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Sign upIntegrated, efficient redesign of the company’s offering can lower costs & emissions, while redesigning its income model
Integrated, efficient redesign of the company’s offering can lower costs & emissions, while redesigning its income model
This solution implies to consider multiple aspects of your value creation process, spanning from changes in your business model to bettering the environmental footprint of your offerings using Life-Cycle Assessments (LCA). Switching to an “as-a-service” business model for instance leads to two powerful incentives to create more sustainable products. First, by placing the ownership costs on the side of your company, so that it becomes in your interest to create the most efficient, enduring, reliable, reusable… and cheap to operate items. Second, by cancelling the need to sell as much products units as possible, a need leading in the worst case to planned obsolescence to force purchasing behaviors. Consequently, revenues should depend on other selling factors such as the consumption time (even for physical goods) for instance, i.e., the longer, the more profitable. To exemplify, Philips partly switched from the sales of light bulbs towards supplying “lighting-as-a-service”. On one side, the company enabled its consumers not to be annoyed by equipment disposal and upgrades. On the other side, Philips secured solid customer relationships – and hence precious recurrent revenues – while recovering valuable components making up its end-of-life products (1). To switch from the illogical – yet widespread – corporate behavior leading to business models disposing of products after a short use life, customers should be considered as users and monetised products should be thought as investments for the company (1) (2). For a same item, these 2 major redesigning steps should result in a longer customer relationship, rooted over successive use cycles instead of a single use cycle (1) (2). An other industry, an other example of innovative business model redesigns: now follow me amid apparels thanks to Patagonia. In contratst to most companies following a take-make-waste logic, this company works towards circularity and estimates that a circular logic can shrink an apparel’s carbon, waste as well as water footprints by 73% (3). This reasoning also forces to reduce inventory thus resulting in less deadstock, i.e., less costs to cover as well as avoided environmental impacts (e.g., from energy, materials, storage) (3). This compels to think how to get more revenues from less production (3). To exemplify, by selling pre-owned and old garments (while certifying their quality to clients) in addition to the traditional sale of new clothes (3). Circularity redesigns the lever for growth, profitability, and scale used in conventional production from an unidimensional one – i.e., the greater the production and sales, the greater the revenues – towards a multidimensional lever – the greater the use life, the greater the revenues – surrounded by new services extending the monetisable life of products (3). Of course, this is not possible for each industry (e.g., medical items, etc.). Yet the business model redesign is an incredible key to achieve absolute reduction of a company’s carbon footprint. Indeed, solely decreasing its relative carbon footprint is a nice improvement, but an insufficient result to fight against climate change and resource depletion (4). We can even cite Picture, an other apparel brand, which decided to rent winter sports clothing. The customer experience takes place fully online, as for a classic e-commerce purchase. Picture did not stop selling sport gears, instead they combined both rental and sale. To illustrate, they cite a study comparing both business models for jackets. Hence, producing and selling 200 jackets sold at €450 leads to a benefit of €30,000 (5). To obtain the same benefit, 1,100 rentals at the average price of €55 for 5 days are necessary (5). However, only 28 jackets need to be produced in the last case (5). Once too worn to be rented, jackets are sold as second-hand at 60% of their original price (5). Thus, while generating the same €30,000, the climate impact is said to be reduced by 43% whereas the global environmental impact is reduced by 33% (5). Admittedly, the rental can increase emissions from transportation and energy used to wash jackets, however a right balance of renting and selling enables complementarity leading to an optimum of environmental impacts and financial benefits (5). Redesigning your products and services to slash your greenhouse gas (GHG) emissions and secure your revenues is exactly about finding this optimum. Such innovations are enabled by Business Model LCA (6). In contrast to conventional LCA (e.g., focused on a product), it does not omit socio-technical and economic phenomena occuring at the business model level, hence enabling to identify where a company should improve sustainability in its economic logic (6). Nevertheless, LCA at the product-level is also vital. Illustrating with Patagonia, its Responsibili-Tee® consumes 96% less water and emits 45% less carbon compared to an average t-shirt made of cotton (3). To achieve that, it relies on 100% recycled materials equivalent to less than 5 plastic bottles and about half a pound of cotton scrap (3). Thanks to such efforts in its production redesign, this product is Fair Trade Certified™. Furthermore, companies