How can Retailers Take Responsibility? Responsible Business Model Innovation in the Retail Industry

- a Qualitative Approach

Anna Christina Rosenqvist & Silje Sørfonn Moe

Supervisor: Tina Saebi

Master Thesis in Marketing and Brand Management & Strategy and

Management

NORWEGIAN SCHOOL OF ECONOMICS This thesis was written as a part of the Master of Science in Economics and Business

Administration at NHH. Please note that neither the institution nor the examiners are

responsible − through the approval of this thesis − for the theories and methods used, or results

and conclusions drawn in this work.

Norwegian School of Economics

Bergen, fall 2015

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Preface This master thesis is one of a series of papers and reports published by the Center for Service

Innovation (CSI). CSI is a coordinated effort by NHH to focus on the innovation challenges

facing the service sector and involves 20 business and academic partners. It aims to increase

the quality, efficiency and commercial success of service innovations and to enhance the

innovation capabilities of its business and academic partners. CSI is funded through a

significant eight year grant from the Research Council of Norway and has recently obtained

status as a Centre for Research-based Innovation (SFI).

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Acknowledgements The subject of this Master Thesis is responsible business models in the retail industry. We use

business model and business model innovation as tools to analyze how retailers are

implementing responsible business practices. The work has given us valuable insight into the

retail industry, and how retailers can have a positive impact on the environment and society.

After this extensive work, we hope to gain further insight into these topics during our careers.

First of all, we would like to sincerely thank our supervisor, Tina Saebi, for good facilitation,

rich feedback and constructive ideas during the whole process. Your engagement has

surpassed what we expected from a supervisor. Thank you for your fantastic help and

involvement.

Secondly, we would like to thank CSI for their generous funding for the research reported in

this Master Thesis, and Irene Haukås Moe for her kind support and help.

Thirdly, we would like to extend our gratitude to all interviewees for their time and their

valuable input, which allowed us to incorporate first-hand insight into our thesis. We would

like to thank the CR Manager at Stormberg, Jan Halvor Bransdal, the Sustainability Manager

at H&M, Benedicte Brinchmann Eie, and the Sustainability Manager at IKEA, Anders

Lennartsson. In addition, we would like to thank Camilla Skjelsbæk Gramstad, Environment

and CSR Responsible at Virke, for her guidance and valuable input concerning the retail

industry.

Lastly, our gratitude goes to our family and friends for their continuous support during the

whole process of writing our Master Thesis.

We wish you all a good read!

Anna Christina Rosenqvist Silje Sørfonn Moe

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Abstract Retailers are widely recognized to have the greatest impact on the environment and society.

In order to shape a sustainable future, retailers must take responsibility for their impact.

However, managers seem to lack the required know-how and strategies on how to implement

responsible business practices into their business models. To address this knowledge gap, we

first identify the different types of responsible business models in the retail industry, by

analyzing a sample of 72 international retailers. This allows us to show how responsible

business practices are being implemented in the different models. Second, based on a multiple-

case study with in-depth interviews, we develop a step-by-step framework for business model

innovation, illustrating how retailers can shift towards more responsible business models and

highlighting the common challenges.

Our findings generated six types of responsible business models that differ in terms of the

extent to which environmental and societal goals are integrated into the business model: The

Reinventor, The Green Enthusiast, The Teacher, The Team Player, The Supply Chain

Manager, and The Problem Solver. In order to successfully shift towards a more responsible

business model, our thesis indicates the importance of management support to drive business

model innovation and motivate the entire company to be a part of the change.

Hereby, our thesis contributes to the emerging literature on responsible business models by

illustrating how responsible business practices can be integrated into firms’ business models.

Exploring this in the context of the retail industry, enables us to provide retailers with a

comprehensive overview of relevant responsible business models. We present state-of-the-art

literature on the emerging field of business model innovation, and offer practical

recommendations on how retailers can have a positive impact on the environment and society.

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Contents

1. INTRODUCTION .............................................................................................................................9  

1.1 RESEARCH QUESTION AND OUTLINE OF THE THESIS ...................................................................11  

2. RESPONSIBLE BUSINESS PRACTICES ...................................................................................13  

2.1 DEFINING CORPORATE SOCIAL RESPONSIBILITY, SUSTAINABILITY AND

RESPONSIBLE BUSINESS PRACTICES ..................................................................................................13  2.2 THE NEED FOR RESPONSIBLE BUSINESS PRACTICES IN THE RETAIL INDUSTRY ..........................17  

3. RESPONSIBLE BUSINESS MODELS: A CONCEPTUAL FRAMEWORK ..........................22  

3.1 DERIVING A BUSINESS MODEL DEFINITION AND FRAMEWORK ...................................................22  3.2 DEFINING RESPONSIBLE BUSINESS MODELS ...............................................................................24  3.3 RESPONSIBILITY AS BUSINESS MODEL INNOVATION ...................................................................28  

4. METHODOLOGY ..........................................................................................................................31  

4.1 PURPOSE OF THE THESIS AND CHOICE OF METHODOLOGY ..........................................................31  4.2 THE THESIS’ MAIN STEPS ............................................................................................................32  4.3 EVALUATION OF THE RESEARCH METHOD ..................................................................................38  

5. ANALYSIS AND FINDINGS .........................................................................................................40  

5.1 THE EMERGING TYPES OF RESPONSIBLE BUSINESS MODELS IN THE RETAIL INDUSTRY .............40  THE REINVENTOR    ............................................................................................................................41  THE GREEN ENTHUSIAST ...................................................................................................................43  THE TEACHER ....................................................................................................................................46  THE TEAM PLAYER ............................................................................................................................48  THE SUPPLY CHAIN MANAGER    ........................................................................................................49  THE PROBLEM SOLVER ......................................................................................................................51  5.2 SHIFTING TOWARDS MORE RESPONSIBLE BUSINESS MODELS IN THE RETAIL INDUSTRY ...........54  1. INITIATION: UNDERSTANDING THE NEED FOR CHANGE ................................................................55  2. IDEATION: REFRAMING BELIEFS ....................................................................................................55  3. INTEGRATION: DELIVERING A STRATEGIC APPROACH ..................................................................57  4. IMPLEMENTATION: GOING FROM A TO B .......................................................................................57  5. CONTINUOUS BUSINESS MODEL INNOVATION: BEING OPEN FOR CHANGES .................................60  5.2.1 CONCLUDING REMARKS ............................................................................................................61  

6. DISCUSSION AND CONCLUSION .............................................................................................62  

6.1 WHAT ARE THE EMERGING TYPES OF RESPONSIBLE BUSINESS MODELS

IN THE RETAIL INDUSTRY? ................................................................................................................62  6.2 HOW CAN RETAILERS SHIFT TOWARDS MORE RESPONSIBLE BUSINESS MODELS? .....................64  6.3 MANAGERIAL IMPLICATIONS .......................................................................................................65  6.4 THEORETICAL IMPLICATIONS ......................................................................................................66  

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6.5 LIMITATIONS AND FUTURE RESEARCH ........................................................................................67  

7. REFERENCES .................................................................................................................................69

8. APPENDIX........................................................................................................................................77

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List of Figures and Tables

Figures Figure 1: The outline of the thesis .......................................................................................... 11  

Figure 2: The Business Model and its four pillars .................................................................. 23  

Figure 3: The Responsible Business Model and its four pillars ............................................. 26  

Figure 4: The main steps of the thesis .................................................................................... 32  

Figure 5: Overview of the responsible business models ......................................................... 41  

Figure 6: The Reinventor ........................................................................................................ 41  

Figure 7: The Green Enthusiast .............................................................................................. 43  

Figure 8: The Teacher ............................................................................................................. 46  

Figure 9: The Team Player ..................................................................................................... 48  

Figure 10: The Supply Chain Manager ................................................................................... 50  

Figure 11: The Problem Solver ............................................................................................... 51  

Figure 12: The main challenges and success factors from each stage .................................... 54  

Tables Table 1: Dimensions of CSR .................................................................................................. 14  

Table 2: Overview - Some selected definitions of CSR and sustainability ............................ 15  

Table 3: Barriers to responsible business practices in the retail industry ............................... 21  

Table 4: Definitions and components of the most commonly used business models. ............ 22  

Table 5: Selected definitions of responsible business models ................................................ 25  

Table 6: Bocken et al.’s (2014) archetypes of sustainable business models. ......................... 27  

Table 7 The 5 Stages of a Business Model Innovation Process ............................................. 30  

Table 8: Phases in generating types of responsible business models ..................................... 34  

Table 9: Reasons for sample choice ........................................................................................ 37  

Table 10: Overview of the interviewees ................................................................................. 38  

Table 11: Summarization of the responsible business models ............................................... 54  

Table 12 : Showing the different systematic integration approaches ..................................... 57  

Table 13: A systematic framework for business model innovation for responsibility ........... 61  

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We’re shaping a sustainable future,

and you need to be a part of it. (United Nations Global Compact, 2015)

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1. Introduction There are two pressing needs for why retailers need to adopt responsible business models.

Firstly, crucial challenges such as decreasing resources, global warming and human rights

issues are challenges that need to be dealt with. Secondly, finding innovative solutions to

tackle these issues can lead to competitive advantages. Hence, business as usual cannot

continue. At the United Nations Conference on Climate Change in Paris, December 2015, the

world is going to agree on how to solve the climate challenges. Retailers must participate in

solving these challenges, considering that they are widely recognized to have the greatest

impact on the environment and society (Jones, Wynn, Comfort & Hillier, 2007). In addition,

retailers have great impact on consumers’ purchasing decisions (Sorescu, Frambach, Singh,

Rangaswamy & Bridges, 2011), which implies that retailers have power to influence the whole

value chain. As of today, retailers are an untapped source for guiding the global green shift

(Gramstad, referred in Sørheim & Visjø, 2015).

An increasing number of scholars are examining corporate social responsibility and

sustainability in the retail industry. We respond to this prior work and call for future research

on the retail industry’s transformation and challenges. Heyes (2014), for instance, explains

how retailers must argue for their existence of being a consumer-focused and profit-

maximizing industry, in a world struggling with environmental shifts and human rights issues.

The retail industry is therefore characterized by a need for new and innovative business models

to address both environmental and societal challenges.

In line with extant literature we define responsible business models as organizational

designs where societal and environmental considerations are integrated parts of how value is

created, delivered and captured. Hereby, our definition encompasses both environmental as

well as societal goals, which is essential considering the impact retailers’ decisions and actions

have, on both the environment and society.

Based on literature review, research on industry practices and expert interviews that

we conducted for the purpose of this thesis, there are two important reasons for why retailers

are resistant to implement responsible business models: (1) There lacks a clear

conceptualization of the different types of responsible business models that retailers can adopt,

and (2) there lacks an understanding on how to implement responsible business practices into

the business model.

Our aim is therefore to contribute to a better understanding on how retailers can have

a positive impact on the environment and society, by designing responsible business models.

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So far, practitioners are confused about which aspects of social responsibility they should

apply, what governance model they should adopt, and their role in society (Blaga, 2013). More

precisely, it is not clear how responsibility can be integrated into the business model and what

types of responsible business models are available for retailers. The majority of research on

responsible business models is limited to single-case studies, delivering in-depth analysis of

one particular company’s business model. Typically, this stream addresses the emergence of

responsible business practices in a particular setting, such as in second hand retailing (e.g.,

Hvass, 2015), and how various green initiatives affect the components of a business model

(e.g., Morgan, 2015; Joule, 2011). Another stream is looking at a specific sector, for example

hotels (e.g., Mihalič, Žabkar & Cvelbar, 2012), pharmaceutical biotechnology (e.g., Grønning,

2013; Carbone, 2003), e-retail (e.g., Niraj & Nageswara, 2015; Edvardsson & Enquist, 2011),

food manufacturing (e.g., Hemphill, 2013), banking (e.g., Stubbs & Cocklin, 2008), and the

public sector (e.g., Osborne, Radnor, Vidal & Kinder, 2014). Among the reviewed

studies, only one study has offered archetypes of sustainable business models (Bocken, Short,

Rana & Evans, 2014). However, as the term sustainable implies, these archetypes have a

stronger emphasis on environmental innovation, which implies that research lacks exploration

of societal business models. Furthermore, these archetypes seem too broad for the purpose of

this study, as they are not directed towards identifying responsible business models in the retail

industry. To this end, we intend to generate the first comprehensive typology of responsible

models in the retail industry.

Second, we aim to provide retailers with a complete overview on how to shift towards

more responsible business models. Scholars agree that sustainable innovation involves

changes in organizational designs, and therefore requires business model innovation (e.g.,

Boons, Montalvo, Quist & Wagner, 2013; Blaga, 2013; Jørgensen & Pedersen, 2013).

However, how exactly this transformation can take place has not been addressed sufficiently

in extant sustainability and business model literature. For example, research on sustainable

business models has either focused on developing new business model ideas with a focus on

sustainability (e.g., Girotra & Netessine, 2013; Eppler, Hoffman & Bresciani, 2011),

investigating the triggers for sustainable business model innovation (e.g., Hansen, Lüdeke-

Freund, Quan & West, 2013) or highlighting the common barriers and threats enterprises must

overcome during a change for sustainability (e.g., Laukkanen & Patala, 2014; Pedersen &

Andersen, 2015). As Heyes (2014) confirms, the sustainability literature lacks a common

understanding of business model innovation for sustainability. Similarly, the business model

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literature has predominantly focused on the need for business model innovation (e.g.,

Chesbrough, 2007; Johnson, 2010), but less on how the innovation should be carried out in

practice (Frankenberger, Weiblen, Csik, & Gassmann, 2013). Hence, more research on how

business model innovation for responsibility can be carried out in practice, particularly with

regards to challenges and critical capabilities, is required. To this end, we derive a step-by-

step framework for business model innovation.

