The COVID-19 pandemic has been a singular challenge, testing the resilience and viability of many companies. Undoubtedly, there will be more dramatic challenges and opportunities to manage in the coming decade, including climate change and economic inequality. Fortunately, it is possible for business leaders to contribute to solving environmental and societal challenges through their core business, in ways that also generate new opportunities for business value and competitive advantage. This is the essence of sustainable business model innovation (SBM-I), innovations that deliver returns to shareholders and benefits to stakeholders. As companies now build back in the recovery, how can they assess which business model changes and innovations will also create the most environmental and societal value for their stakeholders?

We believe our insights from researching SBM-I can help answer that question. Crossing all industries and geographies, our research analyzed 102 SBM-I initiatives through which companies delivered both business value and environmental and societal benefits. We evaluated each initiative on the basis of its competitiveness and resilience and then tested it against six dimensions of environmental and societal benefits. (See Exhibit 1.) We believe these six dimensions holistically encompass the range of societal value that a business can generate. In fact, in today’s business context of increasing concerns about environmental and societal issues, a resilient and competitive business model must optimize for both business and social value. Generally, the traditional thinking on business model innovation has not sufficiently or rigorously incorporated how business models create value for stakeholders and the common good.