation, thus creating stakeholder synergy (Tantalo & Priem 2016). This criterion evaluates the extent to which the firms solve societal problems as their core activity. Also, it gauges the extent of stakeholder synergy in the creation of the value and the multiplicity of stakeholders who benefit.
Sustainable value is the value that sustains a business entity in the context of its existence. It calls for the attention to the triple bottom line comprising of a focus on profit, people and planet. Therefore, sustainable value is created from economic, social and environmental capital (Evans et al. 2017). This criterion evaluates the ability of the firm to focus on the triple bottom line in its business operations.
Sustainable business models should facilitate firms to capture sustainable value through the innovation opportunities created by the changing resource landscape and business environment. Collaboration and co-creation are the new approaches in business models because it values networks over competitiveness (Baldassarre et al. 2017). Due to the changing patterns in value movement and emerging networks in value creation, collaboration amongst various businesses is desirable for a sustainable business model (Evans et al. 2017). This criterion gauges the networking initiatives of the firms as a feature of their business model.
A net positive global effect is the overall impact that a business has globally. Although many sustainable business initiatives focus on reducing harm to the society and environment, the positive global effect attends to the broader advancement of the wellness of the environment and society. This criterion evaluates the ability of the firm to go beyond harm reduction to positively impacting the world.
Sustainable development goals were formulated in 2015 by the United Nations General Assembly. They comprise of 17 goals with 169 targets to be achieved by 2030. The seventeen SDGs are summarised in table 2.
Table 2. Description of SDGs
|1||No poverty||Eradicating extreme poverty by ensuring that everyone lives on more than $1.25 dollars a dayEnsuring that the poor have equal rights to economic resources|
|2||Zero hunger||Eradicating all forms of hunger Use of sustainable food production systemsEnsuring sufficient genetic diversity preservation in seedsDoubling income and output of small scale food producers|
|3||Good health and wellbeing||Reducing child mortality to below 70 per 100,000 birthsEradicating preventable disease-related fatalities|
|4||Quality education||Ensuing completion of primary and secondary school education by all boys and girlsEqual access to quality education for disadvantaged people, including women|
|5||Gender equality||Eradicating all forms of violence against women|
|6||Clean water and sanitation||Ensuring access of water and sanitation for everyone|
|7||Affordable and clean energy||Ensuring access to energy that is modern, reliable, affordable and sustainable|
|8||Decent work and economic growth||Ensuring that all workers can experience equitable and sustainable economic growthUsing innovation, technological upgrading and diversification to achieve high economic productivity|
|9||Industry, innovation and infrastructure||Building resilient infrastructurePromoting sustainable industrialisationFostering innovation|
|10||Reducing inequality||Eradicating all forms of inequalities across countries Eradicate discrimination based on religion, ethnicity, disability, gender and age|
|11||Sustainable cities and communities||Guarantee access to affordable and safe housing for everyoneEnhance access to basic services such as transportation, sanitation and water|
|12||Responsible consumption and production||Eradicating food wasteEncourage the making of environmentally-sound decisionsEncourage companies to adopt sustainable business practices|
|13||Climate action||Encourage education and mitigation of human impactChange how people impact the planet|
|14||Life below water||Conserving and sustainable use of seas, oceans and marine resources|
|15||Life on land||Encourage sustainable management of forestsArrest desertificationStop and turn around land degradationStop the loss of biodiversityDevelop proven strategies in the next 10 years|
|16||Peace, justice and strong institutions||Promoting inclusive, peaceful and just societies|
|17||Partnerships for the goals||Revitalisation of global partnerships|
Source: United Nations Global Compact (2019)
The focus criterion evaluates the expansiveness of the reach of the firm’s processes, services and products. The focus ranges from local to regional and global. A local focus means that the company operates within one country and its services or products are marketed within the country, however, a global firm not only has a presence in multiple countries but also has a variety of services, products and programs that are available internationally.
The scores by each company are tallied and the company with the highest score is selected to win the Earth Award. Table 3 illustrates the scores of each company based on the criteria and the tally of the scores.
Table 3. Performance of the 5 companies based on the 6 criteria
|Lanza Tech||Apeel Sciences||Bechtel||Cargill||BMW|
|Innovativeness of business model||3||3||2||2||3|
|Net positive global effect||3||3||3||3||3|
After tallying the scores of each company based on the seven criteria, Bechtel emerged with the highest score. As such, Bechtel is selected as the laureate overall winner of The Earth Awards 2019 edition.
The four runners up companies are described briefly to create an understanding of their operations and activities, explaining the variation in scores.
LanzaTech Inc. was New Zealand firm founded in 2005 with the vision of a new carbon economy. The company’s innovative business model is based on the circular economy in which carbon can be held in a closed loop material cycle. The company believes that carbon can be licked into new products which can be recycled to recover the carbon at the end of their lifecycle. LanzaTech Inc. has partnered with companies such as India Glycols limited (IGL) of India and Shougang Group of China to develop innovative products from industrial carbon wastes (Burton 2019). Its innovative technology uses bacteria to convert carbon pollutants into chemicals and fuels (Peters 2019). For instance, the company managed to produce more than 90 million gallons of ethanol from emissions from steel mills within the first year of the joint venture with the Chinese partner firm. The company is looking to using the same technology to produce polyethylene terephthalate (PET), a polymer resin that is used to make consumer goods such as clothing and packaging containers (Burton 2019). The company pursues three SDGS, including affordable and clean energy, responsible consumption and production and partnerships for the goals. However, some of its products are still being tested in the market and therefore, are yet to deliver value to stakeholders in the short-term. The carbon recycling technology is scalable to all areas experiencing carbon-related pollution considering that the bacteria is easy transportable to various locations.