1.1 Research Question and Outline of the Thesis To address the mentioned gaps in the literature, we intend to answer the following research

question:

  

What are the emerging types of responsible business models in the retail industry, and

how can retailers shift towards more responsible business models?   

  

In order to answer our research question,

we will clarify the concepts of corporate

social responsibility and sustainability,

and how these can be translated into

responsible business model designs.

We further identify the main drivers and

barriers for responsible business

practices, which lead to the emergence

of new business models in the retail

industry. We do so by reviewing existing

literature, identifying industry practices,

and conducting in-depth interviews

with selected retailers. This enables us

to generate types of responsible business

models in the retail industry, and derive

a step-by-step framework for business

model innovation. Figure 1 illustrates the

outline of the thesis.

Our findings offer valuable contributions. First, by adopting a business model

perspective, we are able to explain how responsible business practices can be integrated into

Literature Review Ch.2: CSR, Sustainability, Drivers and Barriers

Ch.3: Responsible business models and innovation

Methodology Ch.4: Identifying gaps in literature. Secondary data collection and multiple-case study with interviews

Analysis and Findings Section 5.1: Types of responsible business models

Section 5.2: Framework for business model innovation

Discussion and Conclusion Ch.6: Discussion of findings, managerial and

theoretical implications

Figure 1: The outline of the thesis

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the different pillars of a retailer’s business model. Based on our analysis of 72 retailers, we

generate six types of responsible business models. We hereby reach beyond the single-case

study approach that is dominating extant literature on sustainable business models.

Furthermore, our definition of responsible business models encompasses both environmental

and societal goals, hereby reaching beyond a mere focus on environmental aspects. Second,

our typology of responsible business models can help to further enrich existing business model

literature. As Lambert (2015) points out, the business model literature lacks a systematic

approach to the development of business model classifications. Hence, our approach in

deriving responsible business model types for retailers can serve as a useful example for

business model classification in other industry contexts as well.

Third, our business model innovation framework details the challenges and critical

capabilities in shifting towards a more responsible business model. Hereby, we advance

understanding of how practitioners can prepare for such a shift, and manage the transformation

process more effectively. In addition, by examining the entire retail industry and not limiting

ourselves to one industry sector, we are providing a generalizable and comprehensive

overview of the retail industry as a whole.

Boundaries of the thesis We limit our research by exclusively examining the retail industry. In our thesis we define the

retail industry as the market for the sale of goods or services to consumers rather than

producers or intermediaries (Retail market, n.d.). A retailer is seen as the active intermediary

between primary producers and manufacturers on the one hand, and consumers on the other

(Jones, Hillier & Comfort, 2013). In addition, we are primarily looking into strategic and

organizational aspects by using business models as a tool. We therefore do not analyze the

economic effects of such changes in-depth. We assume that certain organizational changes,

for example the implementation of a responsible business practice, has an effect on the cost

structure. Further, we assume that a responsible business model practice will be profitable in

the long-run. Our understanding follows prior research: Investing in corporate social

responsibility and sustainability can result in increased brand equity, stronger loyalty among

the customer group, and a favorable brand image among external stakeholders (Cooke &

Qiaoling, 2010; Saeidi et al., 2015).

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2. Responsible Business Practices The terms corporate social responsibility and sustainability are often misleadingly used in

extant strategy and management literature. In the following, we will first review these different

terms and proffer our own definition of responsible business practices. Next, we will discuss

the drivers and barriers for responsible business practices in the retail industry.

2.1 Defining Corporate Social Responsibility, Sustainability and Responsible Business Practices 2.1.1 Defining Corporate Social Responsibility Reviewing the literature, we found that there is not one commonly accepted definition of

corporate social responsibility (CSR). Definitions of CSR tend to be divided between an

instrumental and an altruistic view. The instrumental view defines CSR by its costs and impact

on firm financial performance (Jones Christensen, Mackey & Whetten, 2014). Friedman

(1970), for example, argues that the social responsibility of businesses is to maximize profits

while conforming to the basic rules of the society. An altruistic view, on the other hand, defines

CSR as “caring for the well-being of others and the environment, with the purpose of also

creating value for the business” (Glavas & Kelley, 2014, p. 171).

Similarly, Jørgensen and Pedersen (2013) state that social responsibility is about

integrating social and environmental goals in a business’ strategy and activities. CSR will

therefore have implications for strategy, management, product and service design, marketing,

communication and organizational designs. Along similar lines, UNIDO (n.d.) argues that

CSR is a management concept whereby companies integrate social and environmental

concerns in their business operations and interactions with their stakeholders. The importance

of a triple-bottom-line-approach is mentioned in relation to their definition of CSR. That is,

the importance of achieving a balance of economic, environmental and social imperatives,

while at the same time addressing the expectations of shareholders and stakeholders.

Consequently, an important element in CSR is the role of stakeholders. According to

Carroll and Buchholtz (2008), the role of stakeholders in discussions of CSR is inseparable,

as the stakeholder concept has become a key to understand business and society relationships.

A stakeholder may be defined as any individual or group who can affect or is affected by the

actions, decision, policies, practices, or goals of an organization (Freeman, 1984, referred in

Carroll & Buchholtz, 2008). Da Silva and Teixeira (2008), argue that companies operate

within a framework where they are faced with a variety of stakeholders, and that these

stakeholders often have conflicting interests in the running of the organization. Hence,

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companies need to balance the requirements of all these stakeholders (Doyle, 1998, referred

in Da Silva & Teixeira, 2008).

Dimensions of CSR From the reviewed definitions, it appears that there are various perspectives to what CSR is

and what should be included in CSR activities. A company can be responsible along many

dimensions, and many have chosen specific areas in which they want to take more

responsibility than others (Hauge & Straumann, 2014). For example, Dahlsrud (2008, referred

in Smith, 2012) has grouped CSR along five dimensions: Environment, society, economy,

stakeholders and voluntariness. According to Carroll & Buchholtz (2008), businesses’

responsibilities are divided between four types: Economic responsibilities, legal

responsibilities, ethical responsibilities and philanthropic responsibilities. Table 1 contrasts

the two perspectives on CSR dimensions.

Carroll &Buchholtz (2008, p. 44) Dahlsrud (referred in Smith, 2012, p. 21) Economic Be profitable. Maximize sales, minimize

costs. Make sound strategic decisions. Be attentive to dividend policy. Provide investors with adequate and attractive returns on their investments.

Economy Contribute to economic development. Means for profit. Financial conditions.

Legal Obey all laws, adhere to all regulations: environmental and consumer laws; laws protecting employees. Comply with Sarbanes-Oxley Act. Fulfil all contractual obligations. Honor warrants and guarantees.

Environment A cleaner environment. Environmentally stewardship. Environmentally focus in companies’ actions.

Ethical Avoid questionable practices. Assume law is floor on behaviour, operate above minimum required. Respond to spirit as well as letter of law. Do what is right, fair and just. Assert ethical leadership.

Stakeholder Cooperate with stakeholders. How companies cooperate with their employees, suppliers, customers and local community. Identification and focus on the company’s stakeholders.

Philanthropic Be a good corporate citizen. Give back. Make corporate contributions. Provide programs supporting community betterment. Engage in volunteerism.

Voluntariness Based on ethical values. Beyond legal obligations. Voluntary responsibility.

Society Contribute to a better society. Integrate social practices in companies’ actions.

Table 1: Dimensions of CSR

As this brief review illustrates, many of the definitions share common features related to

ethics, morality and norms. Consequently, we define CSR as the intention and approach of

15

integrating social, ethical and environmental considerations in organizations’ strategies and

activities.

2.1.2 Defining Sustainability One confusing issue may be the distinction between CSR and sustainability, as these are broad

concepts that might include several types of responsibilities, activities or goals. Table 2

contrasts some selected definitions of CSR and sustainability.

Corporate Social Responsibility Sustainability Friedman (1970)

Maximize profits while conforming with the basic rules of the society.

The World Commission on Environment and Development (1987, p. 43)

Sustainable development seeks to meet the need and aspirations of the present without compromising the ability to meet those of the future.

Unido (n.d.) CSR is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.

Bansal & DesJardine (2015)

Sustainability balances resource usage and supplies over time. Sustainability assures intergenerational equity.

Glavas & Kelley (2014, p. 171)

Caring for the well-being of others and the environment with the purpose of also creating value for the business.

Seay (2015, p. 46) For many in the corporate world, its meaning has moved beyond a single-minded focus on environmental responsibilities to include a business’s social and economic impact.

Jørgensen & Pedersen (2013)

Social responsibility is about integrating social and environmental goals in a business’ strategy and activities.

United Nations Global Compact (2015, p. 9)

Corporate sustainability is a company’s delivery of long-term value in financial, environmental, social and ethical terms.

Table 2: Overview - Some selected definitions of CSR and sustainability

As table 2 illustrates, some may see a clear distinction between CSR and sustainability, while

others might use the terms interchangeably. Hence, the term sustainability is defined in many

different ways (Hoffman and Bazerman 2007, referred in Sheth, Sethia & Srinivas, 2011), and

has often focused on environmental concerns (Sheth et al., 2011). The World Commission on

Environment and Development (1987, p. 43) state that: “Sustainable development seeks to

meet the needs and aspirations of the present without compromising the ability to meet those

of the future”. Similarly, Bansal and DesJardine (2015), argue that sustainability balances

resource usage and supplies over time, while ensuring intergenerational equity. “When the

resources we actually use match the earth’s capacity to regenerate adequate future supply, then

our systems remain balanced indefinitely” (Bansal & DesJardine, 2015, p. 2).

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Consequently, Bansal and DesJardine (2015), argue for a clear division between CSR

and sustainability, and explain that the common approach to CSR is grounded in ethics,

morality and norms. Many companies borrow resources and capital from the future, in order

to balance demands made by shareholders and stakeholders. This magnifies the imbalance in

the distribution of resources between the short and the long-term. Hence, CSR measures do

not always acknowledge the long-term impacts and might therefore be unsustainable (Bansal

& DesJardine, 2015).

While some might consider a clear division between CSR and sustainability, others

might interpret CSR to be an integrated part of sustainability goals. Seay (2015) argues that

the meaning of sustainability has moved beyond a single-minded focus on environmental

responsibilities to include a business’ social and economic impact. Along similar lines, United

Nations Global Compact (2015), states that corporate sustainability is a company’s delivery

of long-term value in financial, environmental, social and ethical terms. In line with extant

literature, we define sustainability as the approach of integrating long-term environmental,

social and ethical concerns in a company’s activities, strategies and goals.

2.1.3 Defining Responsible Business Practices As this brief literature review illustrates, there are various definitions of CSR and

sustainability. This implies that the concepts remain broad, and with various interpretations.

Some scholars use CSR and sustainability interchangeably, while others distinguish these two

concepts, which might lead to confusion. Based on the reviewed literature, it can appear that

CSR is more directed towards societal concerns, while sustainability is more directed towards

environmental concerns. Consequently, we find the need to provide a definition that can serve

as a common term for CSR and sustainability. Both concepts should be integrated into

businesses in order for companies to take responsibility for their actions and the impact they

have on society and the environment. Hence, our objective throughout this thesis is to use the

term responsible business practices as a common term for CSR and sustainability. We define

responsible business practices as:

The approach of integrating long-term social and environmental considerations into a

company’s business model.

In our definition of responsible business practices, there are two dimensions: Environment and

society. Environmental considerations are in particular related to sustainability, and involve

17

activities aiming at reducing negative impacts on the environment. Waste reduction and

efficient use of resources and energy, are examples of responsible business practices in this

dimension. The social dimension involves actions that benefit the society and the well-being

of others. Examples are involvement in local communities, donations, proper working

conditions, protection of human rights through responsible supply chain management, and

inclusive employment.

We will use the term responsible business practices throughout the thesis, unless we

are referring to other studies which have used the terms CSR or sustainability. In the following,

we will present the main drivers and barriers for responsible business practices in the retail

industry.

2.2 The Need for Responsible Business Practices in the Retail Industry The need to adopt responsible business practices has become a prominent issue for retailers

(Claro, Laban Neto & de Oliveira Claro, 2013). Material use, energy consumption and

environmental impact are examples of major discussion topics in the retail industry. The

European Commission (2012), for example, points out the dilemma retailers face between

reducing waste and limiting environmental impact on the one hand, and meeting society’s

demand on the other. The need for a more circular economy is strongly emphasized by the

European Commission (2015), and involves reusing, repairing, refurbishing and recycling

existing materials and products. For example, environmental new product development is

becoming important, and is defined as product development into which environmental issues

are explicitly integrated in order to create the least environmentally harmful product (Pujari,

Wright & Peattie, 2003).

Furthermore, retailers are experiencing considerable pressure from consumers to act

responsibly. Many consumers have become aware of their consumption patterns and their

impact on society and nature (Pusaksrikit, Pongsakornrungsilp, S. & Pongsakornrungsilp, P.,

2013). This is often referred to as mindful consumption, and is premised on consciousness in

thought and behavior about consequences of consumption (Sheth et al., 2011).

