Unfinished Products

A brief analysis and sample of the importance to firmly link sustainability to value proposition

Value proposition represents the entirety of attributes and benefits, wherever tangible or intangible, a given company promises to deliver. The value, as a combination of emotional, functional, economic and symbolic reflections, represents the experience customers or consumer will gain from the product or service. The ability for a company to deliver consistent value, creates the essence of the company’s brand (Kotler, P. and Keller K, 2019).

An example of business worth mentioning is Cana, an innovative drink start-up who introduced molecular beverage printer products (Cana, 2023).

Between the tangible and intangible benefits a molecular beverage printer product could offer, this article prioritizes the following:

• Meet the demands of cause-motivated consumers.
• Responsibility: digital technology used to produce onsite drinks drastically reduces waste as for packaging and energy going into the distribution. Water, the main ingredient of soda drinks (Coca-Cola, 2020) is sourced at the consumer’s premises removing the need for the beverage industry to process and to transport water. 
• Customization [uniqueness] of the beverage.
• Control: ingredients and quantities selection to fully fit consumer’s taste and diet.

Those value propositions are relevant to commercial enterprise as they address the raising expectation from new generation of consumers towards brands to address the climate change crisis (Deloitte, 2021). The trend is reflected in corporates’ increasing commitments to net-zero emissions goals (The Economist, 2022). At the same time, consumers attitude in enjoying food and beverages has been emphasizing more personalization as well as mental, emotional and physical experience (Supermarket News, 2022; The New York Times, 2022).

In this context a business like Cana creates a powerful connection between the offered service of molecular drinks printing and the consumer. By fully empowering the consumer in making their drink desires more environment friendly and unique to enjoy, for example Cana offers a highly differentiating product distinguishing itself from the competition.  

Looking at sustainability more broadly and looking at its notion of “meeting the needs of the present without compromising the ability of future generations to meet their own needs” (United Nations, 1987), this article briefly investigates how business should define value propositions responsible and responsive for the environment and stakeholders needs.

Despite the social and political attention on sustainability, companies still straggle to find simple effective sustainability messages and actions (HBR, 2022; Accenture, 2021). Various frameworks and agencies have been introduced to support sustainability and to advance the adoption of sustainable practices. That said the proliferation of those practices is leading to inaccurate, difficult to be verified and contracting data (HBR, 2022) with even more concerning misleading remediation practices (The Guardian, 2023).

To effectively pursuits sustainable objectives, organizations are considering how to strategically integrate those responsible behaviours in their business models. Organizations should decompose each part of their model and analyse what transformation is required. Organizations should elevate their responsible behaviours considering the following reflections:

• value proposition: sustainability should be reflected in any of the functional, economic, symbolic, emotional or end aspect of the value offered to customers.  
• resources and activities: organizations should link environmental impact to financial performances so to consistently create capabilities optimizing both costs and emissions (The Economist, 2022).
• revenue model: organization should favour and encourage consumption versus ownership to avoid overconsumption of natural resources (WBCSD, 2020).
• scope (customers segment to serve, set of products and value chain the organization engages with): in governing and reducing emissions companies are still facing structural difficulties in managing their entire – upstream and downstream – network emissions classified as Scope 3 (The Economist, 2022).

For example, if we analysed the business model of the top three sustainable corporations according to the 100 most sustainable corporations index of Corporate Knights (Corporate Knights, 2022), all the three organizations stress how the sustainable approach provides value to their customers hence their commitment on impacting the Scope 3 of their value proposition. Vestas the leading sustainable corporate, stands out by defining its sustainability strategy to be everything the company does (Vestas, 2023).

Vesta’s sustainability goal is to become carbon neutral by 2030 with no use of carbon offsets. Vesta pledges to achieve a complete adoption of circular economy practice making its turbines zero-waste by 2040, and to become the most diverse and inclusive model company in its industry so to lead the transformation to a decarbonized global energy industry.

Vestas’s business model leverages the company ability to innovate at scale the renewables energy technology, engaging within its ecosystem and its global footprint so to provide tangible emission reduction value to its customers (Vestas, 2023).

Chr. Hansen deploys its resources (e.g., human, intellectual, natural, manufacturing, social and financial capital) and its value chain activities (from research and development to sales and application) to achieve an outcome of a more sustainable food and agriculture system. Chr. Hansen puts effort in having its production process emissions counterbalanced by far from the positive sustainable value it delivers to its customers (Chr Hansen, 2023). Chr. Hansen contextualized in its strategy the usage of renewable energy and circular models so to reduce its production environmental footprint (Chr Hansen, 2020).