Apeel Sciences is an American firm founded in 2012. Its mission is to use food to preserve food. This business was inspired by the realisation that food spoilage rather than food production was the major challenge of global food security. As such, the company looks into nature to develop new ways of improving the quality, reduce wastage and ensure abundance of food, and thus assist the global food system (Apeel Sciences 2019). The firm developed a tasteless, edible food-based product that is sprayed on fruits and vegetables to extend their shelf life (Gagne 2019). The company works with good retailers in United States such as Harp Food Stores, Kroger and Costco, and farmers in Kenya and Uganda to create and share value from its innovations (Richardson 2018). The company addresses the goal of zero hunger by combating food wastage and partnerships for the goals by engaging multiple partners domestically and in under-developed countries to create and share sustainable value. However, most of its focus in inside the United States and the company is yet to realise the full returns from its innovative products. The production of the food-based protectors can be scaled up to meet the global demand for preservation. Moreover, the technology is important to all parts of the world due to the prevalent of food spoilage regardless of the availability of refrigeration in some areas.
Cargill Incorporated is an American multinational that was founded by William Cargill in 1865. It is a large company with operations in 66 countries and employs about 166,000 employees. Although its essentially an agricultural firm, it developed agricultural technologies to assist farmers all over the world. For instance, Cargill has installed water reuse systems in many of its international locations, invests heavily in research on the global food system, and engages ethical sustainable supply chains (Kimmelshue). For these reasons, its operations advance the achievement of 6 SDG goals, including clean water and sanitation, industry, innovation and infrastructure, responsible consumption and production, life below water, life on land, and partnerships for goals. Moreover, the company trains huge numbers of farmers on improved farming methods (2019United Nations Council for International Business 2019 a). The business model is scalable because it can be used by companies to change their focus. Notably, food security is a pressing issue that threatens the survival of many people. Focusing on food systems allows attention to be drawn to enablers such as water, human capital, supply chains, infrastructure and many other issues affected simultaneously (Kimmelshue 2019).
Bavaria motor works (BMW) is a German automaker that was founded in 1916. It is a very profitable company with over 130,000 employees. The company produces cars and motorbikes in Germany and various other foreign plants across the world. The company is renowned for its contribution to the development of commercial electric cars, the i models, and participation in car-sharing initiatives through DriveNow and ReachNow (BMW Group 2019). Moreover, BMW proactively removes gender and age discrimination from its workforce by introducing innovative ways of accommodating an aging workforce (Putrill 2018). The company advances 2 SDGs by advancing the good health and wellbeing of its older employees and the use of clean energy (electricity) in motor vehicles. The business model addressing the human factor and particularly the ageing workforce is scalable to all firms, considering that the aging population is a global phenomenon that poses challenges presently and in the future.
Bechtel Corporation is a large American engineering and construction firm headquartered in Virginia in the United States. Since its founding in 1898, it has contributed to a safer, cleaner and prosperous world through increasing access to energy and resources, improving the resiliency of the infrastructure, and growing economies in over 160 countries (Bechtel Corporation 2019 a). It has engaged in large projects that impact society through innovations that attend to the needs and challenges in society (Bechtel Corporation 2019 b). For instance, Bechtel is supplying a mining site in Chile’s Atacama Desert with desalinated seawater, building power plants for Panda Power Funds that use natural gas in the world’s most efficient way, helped develop the Ivanpar Solar Power generating plant in Mojave Desert, enhancing the use of wind power generated offshore, improving Peru’s economy by constructing a copper concentrator in the remote Las Bambas, innovated the removal of carbon form gas-fired power plants, and developing smart cities in Saudi Arabia (United Nations Council for International Business 2019 b). The company has modified its business model over time to focus more on the pressing social problems rather than profit making.
The company pursues 7 SDG goals through its projects. These include i) the pursuance of clean water and sanitation through its desalination project, ii) affordable and clean energy through its solar and wind power projects, iii) descent work and economic growth through it project in Peru, iv) industry innovation and infrastructure through the road infrastructure projects in Gabon and Kosovo, v) sustainable cities and communities through its Saudi economic cities project, vi) responsible consumption and production through its projects in the United Kingdom and United Arab Emirates and vii) partnerships for goals through the collaboration with multiple partners in the various locations of its projects globally (United Nations Council for International Business 2019 b). The business model of undertaking multifaceted projects can be scaled up with sufficient networking between firms. Large projects that are strewn across the world influence many people and large spaces simultaneously, thus significantly and positively impacting the world.
The Earth Awards aims at recognising companies around the world that have innovative sustainable business strategies. The criteria for the award is based on value creation, shared value, sustainable value, innovativeness in business model, net positive global effect, support of one or more of the 17 United Nations Sustainable Development Goals and focus. Shortlisted companies drawn from diverse industries were shortlisted and scored based in the criteria. Bechtel Corporation emerged the best company deserving the award. Its strength was drawn from its huge impact on national economies and communities around the world through its innovative projects. Besides, the company was championing advanced technologies in water and energy, which were pressing problems in the contemporary world due to scarcity and unequal distribution. The various projects undertaken by company are scalable for use across the world in addition to addressing various SDGs simultaneously.
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