The term social entrepreneurship is used to refer to the growing number of

organizations that have a mission to change society, and because it contributes directly to solve

environmental or societal issues, it may encourage established companies to take on greater

social responsibility (Seelos & Mair, 2005). According to Cusumano (2015), traditional

companies are threatened by startups on the sharing economy, also referred to as collaborative

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consumption. These startups “bring together individuals who have underutilized assets with

people who would like to rent those assets short-term” (Cusumano, 2015, p. 32). Cooke (2013)

explains how collaborative consumption helps the environment by squeezing the most out of

resources.

The fashion industry is an example of a retail sector, which has become a focal point

for debates on the social responsibility of businesses, caused by the complex buyer-driven

global production networks, and labor-intensive manufacturing process (Perry, Wood &

Fernie, 2015). Companies tend to focus on short-term gains caused by strong competition and

increasing pressure on price and quality (Lai, 2006, referred in Cooke & Qiaoling, 2010), and

the business model is typically based on a short-term relationship between buyers and

suppliers (Cooke & Qiaoling, 2010).

Gereffi (1999, referred in Perry et al., 2015) argues that the trend towards vertical

integration of retailers’ supply chain increases the degree of global dispersal. This becomes

even more prominent in light of recent events involving negligent and hazardous working

practices in developing countries, which has increased the awareness of CSR issues

worldwide. The Economist (2013, referred in Perry et al., 2015), for example, pointed out the

consequences of overlooking CSR and supply chain management after the collapse of the Rana

Plaza garment manufacturing facility, which supplied a number of leading international

retailers.

In sum, two main motivations are necessitating retailers to act responsibly. From a

normative perspective, retailers need to act morally (Hauge & Straumann, 2014). From a

strategic perspective, investing in responsible business practices can lead to competitive

advantages by enhancing reputation, improving customer satisfaction and reducing operating

costs (Cooke & Qiaoling, 2010; Saeidi et al., 2015). However, despite the importance of acting

responsibly, few companies have implemented responsible business practices fully into their

business models. For example, as Bisgaard, Henriksen and Bjerre (2012) state, few companies

have focused their green business model on both the input and output side. Gjerdrum Pedersen

and Gardetti (2015) argue that the fashion industry hardly can be said to meet any definitions

of sustainable development. To understand the low adoption of responsible business practices

in the retail industry, we will review the most important barriers that impede the adoption of

responsible business practices in the next Section.

19

2.2.1 Drivers and Barriers for Responsible Business Practices in the Retail Industry Stakeholder-Related Drivers and Barriers Companies are currently experiencing pressure from customers, society, markets and

regulatory forces to act responsibly. Retailers are increasingly expected to mitigate

environmental damage and to embrace eco-friendly practices in order to improve their value

chain (Lai, Cheng & Tang, 2010). According to PwC (2015), sustainability issues are higher

on consumers’ agenda than ever before. Consumers are demanding retailers to keep pace with

their changing expectations regarding sustainability issues, and want retailers to help them

make more sustainable purchasing choices (IPSOS, n.d.). Mindful consumers are exerting

greater influence and driving retailers to raise their environmental standard and quality (Lai et

al., 2010).

Green products are often costlier to produce, and considering that consumers tend to

be sensitive to changes in price, this is a central barrier (Danish EPA, n.d.-a). The European

Commission (2013), for example, points out how socially and environmentally friendlier

textiles might result in more expensive finished products. An additional issue pointed out, is

the challenge of turning sustainable garments into products that are stylish and fashionable, as

some consumers consider the appearance of eco-clothing to be unattractive. Furthermore,

Chernev and Blair (2015) explain how CSR often is viewed solely as a tool for enhancing

company reputations and goodwill among customers. Hence, there might be a lack of

credibility among consumers if they believe that companies’ CSR-efforts simply are strategic

marketing tools.

Other external drivers can be pressure from competitors or non-governmental

organizations (Danish EPA, n.d.-b). In addition, external regulation by governmental bodies

can be efficient in creating a level playing field for all retailers (Danish EPA, n.d.-b).

Increasing environmental regulations exert greater pressure on retailers to emphasize

environmental considerations into their operations (Lai et al., 2010). However, cost of

regulatory compliance, too few or strict regulations, and lack of environmental tax reforms are

some of the barriers that exist in this category (Danish EPA, n.d.-a).

Strategic Drivers and Barriers Lai et al. (2010) argue that the benefits of eco-friendly retailing can be attractive to retailers

that are seeking improvements related to costs and services. Along similar lines, Cruz (2013)

state that companies may avoid the costs of future lawsuits, negative media coverage,

unreliable business relationships and financial mismanagement by investing in CSR.           

20

Sustainability is often seen as a source of innovation, and can help retailers enter new markets,

mitigate risk, and enhance retailers’ brands (RILA, 2015a). Critical issues related to the

environment can promote innovative thinking, for example by strategically changing the way

resources and materials are used. The European Commission (2012) points out that recycling

waste is one way to recover valuable resources, while at the same time reducing the waste’s

environmental impact.

Danish EPA (n.d.-a) points out that some of the strategic barriers are disadvantages

related to being a first mover, and lack of general knowledge about environmental issues.

Additionally, lack of sufficient performance indicators in order to monitor, control and reward

good environmental performance, are factors that can impede the implementation of

responsible practices.

Financial Drivers and Barriers With the increasing ethical awareness among consumers, there seems to be a demand for

greener products. An important financial driver is therefore the possibility to increase sales by

offering eco-friendly products (BIO Intelligence Service, 2009, referred in Danish EPA, n.d.-

b). If retailers can also manage to increase their resource efficiency, this can increase profit

margins and reduce potential costs (Danish EPA, n.d.-b).

However, Bocken et al. (2014) argue that it is not always clear how delivering social

and environmental value might translate into profit for a firm. Lack of resources and high costs

of action to reduce environmental impacts are some of the major financial barriers (Danish

EPA, n.d.-a). The European Commission (2009) expresses that there are insufficient

incentives or rewards for companies investing in energy efficiency or greener technologies.

Organizational Drivers and Barriers Own organizational values, and awareness of the importance of responsibility among

employees or managers, can work as a driver for implementing social or environmental

concerns in the business (Danish EPA, n.d.-b). However, a prominent barrier can be the lack

of commitment from the top management (Danish EPA, n.d.-a; Schaltegger, Lüdeke-Freund

& Hansen, 2011).

In a study of how managers of textile and apparel firms perceived CSR, it was found

that many of the companies did not have a written CSR policy or obtained CSR standards.

(Cooke & Qiaoling, 2010). Simionescu (2015) state that the wider meaning of the CSR

definition can make it difficult for companies to establish a clear policy on what should be

21

included in their CSR activities. In addition, CSR goals tend to be wide-ranging, and retailers

are aware that it is challenging to reconcile them (Jones et al., 2007).

Further, the retail industry is often characterized by a value chain with several actors.

Hence, a major issue is related to the supply chain, as it is challenging to control the entire

chain (Danish EPA, n.d.-b). It is for example common for retailers to outsource their

production to low cost countries in order to save costs. The European Commission (2013)

points out that complex and global value chains, often with low traceability, represents an

obstacle for producers who want to improve their supply chain.

Table 3 summarizes the most important barriers to responsible business practices in the retail

industry. Lack of sufficient performance and financial indicators in order to monitor, control

and reward responsible business practices, lack of managerial support, and lack of

organizational resources are found to be among the most prominent obstacles. Furthermore,

managers seem to lack the required know-how and strategies on how to implement responsible

business practices into their company’s business model. Hence, a comprehensive

understanding of how responsible business practices can be integrated into a company’s

business model is essential to retailers. We believe it is crucial for retailers to implement such

practices, considering the impact they have on environment and society. In the following, we

will present state-of-the-art literature on the emerging field of business models, and propose

how companies can use business models as a tool to implement responsible business practices

into their organization.

Stakeholder-related Strategic Financial Organizational Consumers are sensitive to changes in price. Challenging to make green products attractive. Lack of incentives and facilitation from regulatory bodies.

Disadvantage of being a first mover. Lack of general knowledge. Lack of performance indicators.

Unclear how delivering social and environmental value can translate into profit. High costs. Lack of resources.

Lack of commitment from top management. Lack of written CSR policies and standards. Challenging to control retailers’ value chains.

Table 3: Barriers to responsible business practices in the retail industry

22

3. Responsible Business Models: A Conceptual Framework The purpose of this Chapter is to derive a definition and framework of responsible business

models. To this end, we will first review the concept of business models in general, and outline

its different elements. Based on a review of sustainable business models, and building on our

definition of responsible business practices derived in Chapter 2, we propose a

conceptualization of responsible business models and innovative measures in such a business

model.

3.1 Deriving a Business Model Definition and Framework No single definition of business models as a concept exists as of today (Santos, Spector & Van

der Heyden, 2009; Zott, Amit & Massa, 2011; Saebi & Foss, 2015). Ghaziani and Vantresca

(2005), for example, identified 11 separate constructs on the term business model. To date, the

number of definitions has multiplied. Table 4 illustrates some selected definitions.

Authors Definition of business model Components

Magretta (2002, p. 4)

The Business model tells a logical story explaining who your customers are, what they value, and how you will make money in providing them value.

Customer definition; Value to customer; Revenue logic; Economic logic.

Shafer, Smith & Linder (2005, p. 202)

We define a business model as a representation of a firm’s underlying core logic and strategic choices for creating and capturing value within a value network.

Strategic choices; Create value; Capture value; Value network.

Chesbrough (2007, p. 12)

The business model performs two important functions: value creation and value capture. First, it defines a series of activities (…), which will yield a new product or service in such a way that there is new value created throughout the various activities. Second, a business model captures value from a portion of those activities for the firm developing and operating it.

Value proposition; Target market; Value chain; Revenue mechanism; Value network or ecosystem; Competitive strategy.

Osterwalder & Pigneur (2010, p. 14)

A business model describes the rationale of how an organization creates, delivers and captures value.

Value Propositions; Customer Relationships; Customer Segments; Channels; Key Activities; Key Resources; Key Partners; Cost Structure; Revenue Stream.

Frankenberger et al. (2013, p. 5)

We employ a conceptualization that consists of four central dimensions: the Who, the What, the How, and the Why.

The Who; The What; The How; The Why.

Table 4: Definitions and components of the most commonly used business

models.

23

As shown in Table 4, there are several ways of defining a business model. For example,

some define business models as the way in which a company creates and captures value,

while others also include how value is delivered. Business models may also be perceived as

a set of strategic choices. In general, business models differ according to the way in which

they deliver value. Many companies can have identical products, services, and offerings, and

can aim for the same market segment or no one in specific. However, companies do this with

different business models (Santos et al., 2009). Despite the differences in definitions, we find

that the common essence of a business model is the way in which an organization creates,

delivers and captures value.

As Table 4 illustrates, the different components of what constitutes a business model

vary in level of detail and number of components. We find that the most commonly used

components are (1) the firm’s value proposition, (2) the target market the company addresses,

(3) value creation or network for value delivery, and (4) value capture mechanisms. Based on

this, and our own understanding of the business model concept, we propose the following four

main pillars of a business model: The

Value Proposition, The Customer, The

Value Delivery and The Value Capture. In

addition, we divide the business model

into two dimensions (1) the front end

which is directed towards customers and

the market, and (2) the back end

concerning production processes and

supply chain. Our definition of the

business model is featured in Figure 2, and

the four pillars illustrate how a company

creates, captures and delivers value.

The Value Proposition The Value Proposition identifies what job

the company must do for its customers in

order to create value (Christensen, Johnson & Rigby, 2002; Johnson, 2010). Hence,

this pillar describes what value the company proposes to its customers or the market.

Figure 2: The Business Model

and its four pillars

24

The Customer The Customer is a pillar which describes the different groups of people a company aims to

reach and serve (Osterwalder & Pigneur, 2010). A company should put effort in

communicating with its customers, for example by establishing customer channels. Customer

channels describe how a company reaches its customers to deliver a value proposition

(Osterwalder & Pigneur, 2010).

The Value Delivery The Value Delivery describes the ways in which the company is able to deliver the value

proposition. To deliver value the company has to manage various processes and activities, and

arrange these across the value chain (Johnson, Christensen & Kagermann, 2008). How a

company delivers value depends on how production patterns and processes are developed, and

which key resources and key activities that are required. The STOF model describes how a

network of companies can collaborate in order to create value (Bowman, Faber, Fielt, Haaker

& Reuver, 2008). Hence, engaging in partnerships can be valuable, for example with

contractors, distributors, and manufacturers of other brands.

The Value Capture The Value Capture describes why the company is financially viable (Frankenberger et al.,

2013), and therefore describes the cost structure and revenue stream (Osterwalder & Pigneur,

2010). The cost structure is mostly driven by resources required in order to run the business,

and the revenue stream will typically depend on the pricing model the company has chosen.

3.2 Defining Responsible Business Models Building on the definition and conceptualization of business models provided above, we

intend to delineate how responsible business practices can be integrated into retailers’ business

models. To this end, we review literature on sustainable business models. We will use the term

responsible business models throughout our thesis, unless we are referring to other studies that

use business models in the context of sustainability. There are multiple definitions of

sustainable and responsible business models, as shown in Table 5. Author Term Definition Stubbs & Cocklin (2008, p. 103)

Sustainable Business Model

A “sustainability” business model – a model where sustainability concepts shape the driving force of the firm and its decision making.

Garvare & Isaksson (2001, p. 12)

Sustainable Business Model

The management process should lead to social and economic transformations that optimize production as well as distribution of the outcome, without jeopardizing the potential for similar benefits in the future.

