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by Guri Weihe

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  1. 1. Green Business Models Setting the scene… 11 December 2013
  2. 2. Key statements Green business models (GBM) contain a promising economic as well as green potential The elusiveness of the GBM concept is a significant barrier for its further dissemination Page 2 Green Business Models
  3. 3. Page 3 Green Business Models
  4. 4. History ► A relative recent phenomenon - with roots in the research community (SusProNet, EU Fifth Framework Programme) ► Significant increase in (popular) interest in the topic within the past five years ► Despite the substantial interest in the phenomenon, the level of green business model activity continues to be low ► Proliferation of studies of green business model potential and challenges in recent years Page 4 Green Business Models
  5. 5. Studies of GBM – some examples ► EU Commission (2008): Promoting Innovative Business Models with Environmental Benefits ► FORA (2010): Green Business Models in the Nordic Region ► Nordic Innovation (2012): Green Business Model Innovation ► US Environmental Protection Agency (2009): “Green Servicizing” for a More Sustainable US Economy” ► Ellen MacArthur Foundation (2012 og 2013): Towards the Circular Economy (Vol. 1 og 2) ► OECD (2013): Why New Business Models Matter for Green Growth ► EU (2013): Exchange of good policy practices promoting Innovative/Green Business Models ► McKinsey & Company (2011): Resource Revolution Page 5 Green Business Models
  6. 6. GBM potential ► Green business models have the potential to: ► ► ► ► ► ► ► Page 6 Enhance company competitiveness / cost competitiveness of businesses (incl. cost savings for customers) Increase productivity Create jobs Lower environmental impacts / increased energy (resource) efficiency Serve as a catalyst for innovation Support company branding Increase motivation amongst workers Green Business Models
  7. 7. Some definitions ► What is a green business model? ► “Green business models are business models which support the development of products and services (systems) with environmental benefits, reduce resource use/ waste and which are economic viable. These business models have a lower environmental impact than traditional business models” (FOR A 2010) ► “…the use of innovative technological or non-technological solutions and / or cooperation with other market actors, leading to increased economic or environmental efficiency, resulting in the achievement of a business model more 'decoupled' from environmental costs (European Commission, 2013) ► An innovative/new business model with positive economic and environmental benefits? Page 7 Green Business Models
  8. 8. GBM classification ► Two main categories of green business models: ► Incentive models / product-service systems ► ► Lifecycle models / coordination benefit models ► Page 8 A common denominator is the innovative division of risk between the contracting parties, altered incentive structures, longer-term relations (strategic partnerships), and a general shift from selling products to selling services /functions Models based on a holistic life cycle perspective, which includes the entire value chain from the purchasing of resources to the reuse of products. Business models that exploit the proximity of agents (sharing models) Green Business Models
  9. 9. GBMs – an overview Incentive models ► ► ► ► Functional sales ESCO (Energy Saving Companies) Chemical Management Systems (CMS) DBFO (Design Build Finance Operate) Page 9 Green Business Models Lifecycle / coordination benefit models ► ► ► ► ► Cradle-to-cradle Industrial symbiosis Sharing models Take back agreements Remanufacturing
  10. 10. Recent policy initiatives ► GBM pilot program (financed by Fornyelsesfonden, now Markedsmodningsfonden) ► ► ► ► Overall aim: advance the use of GBM in Danish companies Five companies continued into phase 2 of the program in July 2013 Project period: October 2012 – July 2014 Acceleratorprogram for GBM ► ► ► ► ► Page 10 Established by the Green Restructuring Fund, the Danish regions and Bornholms regional municipality Overall aim: advance the use of GBM in Danish companies Provides financial support and advise on how to implement GBM Applications are currently being reviewed (56 applications received) Phase 1 will be implemented in January 2014 and continues over a six month period Green Business Models
  11. 11. Barriers ► Stretchy concept – makes it difficult to accumulate knowledge and lessons learned ► Lack of knowledge and competencies to develop green business models (legal, financial, commercial, technical, and environmental) (incl. integration of competencies) ► A need for specifying and, perhaps more importantly, communicating exact effects ► Investment in green business models considered a risky business ► Traditional mindsets (e.g. the shift away from ownership (product) to service) ► Lack of professional, cross-sectoral networks and supporting institutional structures Page 11 Green Business Models
  12. 12. Contact information Guri Weihe | Manager EY P/S Gyngemose Parkvej 50 2860 Søborg Denmark Cell: +45 5158 2897 | Office: +45 7010 8050 | Mail: Website: Page 12 Green Business Models