Autodesk, known for the dominant computer-aided design software package AutoCAD, leads the Building Information Modeling (BIM) market with its Revit solution (The Motley Fool, 2022). BIM, as the built asset comprehensive management process, defines the digital transformation of the construction industry. Being the construction industry one the larger polluters in the world (Statista, 2023), BIM solutions become critical to optimize the entire assets lifecycle – from planning and design to construction and operations – in achieving sustainability goals (Autodesk, 2023).

By changing its delivery model to Software as Service (Seeking Alpha, 2021), Autodesk embeds sustainability in its operations with renewable energy powering Autodesk’s facilities and cloud data centers achieving carbon neutrality across its operations and its value chain (Autodesk, 2023).

Linking sustainability to business-model transformation is required to truly achieve sustainable goals (The Economist, 2022).

The moment sustainability and business model are disjunct, companies are at risk of incurring in greenwashing behaviours.

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For example, the tobacco industry has been very active in sustainability programs and delivered tangible results in reducing emissions chasing net-zero goals (SBTi, 2021). That said, the business model of the industry, based on selling products that harm the health of its own customers and second-hand smokers, makes the industry’s sustainable deep intent not credible (Tobacco Tactics, 2022; STOP., 2022, Houghton F. & Houghton S. & O’ Doherty D. & McInerney D. & Duncan B., 2018; European Parliament, 2014).

List of References

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Autodesk (2023) Inspiring sustainable design and innovation. Available at: https://www.autodesk.com/sustainability/overview [Accessed: 05/03/2023]

Cana (2023) Waste not, want now. Available at: https://www.cana.com/ [Accessed: 05/03/2023]

Chr Hansen (2020) Chr. Hansen launches 2025 Strategy with the ambition to create a differentiated bioscience leader to improve food and health for a sustainable future. Available at: https://www.chr-hansen.com/en/media/press-releases/2020/8/chr-hansen-launches-2025-strategy-with-the-ambition-to-create-a-differentiated-bioscience-leader [Accessed: 05/03/2023]

Chr Hansen (2023) Business. Available at: https://www.chr-hansen.com/en/investors/business [Accessed: 05/03/2023]

Coca-Cola (2020) Do caffeinated drinks like Coca‑Cola count towards my recommended daily water intake?. Available at: https://www.coca-cola.co.uk/our-business/faqs/do-caffeinated-drinks-like-coca-cola-hydrate [Accessed: 05/03/2023]

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European Parliament (2014) Directive 2014/40/EU of the European Parliament and of the Council of 3 April 2014 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products and repealing Directive 2001/37/EC Text with EEA relevance – Article 13 Available https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32014L0040 [Accessed: 11/12/2022].

HBR (2022) How Sustainability Efforts Fall Apart. Available at: https://hbr.org/2022/09/how-sustainability-efforts-fall-apart [Accessed: 05/03/2023]

Houghton F. & Houghton S. & O’ Doherty D. & McInerney D. & Duncan B. (2018) ‘Greenwashing’ tobacco products through ecological and social/equity labelling: A potential threat to tobacco control. Tobacco Prevention & Cessation, 4(November), 37 Available at: https://doi.org/10.18332/tpc/99674 [Accessed: 11/12/2022].

Kotler, P. and Keller K. (2019) Marketing management. (4th European ed.) Harlow: Pearson. 

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Seeking Alpha (2021) Autodesk: A Cash Generating Machine. Available at: https://seekingalpha.com/article/4456047-autodesk-a-cash-generating-machine [Accessed: 05/03/2023]

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The Guardian (2023) Revealed: more than 90% of rainforest carbon offsets by biggest certifier are worthless, analysis shows. Available at: https://www.theguardian.com/environment/2023/jan/18/revealed-forest-carbon-offsets-biggest-provider-worthless-verra-aoe [Accessed: 05/03/2023]

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Vesta (2023) Sustainability in Everything We Do. Available at: https://www.vestas.com/en/sustainability/sustainability-strategy [Accessed: 05/03/2023] WBCSD (2020) Rethinking ownership in a circular economy. Available at: https://www.wbcsd.org/Overview/Panorama/Articles/Rethinking-ownership-in-a-circular-economy [Accessed: 05/03/2023]