Keijzers (2002, p. 350)

Sustainable Enterprise

The modern sustainable enterprise will need to engage in new forms of governance involving stakeholders in deliberations and negotiations on

25

ecological improvements, relative to and balanced against economic and social concerns within and outside of the firm.

Schaltegger et al. (2011, p. 23)

Sustainable Business Model

A business model for sustainability can be defined as supporting voluntary, or mainly voluntary, activities which solve or moderate social and/or environmental problems. By doing so it creates positive effects which can be measured or at least argued for.

Jørgensen & Pedersen (2013, p. 127)

Responsible Business Model

Responsible business models are organizational designs for creating, delivering and capturing value, where the business’ reductions of negative externalities and/or promotion of positive externalities is an integrated part of how value is created, delivered and captured.

Table 5: Selected definitions of responsible business models

As Table 5 illustrates, there are several ways of defining a sustainable or responsible business

model. Some scholars perceive it as a model where sustainability drives decision making,

while others argue that the sustainability concept is driven by voluntary efforts. Jørgensen and

Pedersen (2013) explain how responsible business models are organizational designs where

the reduction of negative externalities and/or positive externalities is an integrated part of how

value is created, delivered and captured. This definition is in line with our understanding of

what constitutes a responsible business model, as we have defined responsible business

practices as the approach of integrating long-term environmental and societal considerations

into a company’s business model (cf. Chapter 2). Hence, we define responsible business

models as:

Responsible business models are organizational designs where societal and

environmental considerations are integrated parts of how value is created, delivered

and captured.

Consequently, responsible business models are organizational designs where the use of

responsible business practices needs to be integrated in the four pillars of the business model.

We explain how responsibility can be integrated into each of the four business model pillars

below. However, considering the various barriers for responsible business practices in the

retail industry (see Chapter 2), such integration can be challenging in practice. Essentially, a

company should strive to be responsible and profitable at the same time (Jørgensen &

Pedersen, 2013). Thus, we perceive responsible business models as models where responsible

business practices have an effect on each pillar, but are not necessarily fully integrated in each

pillar. The model is illustrated in Figure 3.

26

The Responsible Value Proposition The Responsible Value Proposition is

not solely about proposing value to the

customer, but to   the society or the

environment as well. This can be done

by making the product eco-friendly,

decomposable or reusable, or changing

the production so it follows ethical

guidelines. Several companies

experience that customers are willing to

pay above market price for

environmentally responsible products

(Henriksen, Bjerre, Bisgaard, Almasi &

Damgaard, 2012).

The Responsible Customer Henriksen et al. (2012) argue that

approaches to a greener business model can lead to an improved brand, create market potential,

and reach new market segments. Many consumers have become aware of their consumption

patterns and their impact on society and environment (Pusaksrikit et al., 2013). On the other

hand, green products tend to be more expensive than the previous version (Henriksen et al.,

2012), which may lead customers to choose other options (Zeithaml, 1988).

The Responsible Value Delivery The way in which a company delivers value can change substantially when the company

places resources on responsible business practices. Furthermore, a responsible company will

integrate environmental and societal considerations when selecting production supplies, and

manage their value chain and production platforms in a responsible way. The implementation

of a responsible business model entails that companies incorporate recycling, material reuse

or renewable energy in their daily routines. The use of partnerships in the value delivery can

generate increased positive financial, innovative, and sustainable results for the company

(Henriksen et al., 2012).

The Responsible Value Capture A responsible business model can lead to cost reductions, considering the rising prices of the

world’s resource supply (Henriksen et al., 2012). This implicates that resource efficiency has

impact on long-term cost reductions. Additionally, investing in responsible business practices

Figure 3: The Responsible Business

Model and its four pillars  

27

can lead to competitive advantage, by enhancing reputation and improving customer

satisfaction (Cooke & Qiaoling, 2010; Saeidi et al., 2015). Responsible activities can also be

strong drivers for innovation, which can lead to higher revenue (Chesbrough, 2010). However,

Bocken et al. (2014) argue that it is not always clear how delivering social and environmental

value might translate into profit for a firm.

3.2.1 Types of Responsible Business Models in Extant Literature Based on the different possible configurations of these business models pillars, companies can

design different types of business models that differ with regard to the extent and way in which

responsible business practices are incorporated into the business model. For example,

company A might follow a different path to responsibility than company B.

Reviewed literature provides a limited insight into the different types of responsible

business models. According to Lambert (2015), the business model literature lacks a

systematic approach to the development of business model classifications. Based on a

systematic literature review, we identified 42 academic articles on the topics of business

models and sustainability (see Appendix 1: Literature Review). Of these, only Bocken et al.

(2014) offer a typology of responsible business models. In their study, Bocken et al. (2014)

identify eight archetypes of sustainable business models, as illustrated in Table 6.

Sustainable Business Model Archetypes Maximize material

and energy

efficiency

Create value from waste

Substitute with

renewables and natural processes

Deliver functionality rather than ownership

Adopt a stewardship

role

Encourage efficiency

Repurpose for society/

environment

Develop scale up solutions

Table 6: Bocken et al.’s (2014) archetypes of sustainable business models.

Nevertheless, these archetypes are general presentations of sustainable business models, and

might therefore not be applicable on a detailed level for a specific industry. In particular, it is

not clear to what extent these archetypes are relevant in the retail industry. One of the studies

that we reviewed paid particular attention to business models in the retail industry: Sorescu et

al. (2011) conceptualize the Retail Business Model. However, this model does not integrate

responsible business practices into its framework. Instead, it focuses on integrating customer

centricity in the front end of a business model, whereas our understanding is that a retailer’s

business model should focus on both the front and the back end.

Furthermore, the majority of reviewed studies use business models as a framework for

conducting single-case studies, and hereby delivering in-depth analysis of one particular

company. Typically, this stream addresses the emergence of responsible business practices in

28

a particular setting, such as in second hand retailing (e.g., Hvass, 2015), and how various green

initiatives affect the pillars of a business model (e.g., Morgan, 2015; Joule, 2011). Another

stream is looking at a specific sector, for example hotels (e.g., Mihalič, Žabkar & Cvelbar,

2012), the public sector (e.g., Osborne et al., 2014), pharmaceutical biotechnology (e.g.,

Carbone, 2003), e-retail (e.g., Niraj & Nageswara, 2015; Edvardsson & Enquist, 2011), food

manufacturing (e.g., Hemphill, 2013), and banking (e.g., Stubbs & Cocklin, 2008).

From this brief review, we were not able to locate responsible business model

archetypes that are specifically directed towards the retail industry. Hence, in the remainder

of this thesis we intend to examine the holistic concept of responsible business practices in the

retail industry, considering not only green approaches, but also societal challenges.

Consequently, we try not to neglect the bigger picture of sustainability (Blaga, 2013).

3.3 Responsibility as Business Model Innovation Adopting responsible business practices as part of the company’s overall strategy may require

a fundamental shift in the underlying business model (e.g., Stubbs & Cocklin, 2008; Jørgensen

& Pedersen, 2013, Bocken et al., 2014; Blaga, 2013). Hereby, this process can lead to the

emergence of a new and innovative business model. Business model innovation is often

assumed to be a critical capability for the business to become sustainable (e.g., Schaltegger,

Lüdeke-Freund & Hansen, 2012).

There are various definitions of what constitutes a sustainable or responsible

innovation. Boons et al. (2013), for example, argue that sustainable innovation is innovation

that improves sustainability performance. According to Blaga (2013), sustainable business

model innovation involves that companies must rethink their activities, redesign their

processes, use new materials, and introduce efficient managerial systems with the purpose of

creating a sustainable organization. Jørgensen and Pedersen (2013) explain that responsible

business model innovation are changes in the way value is created, delivered and captured, in

particular, changes with the objective to reduce negative externalities or increase positive

externalities. Hence, a common component in literature is that sustainable innovation involves

changes in organizational designs that improves sustainability performance. In line with this,

and our definition of a responsible business model, we define responsible business model

innovation as follows:

29

Responsible business model innovation are changes in the creation, delivery and

capturing of value that can lead to novel ways of implementing environmental and

societal considerations.

Consequently, a responsible business model is conceptualized as a model that changes the way

value is created, delivered or captured, in order to improve or implement responsible business

practices.

The business model innovation process has been investigated by several scholars (e.g.,

Amit & Zott, 2012; Chesbrough, 2007; Johnson, 2010). By reviewing the literature, we also

found that sustainable business model innovation is an emerging research field. Scholars

address the emergence of sustainable business model innovation from different perspectives.

One stream is typically focusing on new solutions for enterprises, that is, developing new

business model ideas with a focus on sustainability (e.g., Girotra & Netessine, 2013; Eppler,

et al., 2011). Another stream investigates the triggers for sustainable business model

innovation (e.g., Hansen, Lüdeke-Freund, Quan & West, 2013). A third stream, investigates

the common barriers and threats enterprises must overcome during a change for sustainability

(e.g., Laukkanen & Patala, 2014; Pedersen & Andersen, 2015).

However, as Heyes (2014) confirms, the literature lacks a common understanding of

business model innovation for sustainability. Along similar lines, Frankenberger et al. (2013)

explain how scholars have particularly focused on the need for business model innovation, but

have not explained how the innovation should be carried out in practice. In the following, we

therefore propose how a responsible business model innovation can evolve in practice.

3.3.1 Shifting Towards Responsible Business Models - A Process View In our thesis, we follow the logic of a five-stage model presenting the business model

innovation process (cf. Moe, Singh & Saebi, 2015). Following systematic stages can lead to a

more controlled transformation process, and increase the possibility for long-term success. In

general, literature on business model innovation focuses on three or four stages (e.g.,

Chesbrough 2010; Frankenberger et al., 2013). However, in line with Moe et al (2015), we

believe that a fifth stage stressing continuous business model innovation is needed to lead to

a responsible business, as responsible business practices for companies and retailers are in

continuous development. The stages are partly modified, and represented in Table 7.

30

Trigger Business Model innovation in practice Mindset

1. 2. 3. 4. 5. Initiation Ideation Integration Implementation Continuous BMI

Why and when?

Reframing beliefs

Circular or systematic approach

Lead critical activities for implementation

Transform ideas into long-term business

plans

Table 7 The 5 Stages of a Business Model Innovation Process

Initiation The first stage concerns the various drivers and motivational factors that initiate the business

model innovation. Lindgardt & Ayers (2014) argue that most business models age quickly,

and must therefore undergo business model innovation. Consequently, an external pressure is

often the factor which triggers the initiation for business model innovation (Johnson, 2010).

Identification of change drivers is central in order for companies to gain an understanding

about the need for change (e.g., Johnson et al., 2008; Moe et al., 2015; Frankenberger et al.,

2013).

Ideation The focus in an ideation process is to generate specific ideas for new business models, and

investigate how opportunities located in the initiation stage can be transformed into tangible

business plans (Frankenberger et al., 2013). Most business models are characterized by strong

values, traditions, cultures and structural designs (Chesbrough, 2010). Hence, the company

must reframe traditional perceptions on market, business and competition when trying to lead

an innovative change (Jong & Dijk, 2015).

Integration During the integration stage businesses choose an integration approach. A systematic

approach will lead practitioners through the process with goals and intermediate goals (e.g.,

Santos et al., 2009). In contrast, a circular approach sets an overall vision, and lets the process

run itself in order to capture the most value along the way (e.g., Reuver, Bouwman & Haaker,

2013; Dmitriev, Simmons, Truong, Palmer & Scheckenberg, 2014).

Implementation In the stage concerning implementation, companies will need to overcome internal resistance

for change, manage the chosen integration approach, and manage the risks connected to such

a process (e.g., Euchner & Ganguly, 2014; Evan & Johnson, 2013; Achtenhagen, Meling &

Naldi, 2013). The framework locates risk analysis, management structure, cultural changes

and organizational changes as important dimensions to successfully transform the business

model (Moe et al., 2015; Frankenberger et al., 2013).

31

Continuous Business Model Innovation A mindset of continuous business model innovation can be of crucial importance to lead an

innovative business model (Chesbrough, 2010; Giesen, Riddleberger, Christner & Bell, 2010;

Mitchell & Coles; 2004; Doz & Kosonen, 2010). Here, companies should place resources into

transforming ideas into long-term business plans.

In the following, we will explore different types of responsible business practices in the retail

industry, and investigate how companies can shift towards more responsible business models,

using the business model innovation framework described above. However, before we do this,

we explain the methodology and research design for the empirical part of the thesis.

4. Methodology In the following, we first explain the purpose of the thesis and why we have chosen a

qualitative approach with an exploratory design. Further, we explain the main steps of the

thesis: Literature review with a focus on identifying gaps, secondary data collection based on

online research, and a multiple-case study with in-depth interviews. Lastly, we evaluate the

research method.

4.1 Purpose of the Thesis and Choice of Methodology The purpose of our thesis is twofold. Firstly, to generate different types of responsible business

models in the retail industry. This has been done by examining and categorizing relevant and

emerging industry practices. Secondly, to investigate how companies can shift towards more

responsible business models. By using a step-by-step framework for business model

innovation, we will explain how retailers can shift their business models. The reason for why

we first generate types of responsible business models, is to provide practical examples that

can serve as end goals.

