What is a sustainable business model? The new challenge of CSR

According to Pierre Yves Sanchis, CSR, which has been established in the economic landscape for twenty years, is today challenged on its ability to change the business model of companies. It is too often seen as peripheral to strategic decisions. CSR strategies are too often juxtaposed with business strategies. How can CSR reinvent itself, at a time when the climate emergency and societal expectations have never been so important?

WHAT IS A SUSTAINABLE BUSINESS MODEL?

According to Patrick d’Humières, the value creation model should be reviewed. Indeed, the global economy is no more responsible today than it was 20 years ago, when companies have made efforts to deploy sustainable solutions. CSR as a self-regulating system has failed. It is a concept at the end of the cycle, which is increasingly questioned about its ability to work for a better world.

CSR must now become a matter of governance, no longer of management. At the global level, the Sustainable Development Goals have become the reference framework. They give a direction to follow based on scientific facts, in particular in order to respect the Paris Agreement and limit global warming to 2 ° C by 2050. The challenge for companies is not therefore to know where to go, but how to get there.

It is possible to group the SDGs around 4 major strategic axes LEAD model:

  • Loyalty (respect for regulations)
  • Equity (fair working conditions)
  • Accessibility (responsible product / service offering)
  • Decoupling (dissociation between growth and negative impacts (ex: GHG, waste, etc.)

These axes, transposed to a company’s business model, can enable it to move towards true sustainability. It is important that an organization makes equivalent efforts in each of the 4 categories, while having identified the main SDG inherent in its activity. For each of the 4 areas identified, concrete indicators make it possible to measure the impact of an organization.

Trajectory to be followed by companies, according to the LEAD model

A definition of the “sustainable model” could therefore be as follows: a model of value creation vis-à-vis the SDG mainly identified, respecting a balance between the 4 components of sustainability (LEAD).

Thus, if the business world is preparing for a revolution, it will not be technological, but systemic. Indeed, it is the entire governance system that needs to be reviewed.

HOW TO APPLY THIS MODEL IN PRACTICE?

Arnaud Herrmann, Director of Sustainable Development at Accor, presented his vision for the implementation of a business model that tends towards sustainability.

The application is done through:

  • The “flattening” of the business model of the company and its value creation levers
  • The identification of the actors (service departments) involved at each stage (example “customer loyalty” or “cost control” led by the purchasing department)
  • Identifying the possible contributions of CSR at each stage (which enabled Accor to identify around ten measures)

Arnaud Herrmann recommends stopping opposing CSR and ROI (return on investment) because striving for a sustainable model is a means of creating value. It is by using this vocabulary to which decision-makers (Executive Committee and Board of Directors) listen that the CSR referents will manage to shake things up.

He also mentions the need to activate the various levers (Governance, Marketing, Group brands, Management, etc.) consistently, simultaneously and harmoniously.

Rodolphe Durand, Professor at HEC and founder of the Society and Organizations Center, supports these remarks. Evidence-based studies exist today. They make it possible to demonstrate the contribution of CSR to profitability, to differentiation and to the creation of intangible values.

He invites CSR professionals to devote part of their time to teaching to bring these messages to management schools.

For Caroline Renoux, sustainable development directors have a role to play. Indeed, they have specific skills: a transverse vision of the company, an ability to identify and dialogue with stakeholders and identify weak signals, an ability to juggle the short, medium and long term. And above all, they know how to show courage and tenacity. Two essential qualities to successfully complete the transition. They still need to strengthen their skills in finance to interface with managers. These assets also allow them to develop their employability and to be able to access general management responsibilities.

WILL THE PRESSURE ON MODEL CHANGE COME FROM THE EXTERIOR?

Stakeholders agree on the difficulty of identifying the actors who will engage companies to turn to a sustainable model. The State has shown the limits it has to legislate on these subjects. Civil society is struggling to structure itself. Customer demand (B to B) is of the order of weak signal in many sectors. Consum’actors are still marginal. Millennials still have too little purchasing power to impact market trends. Ultimately, it is certainly investors who could make the change. The potential costs of environmental disasters and social instability are risk factors that they now take into account in a long-term view.

CONCLUSION

The aim is no longer to define a CSR strategy, but to succeed in achieving a sustainable model while continuing to operate. To this end, companies have a structured framework (SDG) in order to play their role in meeting the objectives set in the Paris Agreement. To reinvent a sustainable model, a transformation of their offers, their impacts and their practices is necessary. This simultaneously and in a coordinated manner, by activating all the levers at their disposal.

To go further, a Masterclass 21-type training course on the theme “Managing the sustainable business model” is available  here . Composed of 12 sessions of 5 hours spread over 8 months, co-constructed by Centrale Supélec Exed, the Académie Durable Internationale and Des Enjeux et des Hommes, this course covers in detail the various themes related to sustainability.