having large product portfolios (e.g., in the automotive supplier industry) can be afraid of the resources required for achieving corresponding LCAs. Fortunately, methods exist to solve this problem. E.g., such tools can help determine the most representative set of products, in terms of carbon footprint for instance, so that LCA evaluations can focus only on this pool of products (8). Then, you can achieve the redesign measures and get their corresponding benefits more easily. For example, increasing energy efficiency can reduce industrial carbon emissions by up to 34% (9) and implementing the lean principles (e.g., diminishing waste, rework and overproduction, etc.) can save up to 20-30% operational costs already within the first year (10). To be inspired and get motivated, have a quick look at Philips for instance. Indeed, the latter set several circular economy objectives for 2025 among which generating 25% of its income from offerings contributing to circularity (11). And to feel how well sustainability works on finances, Patagonia had an estimated value of €2,8 billion just before 2023, sold more than €933 million in outdoor clothing & gear and generated €93 million in annual revenue (7). These case studies are inspiring examples of how corporations can redesign their products, services and income models to achieve greater sustainability while securing long-term recurring revenues. Great successes! Interested in the prerequisites to achieve this redesign? ...Then, browse the explorer and discover how to establish a carbon accounting in your company as well as how to analyse your portfolios through GHG intensity per product or service! On one hand, this will unlock your ability to set internal prices to your corporate emissions. On the other hand, you will be able to rank your products and services contributing the most to your revenues according to how much GHG they emit. Then, you might observe some profitable products and services emit too much. No worry, evaluate their decarbonisation potential: for the ones whose emissions can be lowered substantially, the redesign is a life-saving tool. Ready to jump in?
Since the First Industrial Revolution in the XVIIIth century, a main trend that has framed companies until nowadays has been to develop their activities based on the increasing use of fossil energy and fossil-based materials. Even if the whole society made efforts over the last decades, since 1800 the global fossil fuel consumption went from 97 billion kWh to 142,421 billion kWh in 2024, i.e., 1,468 times more (12). And this increasing consumption does not seem to slow down: since 2020, the historic record of consumption has been smashed each year (12). However, the proposed corporate behaviour shift can reverse this trend. We observed some companies achieved such a redesign successfully, so imagine how powerful this would be if all companies across the globe would implement it. Companies never had to develop their activities and thrive while simultaneously reducing their emissions. Yet, solving the causes of climate change to maintain a prosperous future for humanity imposes this new economic paradigm. Redesigning a company’s products and services to slash its carbon footprint and secure its revenues is a corporate best practice dedicated to help companies solve this massive challenge. An integrated, efficient redesign of your company’s offering may also imply to update overall processes. According to a 2023 study on corporate GHG emissions reduction, increasing process efficiency (e.g., through new equipment, process redesign or the use of byproducts) was the most frequently applied measure at manufacturing companies interviewed, i.e., at 91.2% among 34 (13). Indeed, to reduce GHG emissions while maintaining profitability, managing asset positions through company-wide investment (e.g., increasing energy efficiency and renewables) was pointed out as a cost-saving measure (14). Furthermore, make your efforts towards circularity easily recognisable for your customers: get the relevant labels. If you achieve a cradle-to-cradle business model for instance, the Cradle to Cradle Certified® standard is a perfect option to testify your offering is fair and safe for humans and our environment (15). By the way, to get the most out of this integrated redesign of your company’s offering, don't forget a decisive trend for a thriving business in the decades to come. According to the 2024 United Nations’ projections, the sole age group predicted to grow until 2100 is the one of 65 years old and above (16), with a world population peaking around the mid-2080s and then slowly declining (17). Companies will need to adapt their way of generating revenues and hence their business models along the present century as this trend is a paradigm shift in our demography, and hence in the demand, i.e., what makes a company alive or not.
The information presented above, is solely for the purposes of information. The Solar Impulse Foundation does not assert to possess the definitive answer but aims to present intriguing facts deemed important for consideration in our daily choices and discussions related to climate action. It does not intend to function as a moralizing entity but rather seeks to showcase societal norms that may not always be logical, while also offering better, more environmentally friendly alternatives, catered to improving the overall well-being of individuals andsociety in general.