In order to research these subjects, we needed a deeper understanding of responsible

business models, business model innovation, and responsible business practices in the retail

industry. Consequently, the choice of methodology was a qualitative approach, which is

suitable because the purpose of qualitative research is to understand and gain insight (Ghauri

& Grønhaug, 2010). Additionally, the nature of our research question implies that a qualitative

approach, opposed to a quantitative, is the suitable choice. What are the types of, and how can

retailers shift, are questions that need discussion and reflection, in opposed to quantified

32

measures. Hence, it was appropriate to lead a qualitative approach with regards to how

responsible business practices are integrated in business models.   

Further, we used an exploratory design. The multidimensional concept of responsible

business practices, and its connection to business model innovation is broad. Additionally, it

is subject to contemporary research in several topics in strategy and management literature.

We chose to investigate how these topics evolve in the retail industry, which is an industry

with an increasing demand for tools and frameworks for responsible business practices. An

exploratory design is flexible and adaptable, but can also generate large amount of information

with a broad focus. However, an exploratory design allowed us to understand the specifics for

the retail industry (Guest, Namey and Mitchell, 2013), particularly how the responsible

practices are integrated in business models. Consequently, our findings can contribute to an

increased understanding of other similar cases and contexts. Our types of responsible business

models in the retail industry, is a specific contribution to an increased general knowledge in

this field.

4.2 The Thesis’ Main Steps The study was conducted by going through

three steps, as illustrated in Figure 4. The first

step involved reviewing the literature, as

seen in Chapter 2 and 3. The second step

explains how we explored the various

responsible business practices that are

relevant and emerging in the retail industry,

in order to generate different types of

responsible business models. This work is

predominantly based on doing online

research and collecting secondary data

from 72 retailers. The third

step is conducting a multiple-case study and

collecting primary data from four in-depth

interviews. These interviews helped us

understand the processes and challenges

retailers encounter, when shifting towards a

responsible business model.

Step 1: Reviewing the Literature Literature Review in chapter 2 and 3.

Identification of literature gaps concerning responsible business models in Section 3.3.

(Chapter 2 and 3)

Step 2: What are the types of responsible business models?

Secondary data collection based on online research to generate types of responsible

business models (Section 5.1.)

Step 3: How can retailers shift towards a more responsible business model?

Multiple-case study with in-depth interviews to identify how retailers can shift towards more

responsible business models (Section 5.2)

Figure 4: The main steps of

the thesis

33

Step 1: Literature Review In order to review existing literature, we searched the EBSCO Business Source Complete

database for academic articles. We needed to find existing literature about business models

and business model innovation in the context of CSR and sustainability, as we are using these

concepts in our thesis. In order to find relevant gaps in existing literature, searches were

conducted in the stages provided in Appendix 1: Literature Review.

Quotations marks were used in order to exclude irrelevant mentioning based on

grammatical coincidence. For example, one of the searches were “sustainable business

models” in title, abstract or keywords (see Appendix 1: Literature Review). The various search

criteria yielded 37 results. To identify relevant articles, the topics of business model,

sustainable business model and business model innovation needed to be dealt with in a

meaningful way. Hence, articles were eliminated if they did not have significant development

of these concepts. Articles that barely mentioned the different terms, but did not further explain

or significantly elaborate the concepts, were also eliminated. The number of articles which

were excluded were 16. The remaining articles, which were 21, were reviewed for theoretical

and empirical contributions. In addition to the searches on EBSCO database, we conducted

same type of searches in the database Science Direct, and found 21 relevant articles. As a

result, our final sample consisted of 42 articles on the topics business model, sustainable

business model and business model innovation.

Through reading these articles, we found that these subjects are emerging research

fields, as most of the studies are conducted during recent years. By contrasting scholarly

articles in a table, we were able to uncover gaps in the literature. One stream has thoroughly

analyzed one firm or an industry, whereas another stream has a broader and conceptual

approach.

Step 2: Generating Types of Responsible Business Models Based on Online Research In order to generate types of responsible business models in the retail industry, we aimed to

collect data from a variety of retailers, which resulted in a sample of n = 72. By analyzing

several retailers, we were able to compare, uncover the most common responsible business

practices, and find emerging trends. On the other hand, by using secondary data we might not

have captured all desired information, for example, in the case of unpublished information that

could have been relevant for our thesis.

To generate types of responsible business models, we found relevant samples for the

study, that is, retailers who are implementing responsible business practices. In addition, we

34

examined the various types of responsible business practices in each sample. We identified

whether the practices had a focus on environmental or societal concerns, and how the practices

affected the pillars of the business model. This was necessary in order to categorize practices,

find common characteristics, and further, to generate types of responsible business models.

According to Lambert (2015), the business model literature lacks a systematic

approach to the development of business model classifications, and so proposes a design of

classification schemes with systematic steps that lead to a classification outcome. Hence, we

attempted to lead such a systematic approach when generating types of responsible business

models, as shown in Table 8.

Phase Action Explanation 1 Searching for relevant samples Example of sources:

Top 10 sustainable retailers, RILA report

2 Further examination of relevant retailers

On retailers’ websites, sustainability pages, and annual reports

3 Categorizing responsible business practices according to focus

Environmental, for example Recycling, and/or Societal, for example Inclusive recruitment

4 Categorizing practices according to responsible business model pillar

According to effects on Value Proposition, The Customer, Value Delivery and Value Creation

5 Identification and categorization of similar practices

Coding the practices with similar notations, for example Recycling

6 Examining general concepts that are repeatedly found in the practices

Develop a general understanding of the common practices. For example, “Recycling” is frequently used and therefore leads to a concept

7 Generating types of responsible business models based on the concepts

The concepts are grouped according to their focus. For example, environmental focus and Recycling leads to the model The Green Enthusiast

Table 8: Phases in generating types of responsible business models

Phase 1 started the search for retailers which had received attention for their responsible

practices. The searches were primarily open, by searching for sources such as Top Sustainable

Retailers, WTO Top 100 Sustainable Companies, and Green Retailing. Such sources led us to

rankings of responsible companies, and several articles and reports concerning innovative

responsible practices. Consequently, this made it possible to select relevant samples for the

study. The retailers identified through such sources, were brought to a more detailed search in

phase 2. We visited retailers’ websites and read annual reports, which helped us identify

retailers’ main responsible business practices. The retailers and their responsible business

practices were listed in individual tables.

In phase 3, the practices were divided according to environmental and societal focus.

The division was based on our own understanding of the practices’ main objective. For

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example, Nike’s work with environmental new product development (ENPD) was understood

to have an environmental objective, whereas Nike’s work concerning equal gender rights was

understood to have a societal objective (see Appendix 2: Example Company: Nike).

Further, in phase 4, the responsible practices were analyzed according to their effect

on the business model pillars: Value Proposition, The Customer, Value Delivery and Value

Capture. To exemplify, Nike’s practice of using ENPD concerns the value proposed to their

customers. However, as ENPD also affects production and the use of resources throughout the

supply chain, ENPD shapes Nike’s value delivery. The use of less resources in new products

can also lead to cost reductions and, consequently, affect the value capture (see Appendix 2:

Example Company: Nike)

When all 72 retailers’ responsible business practices had been analyzed, according to

dimensions and pillars, we further identified and categorized similar practices across the

sample of retailers in phase 5. We coded the practices with similar notations, using notations

such as recycling, resource efficiency and partnerships. Phase 6 involved the examination of

general concepts which were repeatedly found throughout the sample. We developed a general

understanding of the common practices. To exemplify, recycling and partnerships were

frequently found, and therefore led to a concept.

In phase 7, the models were grouped according to responsible business practices.

Seeing that we had 72 companies and the practices were similar, but not identical, we had to

discuss which types of practices that could explain the business models we wanted to move

forward with. For example, we started with several green practices, which lead us to nine

models in total. We therefore started to base the business models on mindsets. The models

were now presented by several responsible business practices and one mindset, or focal point.

For example, several green practices, such as recycling and renewable energy, led to the model

The Green Enthusiast.

In the end, we generated six models. The models are summarized by an overall table,

where we have located practices which fit the different models. The table of summarization

can be found in Appendix 2: Online Research. It presents the total number of retailers analyzed

in the thesis, and is actively used throughout the analysis in Section 5.1. A sufficient number

of retailers was needed for generalization. Hence, we decided that a sample of 72 retailers was

satisfactory, given the limited time frame of the thesis.

36

Step 3: Deriving a Business Model Innovation Framework Based on In-Depth Interviews In-depth interviews were conducted in order to examine how companies can shift towards

more responsible business models. According to Ghauri and Grønhaug (2010), in-depth

interviews are often considered as the best data collection method. An in-depth interview is a

conversation designed to elicit depth on a topic of interest (Guest, Namey & Mitchell, 2013).

It was therefore assumed that relevant information concerning the implementation of

responsible business models was going to be found during the interviews. As interviewees

should be selected for their unique properties (Guest, Namey & Mitchell, 2013), we chose

respondents with considerable insight into our research field. We examined four different

organizations, and consequently led a multiple-case study (Yin, 2003). By examining more

than one case, our findings can seem more compelling to external users, and the overall study

can be regarded as more robust (Herriott & Firestone, 1983, referred in Yin, 2003).

To uncover the challenges and processes related to shifting towards more responsible

business models, we conducted in-depth interviews with the CSR and sustainability managers

in three companies: Stormberg, H&M and IKEA. Information on events or experience can

only be gathered by asking people who have been involved, have observed or have an insight

into a particular event (Ghauri & Grønhaug, 2005). Consequently, by conducting in-depth

interviews with these managers we received primary data from a practical perspective, and a

correct description of how responsible business practices transform a business model. The

three retailers were selected based on the online research, and stood out as relevant samples

for in-depth interviews considering their extensive implementation of responsible business

practices. Moreover, each of these retailers have gained external recognition and attention,

both in the shape of honorary awards and critical perspectives in the media. Our aim was to

examine retailers with different character, in order to contrast and compare. H&M and IKEA

were relevant samples because they are large, international retailers. Stormberg, on the other

hand, is national and smaller in size. Additionally, we conducted an in-depth interview with

the Environment and CSR Responsible at Virke, Camilla Gramstad. Virke is a Norwegian

trade organization, with several retailers as members. The organization has had a clear focus

on environment and CSR during recent years. Hence, Gramstad was able to give us insight

into the different drivers, barriers and trends in the retail industry. Table 9 provides an

overview of the chosen interviewees.

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Interviewee Reason for sample choice Contribution

Stormberg

Stormberg is one of Norway’s most endorsed retailers on corporate responsibility. The retailer has gained several acknowledgements, from media and in the form of awards.

Stormberg contributed with knowledge about triggers and initiation for change.

H&M

H&M is one of the world’s most well-known fashion retailers. Consequently, we could gain understanding on how customer attitudes can change a brand and a retailer’s responsible practices.

H&M was able to contribute with a holistic point of view, as the company has had a holistic approach to the implementation of responsible business practices.

IKEA

IKEA is one of the world’s largest furniture shops, and was interesting to investigate as IKEA is in a different sector than the other chosen retailers. Additionally, the retailer is widely recognized for its extensive work with sustainability.

The retailer has implemented its responsible business model according to its own understanding and business concept, rather than external demands.

Virke Gramstad could provide academic insights and a broader perspective of the retail industry.

Gramstad contributed with insights concerning the need for responsible business practices, current trends, challenges, and the cyclical change for many retailers.

Table 9: Reasons for sample choice

We conducted semi-structured interviews, in order to give the participants the ability to talk

more freely than they could have done in a structured interview, where fixed response

categories are emphasized (Ghauri & Grønhaug, 2005). Fylan (2005) states that semi-

structured interviews are conversations in which the interviewer has a set of questions to ask

and an idea of which topics to be covered. However, the conversation is free to vary, and will

most likely change between interviewees. Hence, the semi-structured approach gave us the

possibility to further examine relevant aspects as they occurred. An interview guide with

predetermined questions was helpful for both the interviewers and the respondents. The guide

consisted of two main parts: Motivation and business model innovation. Motivation concerned

the drivers for implementing responsible business practices. Business Model Innovation

concerned how these activities were led out in practice, with a focus on critical challenges and

capabilities.

Before the initial interview, some practical agreements and understandings were set.

Firstly, we referred to our email explaining the objective and general content of our thesis.

Secondly, recordings, anonymity and securing of the data were explained in detail, and

approved, by all the interviewees. The questions were primarily formulated as open questions,

for example What do you think, Could you exemplify and How does your company. All of the

interviews started with the interviewees explaining their understanding of responsible business

practices, and ended in an open dialogue were the participants could add information if they

38

felt it was needed. Face-to-face interviews were the preferred method. However, as this was

not always possible due to geographical barriers, only two interviews were face-to-face, while

the others were conducted over telephone and Skype. The interviews were recorded by using

a tape recorder. During the interviews both interviewers asked questions, which we had

distributed in advance. We also shared the responsibility of following up interesting leads and

information.

Role in the study

Profession Company Type of Organization

Type of Interview

Length Date

Practitioner CR Responsible Stormberg Retailer In-depth Telephone

30 min September 16, 2015

Practitioner Sustainability Manager

H&M Retailer In-depth Face to Face

70 min September 23, 2015

Academic Environmental and CSR Responsible

Virke Trade organization

In-depth Skype

40 min November 3, 2015

Practitioner Sustainability Manager

IKEA Retailer In-depth Face to Face

90 min November 11, 2015

Table 10: Overview of the interviewees

Our experience from the interviews was that all the interviewees understood the interview’s

objective and that they provided us with honest and valuable answers. We also experienced

that the interviewees were comfortable with the situation and had no objection towards being

interviewed. With the permission to record the interviews we were further able to write

transcripts. The transcripts were sent to the interviewees, which enabled them to review if

terms and concepts had been interpreted and reported correctly. The contributions from the

interviews are used in Section 5.2 of this thesis, and are analyzed and coded according to the

five stages of the framework for business model innovation: (1) Initiation, (2) Ideation, (3)

Integration, (4) Implementation, and (5) Continuous business model innovation. We have

analyzed the contributions based on our own understanding of the interviews and the

framework. The findings from the interviews can be found in Appendix 3: Findings From the

In-depth Interviews.

