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Defining a Business Model for Sustainability: Does One Size Fit All?


    Consumer Conscience: How Environment and Ethics are Influencing Exports

    8 - 11 October 2008, Montreux, Switzerland

    SESSION SUMMARY: Friday, 10 October 2008                   print icon  Printer-friendly version                           


    Defining a Business Model for Sustainability: Does One Size Fit All?

    John Viljoen, Managing Director, iedex group of companies, Australia
    John James, Programme Director, Southern African Business Linkages, South Africa
    Harriet Lamb, Executive Director, the Fairtrade Foundation, UK
    Osman Ataç, Chief, Trade Support Institution Strengthening, ITC 
    If a business model for sustainability is to succeed, it must be chosen by the company itself and based on national conditions and market demands, said John Viljoen. But in today's changing world, it must build in new factors that can radically order production patterns, such as coping with the effects of global warming, he added.

    John James agreed. "I don't see one business model, but possibilities for better and more sustainable organizational models helping build up national businesses through linkages." In South Africa, he noted, an essential element of the model for all companies is taking account of the high incidence of HIV/AIDS among the local population.

    "Ethical trade and business begins at home," he said. It is vital for small and medium-sized businesses to get the local value chains right before attempting to venture into foreign markets. "If you do the right things, you will prosper. A happy supply chain is a successful one," James said.

    For Harriet Lamb, a socially responsible business model is only possible if global consumer consciousness is driving companies to shape their practices for sustainability. This consciousness is already developing. "When the public hears that companies are doing the right thing, they are ready to pay more for the product," she said.

    Big UK retailers have increased their sale of products and produce that have acquired the Fairtrade label, despite the higher prices on these goods. "The public has shown that it is ready to make trade and business socially responsible," she added.

    Panellists agreed that certification is a key tool to ensure that companies apply ethical and sustainable principles right along the chain in their businesses. But there is no clear consensus on how this should be financed, especially as the cost can be heavy. One suggestion was that governments or international trade support bodies take on part of the burden. Another was that producers group together to ensure they meet the standards required, as done by wine producers in South Africa.

    James said businesses should view the certification process "not as a cost, but as an investment in the future." However Viljoen struck a note of caution. "Don't lose sight of your chosen business model and become a slave of certification," he said.

    Summing up the discussion, moderator Osman Ataç listed the following conclusions:
      1. There is no single business model, but sustainable principles have to be built into any that is chosen.
      2. Non-compliance with standards, or with consumer demand based on sustainability, is not an option.
      3. There are good business reasons to opt for a sustainable model - doing good makes business sense.
      4. But companies have to stand up and talk about what they are doing if they are to gain any competitive advantage from their model.