How can you develop a business model that is resilient to climate change?

Understanding the context is crucial for a resilient business model, especially in the face of climate change. However, it's vital to go beyond traditional SWOT and PESTEL analyses. The key is dynamic adaptability. Businesses must develop a 'climate intelligence' that is not just reactive but predictive, integrating climate data into strategic planning and operational decision-making. This involves leveraging advanced analytics and AI to forecast climate-related risks and opportunities. Furthermore, engaging in collaborative innovation with stakeholders across the value chain can uncover unique insights and solutions for sustainability challenges.

Something I believe fundamental is to tackle climate of course but in a global ecological context, including nature and resources. Some would say even planetary boundaries, but these latest are 9 indicators which are not mutualy exclusive and collectively exhaustive MECE. To understand the external context, eg materiality, or double materiality can be used here to evaluate the pression the company does on nature, but then the risk the corp have against the degredated regulation of climate provoking storm, floods, lack of water. These interupt the supply chain, block factories. Finally, beyond SWOT, the organisation shall also run an internal diagnosis to identify its strenghs and weakness, based on a dedicated model ( see Morel 2014)

To consider integrating the concept of stakeholder engagement into the original proposal. Emphasizing the importance of involving key stakeholders, including customers, employees, and local communities, in the analysis process can provide valuable insights and foster a collaborative approach to addressing climate-related challenges. This can enhance the overall resilience and sustainability of the business model.

For me, the most important elements are as follows: Conduct a climate risk assessment, identifying risks to operations, the supply chain and customers. diversify supply chains to reduce dependence on a single source and limit climate-related disruptions Invest in green technologies to adopt sustainable practices and mitigate environmental impact. Implement adaptation strategies to adjust operations and offerings to changing climatic conditions.

A resilient business model is one that tries to maintain existing operations, in the current global context (Environmental, Social, Geopolitical, Economic etc.). Creating business resilience as a competency requires four sub-skills and processes; predicting risks, preparedness for risks, response to issues and recovery from issues. Most businesses understand this, but they need to be prepared to deal with increasingly complex, non-linear and emergent risks and issues e.g. water scarcity, resource scarcity, rising geopolotical tension, changing workers rights. Whilst creating resilience is important, it is also important to adapt, as we see climate change will occur at some extent already, and bring related issues.

The value proposition is indeed pivotal. However, it's crucial to recognize that the effectiveness of tools like the value proposition canvas or the jobs-to-be-done framework hinges on deep market understanding. In today's dynamic market, a static value proposition risks obsolescence. It's not just about solving a problem but evolving with the problem.

Defining value propositions can be complex. However, for many value propositions which can address environmental issues, there is a nice correlation with cost reduction (even without natural capital accounting to include environmental externalities). Reducing energy usage, during product creation or during customer use, or reducing material required in production or wasted by customer both lead to economic benefits for customer and producer. Social benefits are more difficult to quantify and communicate, in such a simple way, but this also goes for other environmental issues e.g. pollution or land use change. These require propositions that are more complex and may require education of customers, legal support or adapted cost accounting.

Value proposition is commercialization. Best products and services survive the test of time because they define human existence. If your product or service is not an that level, at least try to push it to a level that can enrich human existence. Rest of all is noise.

In addition to defining the value proposition, consider incorporating a focus on ongoing adaptation. Acknowledge the dynamic nature of customer preferences and societal values, emphasizing the need for continuous refinement and evolution of the value proposition to stay relevant in a changing market landscape. This adaptability ensures that the business remains responsive to emerging trends and sustains its competitive edge over time.

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I believe that the hardest part here is questioning a business model that has been successful so far... until it's too late for the business to survive with climate change. I recommend leveraging the Innovation techniques and especially the Design Sprint. It creates the needed disruption of thinking and brings all stakeholders in one week, to launch the innovative process and gain adoption at the company level.

Designing value delivery is pivotal in shaping a sustainable, competitive advantage. It's not just about optimizing processes for efficiency; it's about rethinking how value is created and delivered. Embracing models like the circular economy isn't just an ethical choice, but a strategic one, aligning with evolving consumer expectations and regulatory landscapes. These models demand a deep understanding of the entire value chain, necessitating robust, dynamic relationships with all stakeholders. Tools like the Business Model Canvas are instrumental, but their real power lies in their application, not just in their use.

Value delivery is not a process. It is a way of life for a given enterprise. In saying so I mean this is to define the why and the how of organizational existence, including how that meaningfulness of yours is rhyming through the lives of your customers and all stakeholders you are touching through your products and services.

To enhance the value delivery, consider incorporating a strong emphasis on technology integration. Leverage digital solutions and automation to streamline processes, enhance customer experiences, and gather valuable data for continuous improvement. Additionally, explore opportunities for incorporating sustainable technologies that align with the business goals, fostering both efficiency and environmental responsibility. This technological focus can contribute to a more resilient and future-ready value delivery system.

The emphasis on measuring and improving impact is crucial for contemporary business models, especially in the context of sustainability and corporate responsibility. The integration of KPIs aligned with objectives and values is a fundamental step, but it's equally important to ensure these indicators are dynamic and adaptable to changing market and environmental conditions. The use of tools like the balanced scorecard, triple bottom line, and the Global Reporting Initiative provides a comprehensive framework for assessment. However, the challenge often lies in the interpretation and application of these tools in a way that is both meaningful and actionable.

All KPIs must be included in performance management and reward system of the company and not as an 'addition', in order to ensure delivery. The KPIs used will likely need to be expermineted with to see what works best for this organisation. Looking to existing Scientific and NGO/CSO frameworks and benchmarks on how to measure social or environmental issues is a good start, and creating business activity proxy KPIs that impact the external issue e.g. CO2E/Ton/KM in logistics is an accepted measure of pollution for many organisations. Learnign by doing will be key in these early years, and companies will need to be flexible as norms develop in measuring sustainability.

In addition to measuring and improving impact, consider integrating a focus on transparency and accountability. Implement a robust system for transparent reporting, disclosing not only positive outcomes but also challenges and areas for improvement. Emphasize accountability to stakeholders by actively seeking and responding to their input. This fosters trust and demonstrates a commitment to continuous improvement, enhancing the credibility and long-term success of the business model.

Key to the organizational existence has shifted from technology and innovation to value creation. Organizational existence is the best form of harvesting human intellect for a given purpose. Technological innovation is the best endeavor to improve peaceful coexistence, and it could be anything else if that is our prime focus. So what would it be?

I think it's crucial for businesses to foster a culture of sustainability and social responsibility throughout their operations. This involves not only structural changes but also instilling values among employees. Companies can implement training programs, recognition systems, or even corporate social responsibility initiatives that empower employees to contribute to the organization's broader impact goals. By nurturing a sense of purpose among the workforce, businesses can amplify their positive influence on the environment and society.