The document discusses green business models (GBM), which aim to provide environmental benefits while remaining economically viable. GBMs have the potential to enhance competitiveness and productivity, create jobs, and lower environmental impacts. However, the concept of GBMs remains elusive, posing a barrier to their dissemination. The document reviews the history of GBMs and various studies on their potential and challenges. It also provides definitions of GBMs, discusses categories and examples of GBMs, and identifies barriers that have hindered their adoption, such as a lack of knowledge and risk aversion.

1. Green Business Models
Setting the scene…
11 December 2013

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
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Green Business Models

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Green Business Models

4. History
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A relative recent phenomenon - with roots in the research
community (SusProNet, EU Fifth Framework Programme)
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Significant increase in (popular) interest in the topic within
the past five years
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Despite the substantial interest in the phenomenon, the
level of green business model activity continues to be low
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Proliferation of studies of green business model potential
and challenges in recent years
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Green Business Models

5. Studies of GBM – some examples
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EU Commission (2008): Promoting Innovative Business Models with Environmental Benefits
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FORA (2010): Green Business Models in the Nordic Region
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Nordic Innovation (2012): Green Business Model Innovation
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US Environmental Protection Agency (2009): “Green Servicizing” for a More Sustainable US
Economy”
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Ellen MacArthur Foundation (2012 og 2013): Towards the Circular Economy (Vol. 1 og 2)
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OECD (2013): Why New Business Models Matter for Green Growth
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EU (2013): Exchange of good policy practices promoting Innovative/Green Business Models
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McKinsey & Company (2011): Resource Revolution
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Green Business Models

6. GBM potential
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Green business models have the potential to:
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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. Some definitions
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What is a green business model?
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“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)
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“…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)
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An innovative/new business model with positive economic and
environmental benefits?
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Green Business Models

8. GBM classification
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Two main categories of green business models:
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Incentive models / product-service systems
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Lifecycle models / coordination benefit models
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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. GBMs – an overview
Incentive models
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Functional sales
ESCO (Energy Saving
Companies)
Chemical Management Systems
(CMS)
DBFO (Design Build Finance
Operate)
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Green Business Models
Lifecycle / coordination
benefit models
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Cradle-to-cradle
Industrial symbiosis
Sharing models
Take back agreements
Remanufacturing

10. Recent policy initiatives
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GBM pilot program (financed by Fornyelsesfonden, now
Markedsmodningsfonden)
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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
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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. Barriers
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Stretchy concept – makes it difficult to accumulate knowledge and lessons
learned
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Lack of knowledge and competencies to develop green business models
(legal, financial, commercial, technical, and environmental) (incl. integration of
competencies)
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A need for specifying and, perhaps more importantly, communicating exact
effects
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Investment in green business models considered a risky business
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Traditional mindsets (e.g. the shift away from ownership (product) to service)
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Lack of professional, cross-sectoral networks and supporting institutional
structures
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Green Business Models

12. Contact information
Guri Weihe | Manager
EY P/S
Gyngemose Parkvej 50
2860 Søborg
Denmark
Cell: +45 5158 2897 | Office: +45 7010 8050 |
Mail: guri.weihe@dk.ey.com
Website: http://www.ey.com
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