4.3 Evaluation of the Research Method In the following, the procedures for ensuring the study’s trustworthiness is examined. This is

done by analyzing the validity, generalizability and reliability of the research (Robson, 2002).

39

Validity Valid findings indicate that our presented findings are really what they appear to be about

(Robson, 2002). A valid case study report will have an analysis based on multiple sources,

where the analysis follows a description of themes and assertions (Robson, 2002).

To attain construct validity, more than 70 companies were examined as a basis for the

initial analysis. For the in-depth interviews, more than one person was interviewed: Three

practitioners and one academic expert. Additionally, some of the questions that were asked

during these interviews were identical, which enabled us to obtain relevant information about

current topics from several sources.

To secure descriptive validity, the accuracy and completeness of the data was secured.

The interviews were transcribed and compared to notes taken by one of the interviewers, to

secure further accuracy. Validity of interpretation was further obtained by basing our research

on a tentative responsible business model, where the models were expected to evolve into

several types during the study and findings. We therefore assume that our background

literature did not create a cognitive bias when conducting the research.

We are, however, open to the possibility of a subjective bias present in the different

interviews. Previous to the interviews conducted with IKEA, Virke and H&M, we had learned

more about the interviewees’ roles in the companies, and the companies’ responsible activities.

This made us well prepared for these interviews. During our interview with Stormberg, which

was the first interview, we had less knowledge, and this interview therefore took a more

exploratory form. We also realize that there might be some cognitive bias, considering that we

had some presumptions about our findings in advance. As a consequence, we may have

subconsciously searched for confirmation on these.

Generalizability Generalizability explains to what degree our findings are applicable to other situations

(Robson, 2002). For example, for the retail industry and retailers in general, or for other

industries. Considering the extent of the sample derived from online research, we can conclude

that it is to some degree a generalization for the retail industry. However, our choice of

interviewees may threaten the degree of generalizability, considering that the managers have

similar roles in each of their companies. When studying business model innovation, other roles

in the company should have been taken into account as well. On the other hand, we conducted

an interview with the Norwegian trade organization Virke, to gain overview of the industry as

a whole. This can strengthen the thesis’ generalizability.

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Reliability According to Robson (2002), reliability concerns the consistency or stability of a measure.

To ensure reliability, we have made use of a case study protocol. This is an important route

towards increasing the reliability of case study research, and is intended to guide the

investigator in carrying out the data collection (Yin, 2003; Robson, 2002). We kept a full

record of our activities while carrying out the study, including raw data, research journal,

details on coding and data analysis. Considering that the research is based on two students,

this also increases the sense of objectiveness when analyzing the data, and further strengthens

the thesis’ reliability.

On the other hand, if the research is to be conducted during a different time period, it

might be possible to find a change in trends, for example new emerging types of responsible

business practices. Consequently, it might be possible to generate other types of responsible

business models. These are factors that can weaken the thesis’ reliability.

The following Chapter presents our analysis and findings. In Section 5.1 we use the findings

from the secondary data collection to generate types of responsible business models. In Section

5.2, we use the findings from the multiple-case study in order to identify how retailers can

shift towards more responsible business models.

5. Analysis and Findings In this Chapter, we present our analysis and findings. We first analyze our findings from the

data collection of the 72 retailers. The findings generate six different types of responsible

business models, which provide a comprehensive overview of responsible business practices

that are relevant and emerging in the retail industry. Secondly, we analyze our findings from

the four in-depth interviews and derive a step-by-step framework for business model

innovation. The framework aims to give an overview of how companies can shift towards

more responsible business models, and gives an insight into the challenges and processes

related to the shift.   

5.1 The Emerging Types of Responsible Business Models in the Retail Industry The six types of responsible business models are constructed by categorizing different

responsible business practices. Examples and references are provided in Appendix 2: Online

41

Research. In the following, we explain how the models differ in terms of the extent to which

environmental and societal goals are integrated into the business models. Further, we analyze

how the four pillars of the business model are shaped by responsible business practices. We

have given the models creative names, as we believe this can be a more fun way of engaging

retailers: The Reinventor, the Green Enthusiast, the Teacher, the Team Player, the Supply

Chain Manager, and the Problem Solver. The models are structured according to the four

pillars of the business model: The Value Proposition, The Customer, the Value Delivery, and

the Value Creation (cf. Chapter 3). Figure 5 provides an overview of the generated models.

Figure 5: Overview of the responsible business models

The Reinventor    The Reinventor is generated as a model

because we identified an increasing

number of retailers that are attempting to

keep resources in circulation. We found

that several retailers have a sustainable

approach to the use of materials. The

Reinventor makes old products into new

products. From the companies acting as

Reinventors, we further identified two

groupings. The first group consists of second hand and retro stores. These retailers are

examples of companies that are founded on the idea of reselling products that are possible to

reuse, and are attempting to turn second hand use into a trend among consumers. The second

group consists of large and well-established retailers that are incorporating the idea of reusing

and recycling in their already existing business models.   Hence, the Reinventor is a model with

an environmental focus due to the emphasis on resource scarcity.

Figure 6: The Reinventor

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The Responsible Value Proposition The Reinventor aims to use resources more than once, in order to break the use-and-discard

cycle that characterizes societies today. The objective is to promote the circular economy,

which involves reducing over-consumption, and promoting reuse and recycling. A central

practice is therefore reinventing products made of already used resources, which can lead to

reduced negative impact on the environment. Fretex (n.d.), as a second hand store, actively

promotes mindful consumption by offering second hand products for a reasonable price, and

proposes value by contributing to a better environment through reuse and recycling. Other

larger and international companies have started to adopt the Reinventor later in the company’s

life cycle. H&M, for example, is proposing value with their garment collection program:

Closing the Loop. This is targeted towards mindful consumers by providing fashion for

conscious customers (H&M, n.d -a).   

The Responsible Customer Instead of letting products go to waste, consumers must deliver their old and unwanted clothes

to the Reinventors. As implied by the term, second hand stores do not invest in production of

own products, they resell products which are possible to reuse. Second hand stores are

therefore dependent on consumers contributing to their assortment size. Fretex (n.d.) has

facilitated several collection stations, in order to make it possible for consumers to deliver

their old products. Established retailers focusing on recycling materials into new products, are

equally dependent on customers’ contribution. Marks & Spencer’s (M&S, n.d.-a) Shwopping

program is a system encouraging customers to recycle unwanted clothes. The process is made

available for customers at every M&S-outlet, where customers can deliver old clothes. In

addition, when deliveries are made to customers’ home, customers can give unwanted clothes

to the delivery team (M&S, n.d.-a). Consequently, this makes the process even more

convenient for the customer.

Retailers must motivate their customers to be a part of the recycling process. Some

retailers are encouraging consumers to deliver back old products by offering credit or bonus

points. Lack of motivation among the consumers, may result in a business model that does not

succeed in practice. The retailer must therefore find creative ways of creating incentives for

the customer, for example by using such bonus systems.

The Responsible Value Delivery Systems that aim to make old products into new ones, are often called closed loop recycling

systems. To be able to create value from waste, consumers, recyclers and manufacturers must

collaborate. In order for second hand stores to deliver value, they have developed their key

43

activities with the objective of collecting and reselling second hand products. Key activities

are an overall process for taking in the products, evaluating the items’ value, and reselling

them. As a consequence, the business model contributes in keeping resources in circulation,

instead of letting them go to waste.

H&M launched Closing the Loop as an integrated part of their business model. Value

is delivered by turning old clothes into new garments, and therefore avoids that fashion goes

to waste (H&M, n.d.-b).   In the process of recycling products, where the aim is to turn the

products into new materials or fabrics, there is a need for a good and efficient recycling system.

In order to turn old clothing into new materials, retailers need to have the required technology.

Hence, investments for research and development activities might be necessary. The recovery

of such materials from the recycling process is often also experimented with, in order to

increase the quanta of recycled materials in new products.

The Responsible Value Capture The Reinventor’s revenue stream is clearly shaped according to the required resources for

facilitating this model, by delegating resources for organizational set-ups. These set-ups can

be distribution, facilitation of recycling and collaboration with customers, to mention some

examples. For the Reinventors which also recycle products into new fabrics or materials, large

amounts of resources are delegated to new technologies and research and development

processes. However, the Reinventor may also experience cost-savings due to saved materials.

The Green Enthusiast The Green Enthusiast is generated as a

model because environmental

considerations are to an increased degree

influencing the retail industry. This is

evident due to the considerable amount of

retailers that are implementing green

practices in their business models. From

the companies identified as a Green

Enthusiast, we further generated two

groupings. The first group consists of

green start-ups, which are companies founded on the idea of being green in order to tackle

environmental challenges. The second group consists of well-established companies that are

implementing greener operations later in the company’s life cycle. Many of these companies

Figure 7: The Green

Enthusiast

44

are large, international corporations with a goal to be first movers with innovative practices.

Hence, this is a model with a clear focus on environmental issues, and companies adopting

this model are committed to reduce their environmental footprint.

The Responsible Value Proposition Retailers are proposing value by reassuring use of eco-friendly operations, and thus offering

eco-friendly products. A clear focus on sustainable practices is present, in order to shape a

sustainable future. The Green Depot is an example of a company which can be identified as a

green start-up. They propose green products and materials for mindful consumers. Products

must meet standards for health, durability, performance, life cycle, natural resource

conservation and energy conservation (Green Depot, n.d.). An example of an established

Green Enthusiast is Levi Strauss & Co. They propose that “sustainability is sewn into the

fabric of everything we do – from how our clothing is made to the work we do to protect our

planet” (Levi Strauss & Co, n.d.-a). Levi’s Waste<Less offers products that are made of 20

percent post-consumer waste, specifically recycled plastic bottles, using three to eight recycled

plastic bottles on each pair of jeans (Levi Strauss & Co, n.d.-b).

The Responsible Customer Green Enthusiasts communicate openly with their customers about their green operations and

goals. Such transparent communication strategies are crucial, in order for customers to follow

the retailer’s development on green practices. On H&M’s websites customers can browse the

page Provide conscious fashion to conscious consumers (H&M, n.d.-a), where they can learn

about H&M’s main goals for material use, and examine whether or not the goals are on track.

Additionally,  in order to communicate and follow up on environmental goals, many retailers

are using indexes. Timberland, for example, rates its products on a scale from zero to ten,

using a system created to compare the environmental footprint of the products (Timberland,

n.d.). To encourage consumers to become aware of mindful consumption, companies are also

increasing the number of green products in their assortment. IKEA (2014) is attempting to

expand their assortment of green products, by selling solar panels and LED-lights. In this way,

consumers can make environmentally friendly purchases.   

The Responsible Value Delivery This type of business model delivers value by offering a net positive impact on the

environment. In order to lead a holistic approach, companies are attempting to affect the entire

value chain with their green business practices. Energy efficiency, reducing emissions,

45

resource efficiency, and green innovational processes are important practices in order to

deliver value.

A common practice is recycling and limiting waste. Kesko (2014), for example,

manages to recycle 99 % of its total waste. In addition, the company is constantly improving

its logistic system in order to throw less food. Another prominent practice is environmental

new product development (ENPD). Nike (n.d.) defines Environmentally Preferred Materials

as materials that have significantly lower impact on the environment in one or more categories

of chemistry, energy, water or waste. For example, two billion water bottles are recycled into

new clothing, and 86 % of Nike-branded products contain at least five per cent organic cotton

(Nike, n.d.). These ways of developing new products are contributing in creating the least

environmentally harmful product.

Nespresso (n.d.) attempts to impact suppliers towards a green direction, with the

program The Positive Cup. The program manages sustainability in production countries, and

learns farmers to become more sustainable. For instance, by managing water use, controlling

soil fertility and limiting chemical input in the production. Consequently, Nespresso is

attempting to influence the production side of their value chain, in order to deliver eco-

friendlier products. In addition, focusing on renewable energy is important in order to reduce

retailers’ environmental footprint. Apple is an example of a company that is running all of its

U.S. operations on 100 % renewable energy. Since 2011, Apple has reduced carbon emissions

from its global corporate facilitates, data centers and retail stores by 48 % (RILA, 2015b).     

The Responsible Value Capture The Green Enthusiast allocates large amounts of resources and investments towards new

technologies that can improve their environmental impact even further. Research and

development processes, teams focusing on ENPD, creating value from waste, and investing in

renewable energy, can increase retailers’ costs. Being a Green Enthusiast requires a

considerable amount of resources and investments in sustainable technology.

Most Green Enthusiast are identified as large and well-established brands. Such

companies are able to use a considerable amount of resources in order to build a green

company. These established companies aim to be first movers in this field, in order to create

a long-term competitive advantage. Considering that green practices are resource demanding,

the Green Enthusiast will often perceive these practices as long-term investments rather than

costs. Furthermore, measures taken for improving environmental impact often leads to cost-

46

reductions, as many energy sources and production inputs are increasing in price.

Consequently, such choices can also affect the profit formula.   

