The Positive and Sustainable Business Case Calculation
Students are the decision-makers of the future. In projects, students advise businesses or even create their own startups. By using this tool, students can calculate the value created both in financial and social/sustainable value (based on the SDGs). The significance of sustainable practice in business is gaining traction across education. Alleviating some of the damage done to Earth is imperative, but how can this be done by companies that also have strong financial objectives to maximize profit?
How does it work?
In an accessible excel template, students and practitioners alike can test their financial business case alongside their sustainability case. This sustainability case creates a measurable impact on the United Nations Sustainable Development goals. Revenues, costs and financing are transcribed into the spreadsheet to establish the financial viability of the innovation.
The tool deviates from other financial calculators in that it integrates sustainability into the final calculation. A sustainable development goal, or multiple goals, are targeted within the business innovation. This occurs by determining the value of the ∆ SDG (Delta SDG) variable. This provides the answer to the key question- What is the positive or negative effect per product on a chosen SDG compared to a standard product? By multiplying this variable with the projected number of products sold, the projected addition to the SDG is determined.
For instance, a swap shop model that focuses on reusing clothes, to limit the amount produced, is aimed at targeting SDG 12: Responsible production and consumption. The Delta variable is assigned to SDG 12, the Q (quantity sold) is then multiplied by the delta SDG; ensuring that environmental impact and profit become codependent. The impact of the innovation then emerges in a measurable unit, in the Swap-shop case the kg of waste reduction directly lines up with SDG12. The number of items swapped are items that would otherwise been disposed of, thus by reusing them production is reduced. Therefore, the more items swapped, the bigger the waste reduction impact is, as seen in the graph below. Ergo, the tool ensures that the drive for profit, a factor usually woven into the fabric of function of most companies and entrepreneurs , is contingent on being able to have a positive impact on the SDGs. Subsequentially, two ideals that normally juxtapose; profit and societal impact, are correlated to ensure each can thrive.
Next to the finance and sustainability calculation, a combination of several practices are also available in the templates, such as Business Canvas Model, Empathy Maps and Experimentation Canvas. They can be utilized if needed, depending on the scope of the project, to provide a more in depth view of the business case.
How can you integrate it into your education program?
Thus far, the tool has been utilized by a broad spectrum of educational institutions including Erasmus University, AVANS, APE Bootcamp in Munich and a variety of education programs at HHS. Moreover, practitioners from commercial organizations have deployed the tool. Integrating the tool into your educational program will allow student to garner a more holistic approach to solving problems through entrepreneurship. The tool is, for instance, practical for use in giving organizations advice and proposals. Critically, the tool is in an accessible excel format that can be taught to students within the span of one lecture. The Lectorate Circular Business are more than happy to assist.
Want to make use of this tool in a classroom setting?
This tool was developed by Albert Kraaij ( a.kraaij@hhs.nl ) as part of his research work for research center: Circular business
Mail a.kraaij@hhs.nl for the tool and explanation.
Want to know more?
Brief video Introduction: https://youtu.be/zbERxQyk-8M
Kraaij, A., Poldner, K. BM Experimentation; A tool for calculating the financial and sustainable Business case of new Business models.
References
Bocken, N., Strupeit, L., Whalen, K., Nußholz, J. (2019). A review and evaluation of circular business model innovation tools. Sustainability, 11 (8), 2010.