Business Sustainability Typology
The Business Sustainability Typology (Dyllick & Muff 2016) offers a practical approach to evaluate different levels of integration of sustainability in business. As such, it provides an answer to the difficult question of what business sustainability actually means and how to differentiate between beginning, intermediate and advanced levels in business practice.
The framework classifies companies to different types based on their efforts to move from “business-as-usual” to “true business sustainability”, and thus provides a framework to engage in the transformation of business. The typology for business sustainability is further explained in the following video.
The Business Sustainability Typology classififies organizations into the four caterogies described below:
Business as usual: This paradigm is based on a purely economic view of the firm and the business processes. The underlying assumption is that typical economic concerns (e.g. access to cheap resources, efficient processes, striving for a strong market position) are pursued to produce economic value in the form of profit, market value or, more generally, shareholder value.
BST 1.0: In this first phase of sustainability the relevant concerns considered by business mostly shift from purely economic concerns to include social and environmental concerns related to sustainability issues faced by society. As the values created remain firmly attached to the generation of shareholder value, this is not more than a “refined shareholder value.
BST 2.0: In the second phase the value created by business shifts from shareholder value to a broadened value proposition including people, planet, and profit. This results in a “management of the triple bottom line” approach.
BST 3.0: In this third phase the organizational perspective shifts from an inside‐out perspective, with a focus on the business, to an outside‐in perspective, with a focus on society and the sustainability challenges it is facing. This shift results in the associated redefinition of strategies being driven by sustainability challenges thus reframing the business concerns and business models, as well as the associated redefinition in values created.