Towards Sustainable Businesses For The Global South:

Mai-Thi Ta^1,* Harold Levrel¹

¹ Université Paris-Saclay, AgroParisTech, CNRS, Ecole des Ponts ParisTech, CIRAD, EHESS, UMR Cired, 94130, Nogent-sur-Marne, France

*[email protected]

Extended abstract

As biodiversity directly contributes to the well-being of billions of people, its conservation needs to include development issues. Especially in developing countries, it is vital to reconcile biodiversity conservation with development objectives as local communities notably rely on biodiversity for both their livelihood and income. In addressing both livelihood improvements and biodiversity conservation, businesses play an important role. They have increasingly been called on to transform their business models to produce ecological and social co-benefits. For example, Johnson and Suskewicz (2009) consider that business-model transformations need a shift from technological innovations towards the creation of new systems and a modification of firms’ logic. For Schaltegger et al. (2012), only proactive strategies, as opposed to defensive and adaptive strategies, bring about this type of change.

It is commonly agreed that there is an urgent need to transform businesses, but effective ways to carry out such transformations are unclear. The literature on sustainable business models recognizes the importance of adopting a system-wide perspective (Stubbs & Cocklin, 2008). Recently, an “ecosystem lens” has emerged that shifts from the “firm-centric” lens (Ritala et al., 2023). This approach considers firms embedded in complex networks of interdependencies, material as well as non-material. Our research follows this approach and employs network analysis to gain a better understanding of the role of these interdependencies in transforming organizational structures. Previous studies focus on interdependencies between organizations, excluding natural resources from the scope, and consider networks as the result of an intended shared value (Derks et al., 2022; Ritala et al., 2023). In contrast, our study considers networks as an underlying mechanism for sustainable business transformation, rather than the output of intended actions. Therefore, we analyze all interactions, not just those related to economic value, to identify patterns that can either facilitate or impede the evolution of business models.

The purpose of this study is to examine innovative ways of transforming businesses by investigating the ecological and social impacts of three different business models that use the same natural resource, vicuña fiber. Vicuña is a small camelid living in the Andes that provides one of the most valuable fibers used in the textile industry. Because of its high market value, the species was overexploited and in the 1960s and was on the verge of extinction. This lead to its protection under Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). However, since 1997, live shearing of vicuñas for commercial purposes has been permitted under the framework of Appendix II of the CITES. To take advantage of this trade, various business models have been established, offering us the opportunity to compare three trade organizations – a private company, a cooperative, and a hybrid organization mixing community members and experts – and examine how they generate social and ecological co-benefits. These three organizations must all contribute to both development and conservation objectives. Indeed, the Convention for the Conservation and Management of Vicuña stipulates that the "conservation of the vicuña constitutes an economic production alternative for the benefit of the Andean population and [the signatory countries] commit themselves to its gradual exploitation under strict State control, applying such wild fauna management techniques as their competent official bodies determine." (Article 1). Thus, the use of vicuña fiber has been authorized to benefit the Andean population who lives in the extreme climatic conditions of the Puna ecosystem, characterized by a wide daily temperature range. The indigenous populations of the Puna are also part of the underprivileged classes and the use of vicuña fiber represents one of the few income resources that do not necessitate migration.

The method that we conduct is divided into three steps: the evaluation of the impacts of each business model, then the identification of causal mechanisms explaining these impacts, and finally the comparison of the mechanisms mobilized by each business model.

First, based on qualitative semi-directed interviews and documentation reviews, we examine each trade organization's social and ecological impacts, as well as the intended and unintended outcomes. The intended social impacts that we consider are income and employment generation while the intended ecological disturbances are qualified in terms of the proportion of animal shorn, respect for animal welfare. The unintended consequences are identified following the outcome mapping methodology (Earl et al., 2001). This methodology, which is inductive,  has been used in the evaluation of international development projects by organizations such as the World Bank (2014). It evaluates a project - in this case, the development of a business organization - in terms of the behavioral changes it generates. It consists of identifying these behavioral changes and then determining how the studied organization has plausibly contributed to them. This methodology is adapted to the micro-scale of our analysis and allows us to capture the complexity of each context. Therefore, based on a thorough review of existing documentation (143 academic articles and report from grey literature and 35 regulatory documents) on each business model and from 18 interviews of 14 actors involved, we describe the evolution of each business model across different periods. These narratives allow us to identify business-model changes encouraging social behaviors that also support ecological conservation.

Then, we explain these positive changes by examining the causal mechanisms that contributed to them. Here, we consider businesses not as isolated entities but rather as embedded in complex institutional networks. We, therefore, use network analysis to describe the role of each trade organization in this network and better understand how the different actors created opportunities to reconcile development and conservation. In this second step of the analysis, we determine the network generated by each business model at different periods. From the narratives we conduct, we identify the actors involved in the evolution of each business model and we qualify the interactions between these actors: what role did the actor play? With whom? How did it manifest itself? At what time and in what magnitude? With this information, we formally build the network using Rstudio version 4.2.0. with each role played by an actor corresponding to a relation between nodes.

Finally, we explore mechanisms generated by the cooperative and hybrid organization that could be used by the private organization. Based on the analysis of in-flow and out-flow relations supporting each trade organization, we explore whether similar patterns of interactions, contributing to livelihood improvement and ecological conservation, exist between the three business cases. We also describe how each business model could generate mechanisms observed in the other two business models that bring together economic development and biodiversity conservation.

We find that allowing a close fit between information and decision flows mediates the creation of social and ecological co-benefits. Our findings also demonstrate that the creation of these co-benefits expands the role of businesses beyond just resource allocation to encompass aspects such as information dissemination, knowledge building, and administrative facilitation.

In conclusion, we develop an approach to business transformation that differs from existing eco-innovation and eco-efficiency literature. Ultimately, our essay identifies general mechanisms reconciling development and conservation that could be tested in other contexts, providing practical exploration paths for practitioners.

Keywords 

Sustainable business models, development, biodiversity conservation, wild species, international trade

References 

Derks, M., Berkers, F., Tukker, A. (2022). Toward Accelerating Sustainability Transitions through Collaborative Sustainable Business Modeling: A Conceptual Approach. Sustainability, 14(7):3803.

Earl, S., Carden, F., & Smutylo, T. (2001). Outcome mapping: Building learning and reflection into development programs. IDRC, Ottawa, ON, CA.

Johnson, M., & Suskewicz, J. (2009). How to jump-start the clean tech economy. Harvard Business Review, 87(11), 52-60.

Ritala, P., Bocken, N. M., & Konietzko, J. (2023). 11 Three lenses on circular business model innovation. Handbook of the Circular Economy: Transitions and Transformation, 175.

Schaltegger, S., Lüdeke-Freund, F., & Hansen, E. G. (2012). Business cases for sustainability: The role of business model innovation for corporate sustainability. International Journal of Innovation and Sustainable Development, 6(2), 95-119.

Stubbs, W., & Cocklin, C. (2008). Conceptualizing a “sustainability business model”. Organization & environment, 21(2), 103-127.

World Bank. (2014). Cases in outcome harvesting: Ten pilot experiences identify new learning from multi-stakeholder projects to improve results.