The Teacher The Teacher is generated as a model

because a considerable amount of retailers

are focusing on raising awareness and

knowledge about environmental and

societal issues. Retailers are encouraging

stakeholders to become more responsible,

particularly consumers and employees. We

will therefore primarily focus on these two

stakeholder groups in the description of this

model. The Teacher has both an environmental and a societal focus, considering that the model

actively increases knowledge concerning both issues.

The Responsible Value Proposition Retailers are proposing value by encouraging stakeholders to become more responsible, and

are attempting to make more people and the society as a whole aware of the importance of

environmental and societal concerns. This is done by impacting attitudes, mindsets,

purchasing patterns and behavior among stakeholders. Encouragement can happen through

guides on how to become eco-friendlier and take eco-friendly choices. The Teacher actively

attempts to increase its responsible impact by affecting customers’ knowledge. An increased

number of consumers are becoming mindful in their purchasing patterns, and actively seeking

for information that can help them in their quest. Thus, the Teacher proposes creative and

engaging ways of increasing consumers’ knowledge.   

The Responsible Customer Retailers can impact customers’ actions in the pre- and post-consumption stages. However,

changing attitudes, mindsets and behaviors among stakeholders, can be challenging in the

short-run. In order to guide consumers toward mindful consumption it is crucial that the

retailer delivers efficient information, and that the consumer perceives the information

correctly. Providing comprehensive informational guides on retailers’ websites is a central

part of how consumers are encouraged to become more responsible individuals.

Kesko’s (2014) Energy Expert is a service that helps consumers save energy in their

households and provides information about energy efficiency. Some retailers have established

Figure 8: The Teacher

47

blogs that function as a communication channel where important and contemporary issues can

be discussed, and consumers can comment and ask critical questions to the retailers. Opening

such channels can contribute in engaging consumers in environmental and societal debates,

and emphasize the importance of becoming more responsible. This is also an efficient way of

establishing transparency. H&M (n.d.-c) is an example of a retailer that has established a blog

dedicated solely to discuss sustainability and CSR issues: H&M answers.

Walmart (n.d.) directs its customers toward making eco-friendly purchasing choices at

their warehouses. Showing customers which products in their assortment that score best in

their Sustainability Index, encourages customers to make responsible choices. Other ways of

encouraging an eco-friendly lifestyle is by labelling products with informative messages.

These can be short messages that give a simple tip on how to take care of a product in an eco-

friendly matter. In this way, the retailer is attempting to impact what happens in the post-

consumption phase. Levi Strauss & Co’s (n.d.-c) A care tag for the planet, encourages

customers to wash less, wash in cold, line dry, and donate products when no longer needed.

Additionally, REI (2014) has developed the How2Recycle label, which is a standardized

labeling system that communicates instructions for consumers on how to recycle packaging.   

The Responsible Value Delivery In order to deliver on the proposed value, it becomes important that environmental and societal

considerations characterize all sections of a business. Considering that a retailer has direct

contact with the customer, their front personnel is an important communication tool. It is

therefore important to ensure that employees have sufficient knowledge about how and why

the company should implement responsible business practices. Many retailers are using

considerable resources in educating and training employees on environmental and societal

issues.   

Canon (2015) has a strong focus on education and training, and has adopted a two-

pronged approach to environmental education. Awareness training aims to impart basic

environmental knowledge to all employees. Specialized training, aims to develop key

personnel in environmental assurance activities, with specialized knowledge concerning

environmental management. Further, retailers are also adopting practices in order to encourage

everyone in the company to become eco-friendlier individuals. REI (2014), for instance, has

established commute benefits for employees. This initiative can encourage employees to take

eco-friendlier choices by using public transportation.   

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The Responisble Value Capture The Teacher is placing resources in establishing efficient communication channels, or

adopting various ways of sending messages to consumers and employees. However, changing

attitudes and behaviors can be a long-term process. Hence, it might be necessary placing

sufficient resources in establishing competence, for example in a professional or a team in the

field.   

The Team Player The Team Player was generated as a model

because we found that an increasing number

of retailers are facing industrial challenges

in collaboration. Team players understand

that the whole retail industry must work

together, in order to tackle environmental

and societal issues. The Retail Industry

Leaders Association, the Sustainable

Apparel Coalition and the Ethical Trading

Initiative are organizations with the objective of increasing such collaboration. Similar to the

STOF model, the Team Player is shaped as a network of companies, organizations, research

institutions, and individual experts. The Team Player is a model with a focus on both

environmental and societal issues, because retailers have a large impact on both dimensions

and must find ways to solve both issues.

The Responisble Value Proposition The Team Player proposes solutions through collaboration. Team Players are actively

communicating, and improving their products and services according to market demand. This

increases the value for the mindful consumer concerned with both societal and environmental

issues. Team Players tackle challenges in the retail industry, by strengthening the control over

environmental and societal issues. They are focusing on areas that are of the highest

importance for retailers, customers, the market or governmental regulations.   

The Responsible Customer As consumers are becoming more aware of the importance of responsible business practices,

retailers are experiencing increased pressure from customers to act more responsible. Driven

by external pressure, it becomes important to be able to assure customers which engage in

mindful consumption.

Figure 9: The Team Player

49

The Responsible Value Delivery Retailers with large, and segmented supply chains, are often a part of global organizations

improving supply chain management. This enables them to collaborate with each other in

order to increase the control over supply chains. There are a large number of initiatives,

partnerships and organizations that are aiming at gathering more companies together in order

to tackle the various issues that are relevant for retailers. Several retailers in the textile industry

are members of the Sustainable Apparel Coalition. This partnership helps retailers be a part of

the progress towards sustainable materials, such as sustainable production of cotton. IKEA

meets its goal of using cotton from sustainable plantations, and is managing this with its

supporting partners in the Ethical Trading Initiative (IEH, 2015).   

Companies also form several partnerships in order to solve societal problems. Lindex

(n.d.) collaborates with the School of Hope foundation. This partnership contributes with

education for children in the Slums of Dhaka, Bangladesh, donating clothes to children,

collecting money, and helping to educate teachers. Similarly, Nike is addressing the issue of

child obesity with their Designed to Move forum, in collaboration with 70 other expert

organizations (Designed to Move, n.d.).

The Responsible Value Capture There are certain challenges connected to leading different responsible business practices, for

example, high costs or lack of resources. These problems may ease when the challenges are

dealt with together. By collaborating, companies can create synergy effects, and share the costs

related to implement responsible business practices throughout the supply chain.

Consequently, they can gain greater control. In addition, collaborating companies can take

advantages by sharing their knowledge on these issues.   

The Supply Chain Manager    The Supply Chain Manager was generated as a model because retailers are becoming more

concerned about their products’ origin, and want to gain more insight in suppliers’ practices.

We found that gaining control over the supply chain is one of the greatest challenges in the

retail industry. Consequently, we developed the Supply Chain Manager as a model, because

retailers are implementing responsible business practices in order to improve the supply chain,

50

suppliers’ working conditions and

suppliers’ quality of life. Hence, the Supply

Chain Manager is a model with a societal

focus, due to the work that is carried out in

order to solve the societal challenges

throughout the supply chain.

The Responsible Value Proposition The Supply Chain Manager offers products

which have gone through an entirely

responsible supply chain. The retailers

adopt practices that aim to improve suppliers’ working conditions and their quality of life. A

central part of the value proposition is therefore being able to assure that the supply chain is

based on responsible business practices, primarily that working conditions are prioritized and

improved.

The Responsible Customer Customers are increasingly becoming concerned with having insight in the origin of purchased

products and are demanding to receive information on how products are being produced.

Hence, it is important for retailers to have a transparent value chain, which can reassure

concerned and engaged customers. Consumers want to be reassured that the products they are

buying, are not produced under questionable or unethical circumstances. H&M (n.d.-d) creates

transparency and reassures customers about their supply chain, by opening their supplier list

to the public.

The Responsible Value Delivery In order to ensure that value is delivered through a responsible supply chain, retailers need to

adopt certain practices. These are practices with the objective of increasing control, as well as

improving processes in collaboration with suppliers. Some retailers purchase products or

materials from several suppliers, and suppliers might even buy these products or materials

from other third parties. Consequently, the length of the supply chain grows, and might be

challenging to manage and control. Common issues related to complex supply chains are poor

working conditions, unsafe work environment, or violation of ethical guidelines.   

In order to gain control over suppliers, retailers are engaging in the work of the

suppliers, visiting and monitoring factories, and attempting to cooperate with suppliers.

According to Stormberg (n.d.), their factory overview and control involves monitoring

Figure 10: The Supply Chain

Manager

51

factories and conducting random controls, interviewing factory workers and making factory

lists public to promote transparency. Further, establishing standards and ethical guidelines

becomes crucial in order to manage the supply chain. These standards are primarily about

assuring that human rights are not violated, and to assure proper and secure working

conditions. IKEA (2014), for example, has established clear IWAY standards, which promote

a secure and proper working environment. Additionally, retailers are in a greater extent

providing programs or offering training for their suppliers that can improve suppliers’ well-

being. GAP’s (n.d.) Personal Advancement & Career Enhancement program, is improving

the quality of life for women who make their clothes, by providing them with the skills and

confidence they need to advance at work and in life.

The Responsible Value Capture Supply chain management and gaining control over an entire supply chain might increase

costs, as these responsible practices require considerable amount of resources. In order to gain

control over the supply chain, many retailers are attempting to make their supply chain as short

as possible, which is another factor that might lead to changes in the cost structure. Supply

chain management is often done in collaboration with other retailers, which may ease costs

for an individual retailer.

The Problem Solver The Problem Solver is generated as a

model because various retailers are

shaping their business in a way that also

has a positive effect on the society or the

well-being of others. The Problem Solvers

are social entrepreneurs with a mission to

change the society. From the companies

identified as Problem Solvers, we further

generated two groupings. The first group

consists of start-ups with a business

concept aiming at solving a societal problem. The second group consists of retailers which

have adopted this idea into the business model later in the business’ life cycle. The Problem

Solver is a model with a societal focus, as the mission is to solve a societal challenge.

Figure 11: The Problem

Solver

52

The Responsible Value Proposition Problem Solvers are not only proposing value for the customer, but for the society as well.   

Practices such as charity projects, inclusive recruitment, and engaging in local community

efforts are some of the relevant examples in this model. Fretex (n.d.) proposes value by

actively helping people get back to employment. Hence, the company aims to solve the

problems of underemployment. Problem Solvers tend to go beyond the basic rules and

expectations of the society. Identifying societal issues and needs is important in order to

develop this type of business model. Product development might therefore start by identifying

a global need, by for example studying UN Statistics and Sustainable Development Goals.

The Responsible Customer The Problem Solver may not identify its target market as end-consumers, but as the society,

and the world as a whole. Nevertheless, as consumers are becoming increasingly concerned

with mindful consumption, the Problem Solver is attempting to meet the demands from

mindful consumers. TOMS (n.d.) is operating with a one-to-one model, meaning that, for

every pair of shoes sold to a customer, another pair of shoes is donated to a child in need.

Hence, the customer is a central part of their model, because customers must participate in the

process.

The Responsible Value Delivery Delivering value to the society is done in several ways. For example, TOMS was established

based on the idea of solving a societal problem. In addition, the company chooses a production

country according to societal challenges in that specific country, in order to provide work and

economic value (TOMS, 2015). Inclusive recruitment is another example. Retailers who lead

an inclusive recruitment seek out to solve the societal issue of unemployment. Stormberg’s

recruitment policy implies that 25 % of their employees should be people that have had trouble

entering the labor market (Olsen, 2015). M&S’ (n.d.-b) Marks & Start Program helps single

parents, disadvantaged groups and people who are homeless into work. A common practice is

also to actively help local communities, by for example donating essential resources or

volunteering in community projects. Canon (2015) donates solar-powered lights to

communities without electricity, and hence, attempts to solve an important problem affecting

several members of a society. Levi Strauss & Co (n.d.-d) has engaged in a project called

Community Day, where employees around the world take a day away from work to volunteer

with local non-profit organizations.   

53

The Responsible Value Capture The Problem Solver might have high costs related to their engagement in the society. Cost

structures might be influenced by donations and other societal projects, which require a certain

amount of resources.   

5.1.1 Concluding remarks The objective in this Chapter was to generate responsible business models that are relevant in

the retail industry. It is important to emphasize that this is a presentation of different types

which can represent the different focal points business models can have. It does not conclude

that the models are mutually exclusive. Retailers can implement more than one type, or shift

from one type to another. Our aim is to conceptualize the different types to provide a practical

tool that will help retailers evolve and shift. A business model innovation can be more feasible

if the company has a clear end goal. The different types are summarized in Table 11.

The Value Proposition The Customer The Value Delivery The Value

Capture

The Reinventor

Makes old new again through reuse and recycling.

Mindful consumers. Customers are actively participating in the process.

Recycles materials, or sells the products as second hand.

Technological investments. Organizational set-up. Material-savings.

The Green Enthusiast

Delivers eco-friendly products based on eco-friendly production.

Mindful consumers. Active communication, e.g. green indexes and labels.

Measures and improves impact. Resource efficiency.

Resources towards new green technologies. Cost-savings.

The Teacher

Encourages stakeholders to become eco-friendly.

Guides customers towards mindful consumption. Strengthens knowledge. Active communication.

Establishes communication and information channels.

Places resources in communication and information channels.

The Team Player

Proposes solutions through collaboration.

Communicates responsible efforts.

Lightens the load on each retailer and strengthens the control.

Synergy effects. Shared knowledge.

The Supply Chain Manager

Delivers responsible products produced in a responsible supply chain.

Mindful consumers. Transparent communication.

Supply chain management. Check-ups, ethical guidelines, agreements and contracts. Engages in well-being of suppliers.

Places resources towards supply chain management.

54

The Problem Solver

Sets out to fix a societal problem. Proposes value to both customers and society.

Mindful consumers. Active communication with customers.

Inclusive recruitment. Community involvement. Societal projects.

Delegates resources to community involvement and charitable donations.

Table 11: Summarization of the responsible business models

In the next Section, we provide a step-by-step framework which, seen in the light of the

different types of business models, explains how retailers can shift their business models

towards more responsible business practices.

5.2 Shifting Towards More Responsible Business Models in the Retail Industry Based on our in-depth interviews with IKEA, H&M and Stormberg, we report the main

challenges that retailers may encounter in the process of shifting towards responsible business

models, and the critical resources that are needed to tackle these challenges. We categorize

these along the five-stage model described in Section 3.3: Initiation, Ideation, Integration,

Implementation and Continuous business model innovation. Figure 12 summarizes the main

challenges and success factors from each stage of the business model innovation process. A

detailed report on our findings for each of the case companies can be found in Appendix 3:

Findings From the In-depth Interviews.

Figure 12: The main challenges and success factors from each stage

55

1. Initiation: Understanding the Need for Change Our main findings indicate that the common initiating triggers are morality and profitability.

H&M, Stormberg and IKEA emphasize that leading a responsible business because it is

morally correct, is an important internal driver. This motivates retailers to shape a sustainable

future. Profitability is an initiating driver because a responsible business model can result in a

strengthened brand image, increased customer loyalty, a first mover advantage, reduced costs,

and avoidance of a brand crisis. A reason for why many

retailers have not initiated responsible business practices,

is because they lack a complete understanding of the

sources for long-term profitability. Many retailers

underestimate the benefits of a responsible business model,

and may act ignorant to the initiating drivers. Gramstad

explains that “many retailers find it comfortable to stay

under the radar. If companies start to communicate what

they are doing, it is easier to criticize them for not doing

enough”. Hence, some retailers find it risky to implement a

responsible business model.

It can be challenging to understand the link between responsible business practices and

increased sales. On the other hand, being a responsible retailer can increase customer loyalty

and create a stronger brand image, which in turn can result in higher repurchasing rate and

positive external attention. Consumer goods, such as food and clothes, are of personal

importance in consumers’ everyday life. Attaching responsible values to such consumer goods

can lead to a stronger brand equity.

Companies should think ahead in order to avoid a reputation crisis. However, a small

retail store with an unknown brand will not gain a considerable amount of media pressure.

Whereas IKEA, explains that being a popular brand coexists with a lot of external attention.

Such attention strengthens the driver for having a responsible business model. This can

indicate that a retailer of a smaller size does not initiate a business model innovation for

responsibility, due to the lacking risk of unfortunate media coverage.

2. Ideation: Reframing Beliefs Main findings indicate that retailers must reframe beliefs about how value is proposed and

delivered. Responsible business practices must also be prioritized, because it is not possible to

“Firstly, I think corporate

responsibility is important for

all companies regardless of

industry. Secondly, I believe

that showing corporate

responsibility actively is not

only important, but also

profitable” (Stormberg, Appendix 3)

56

do everything at once. Reframing beliefs can be challenging due to a rigid mindset and a well-

established business concept. Further, it can be challenging to ideate the equilibrium between

(1) having a positive impact on the environment or the society, and (2) being profitable.

In order to change a mindset, reframing beliefs about how the business proposes value

may be a good place to start. For example, by visualizing how the proposed value to the

customers also can have a positive impact on the

environment or society. Retailers should not

underestimate the potential that lies in establishing

businesses based on solving world problems, through

environmental technology or social entrepreneurship.

On the other hand, many retailers already have a

successful value proposition and business concept that

is well-established in the market. In order to find the

equilibrium between responsibility and profitability, a

solution might be to reframe beliefs about the value

delivery. This involves integrating responsibility into

the traditional business concept.

Retailers must analyze own operations in light of

responsible business practices, in order to reframe

beliefs about the value delivery.

A responsible strategy will have more effect if clear goals are set, and the chosen

practices gain full attention from the entire organization. IKEA explains that “There are

numerous things we want to do in this company. We therefore need to find a balanced

prioritization of all the things we want to do”. Stormberg states that the most critical challenge

as a textile producer is supply chain management, and how the company must prioritize this

challenge on a daily basis. H&M explains how they prioritize resources towards the challenge

of resource scarcity, as a considerable amount of the environmental impact lies in the

production of cotton. A prioritization of practices sharpens the strategic goals, and gives

managers a road map for which practices that should gain their full attention.

“We can make ecological products,

and produce with recycled cotton,

but if the clothes do not look good, it

is pointless. There is only a small

part of the population that wears

clothes just because the clothes are

sustainable. The rest of the

population wants to look good.

Hence, H&M aims at being the

fashion destination number one.

However, we must deliver quality

and fashion in a sustainable way” (H&M, Appendix 3)

57

3. Integration: Delivering a Strategic Approach Our findings show that IKEA, H&M and Stormberg

have systematic, but still holistic, approaches to their

responsible strategies, meaning that they want to impact

positively in several areas. In contrast, many retailers

are using a cyclical approach, which creates challenges

in the implementation phase. They are carrying out

responsible business practices, but have no deliberate

strategies on how to do it. Many retailers are easily

sidetracked, as they do not facilitate the practices according to a plan. The implementation of

deliberate strategies can function as guides, and be helpful in order to stay on track. IKEA,

H&M and Stormberg have systematic strategies in order to capture all aspects related to the

holistic approaches. Table 13 illustrates how the interviewees’ systematic approaches are

characterized by a clear strategy, with two to four focus areas.

IKEA H&M Stormberg People & Planet Positive 1. Enable people to live a more sustainable life at home 2. Becoming energy and resource independent 3. Better life for people and the environment

Taking care of (1) People and (2) the Environment - Provide fashion for conscious customers - Choose and reward responsible partners - Be ethical - Be climate smart - Reduce, reuse, recycle - Use natural resources responsibly - Strengthen communities

1. Climate and strategy 2. Ethical trade 3.Inclusive employment 4. 1 % [support to humanitarian social purposes]

Table 12 : Showing the different systematic integration approaches

A systematic approach should also evaluate the responsible business practices that are being

integrated. Following regular evaluations on the progress can help retailers assess whether or

not the transformation towards a more responsible business model is on track. Revisions and

evaluations of the integrated strategy can help retailers locate less efficient practices, and

practices that need more attention.

4. Implementation: Going from A to B The interviews indicate the importance of four important factors, namely, risk management,

managerial support, and a cultural and organizational change. By following a systematic

approach, the retailer will have a thorough strategy to implement throughout the organization.

“It is important to have an own

base to stand on. Or else it is

quite easy to end up in one day

the focus is on this issue, and the

next day the focus is on another

issue”. (IKEA, Appendix 3)

58

It is important to emphasize that implementing a responsible way of doing business requires

resources and time.

The Importance of Risk Assessments Our findings indicate the importance of transparency

and risk assessments. The implementation of

responsible business practices can lead to increased

external attention. Such attention can intensify the risk

of a brand crisis, and lead to unanticipated costs. H&M

uses transparency and active communication in order to

increase external stakeholders’ knowledge about

H&M’s responsible practices. Increased knowledge among customers and other external

stakeholders, can be beneficial for the retailer’s credibility and limit the risk of a brand crisis.

H&M explains that the company has opened its supplier lists in order to increase transparency.

Programs aiming to increase control throughout a retailers’ supply chain can also minimize

risk. IKEA, for example, uses IWAY standards. These are requirements IKEA is demanding

suppliers to follow, and concern both environmental considerations and working conditions.

The Importance of Management Support Our findings indicate the importance of an engaged person or

team that is responsible for carrying out the business model

innovation. Lack of commitment from top management is a

common challenge which is crucial to overcome, as it is up to

the leader whether or not responsible business practices is on

the company’s agenda. A critical resource for the business

model innovation process is therefore management

commitment. The executive management should be both

passionate about the responsible vision, and willing to make the necessary investments. It

should be taken into account at board meetings, and in communication activities for the

company as a whole.

While the top leader is of crucial importance, the executive manager has a hectic

workday with several objectives. Other managerial support systems must therefore be set in

place. Implementation requires knowledge and understanding on the subject, and someone

with a focused objective of running such a transformation. A solution can be to hire a dedicated

CSR or sustainability manager, or establish a team that drives the business model innovation.

“We can see how much critical

focus there has been on H&M, and

they are probably the best ones in

the industry” (Gramstad, Appendix 3)

“A company is dependent

on someone that is

constantly looking after

and pushing, and gets CSR

integrated, and not

disintegrated” (Gramstad, Appendix 3)

59

IKEA points out that enablers can be people throughout the whole company, because the drive

does not necessarily have to be formalized by executive managers. The management should,

however, encourage such engagement.

The Importance of a Responsible Mindset as part of the Culture Our findings indicate the importance of integrating a

responsible mindset as part of the organizational culture.

A cultural change is an ongoing process where motivating

employees, and increasing knowledge across

organizational levels, is central.

One of the main challenges when undergoing a business

model innovation, is internal resistance for change. It is

important that the organization as a whole reframes traditional beliefs about how business is

run. However, reframing traditional beliefs among the executive managers, middle

management and the front personnel can be a time-consuming process.

When retailers try to establish a new mindset, they find it challenging to reach out to

all of their employees. Consequently, knowledge about the responsible business practices may

not correlate across organizational levels, which leads to conflicting signals. A retailer usually

delivers its brand in stores, where the front personnel engages with customers. In order to

increase knowledge and awareness among co-workers, H&M operates with a mandatory e-

course, Conscious for Beginners, and

IKEA suggests meetings where they

address one or two current sustainability

issues. It is essential to find ways of

signalizing the importance of shifting

towards a responsible business model.

Integrating responsible values in the

organizational vision can have a strong

signalizing effect. Whereas integrating

responsible values in job descriptions can promote individual accountability for the

responsible practices. H&M argues that individual accountability can be strengthened by the

use of Key Performance Indicators. Our understanding is that such indicators also have a

strong signalizing effect as they signalize the overall objective of the company. IKEA argues

that setting a goal as one hundred percent creates energy and engagement among every co-

“Employees are the ones who

have to carry out the work, and

if they do not perceive this as

important or correct, then we are

not headed anywhere” (IKEA, Appendix 3).

“A huge challenge, especially in the retail

industry, is communicating and reaching out

to all of our employees. Seeing that customers

are increasingly engaging in CSR issues, it is

important to engage employees working in our

stores. Our employees should have insight in

all of our work with CSR and sustainability” (H&M, Appendix 3)

60

worker involved. Hence, a quantified goal can in itself be motivating. Lastly, IKEA

encourages its co-workers to suggest own ideas for sustainability improvements. Such

encouragement can lead to a stronger feeling of ownership, and therefore increase motivation.

The Importance of Organizational Change Our findings indicate that retailers must realize that an organizational change is a long-term

process which requires time, patience and constant care. Consequently, business model

innovation needs to be perceived as a long-term

process. It is common to lead a temporary model

during the process, because it is difficult to

implement all transformations needed at the

same time. Consequently, the result may be that

some departments are running their daily business based on the traditional business concept,

while management and others are running daily operations based on the new responsible

concept. In other words, being stuck in the middle between an old and a new model. Many

retailers are shortening their supply chains in order to improve the efficiency of organizational

changes. Lowering the number of external parties makes retailers more equipped to transform

the business model, as they have less components to take into account, and therefore gain

increased control.

Shifting a model requires attention from the management group. IKEA has a Corporate

Sustainability Officer in the global management group, as well as one Sustainability Manager

in every core function and country they are present in. Such organizational changes are of

crucial importance in order to shift focus throughout the process. These managers should

ideally follow up the entire value chain, both the front and back end. Lastly, retailers can shift

more easily by gaining increased competence and knowledge. For example, by recruiting new

managers with the required knowledge and capabilities, or gaining synergy effects from

external partners.

5. Continuous Business Model Innovation: Being Open for Changes Our findings indicate the importance of being open to a continuous process in order to follow

changes in the external surroundings. Rigid business models is a central challenge.

Consequently, an open-minded approach, and continuous work with responsible business

practices, must be adopted. Continuous business model innovation is important in order to

promote an innovative business model. This involves thinking ahead, and visualizing what the

“Certain issues require a longer

timeframe for obtaining results, and it is

not possible to do everything at once” (IKEA, Appendix 3)

61

company wants to be in the future. For example, does the company want to be a first mover in

certain areas? Which responsible business practices will be relevant in the next couple of

years? How can the company innovate its business model in order to tackle the increasing

resource scarcity? Business model innovation can be a resource-demanding, and time-

consuming process, and hence, there is a need to think ahead in order to develop systematic

approaches to necessary changes. Having a dedicated CSR or sustainability manager, can work

as an important driver for continuous business

model innovation. Another driver can be a team

focusing on locating trends, future disruptions

and changing market conditions.

5.2.1 Concluding remarks The objective of this Section was to derive a systematic framework for retailers that are aiming

to implement a responsible business model. To this end, we have gone through five stages, as

summarized in Table 13.

Main findings INITIATION Many retailers do not initiate a business model innovation because they are

ignorant towards the need for change. The common triggers are morality and profitability. Morality is an internal motivation for shaping a sustainable future. Whereas, profitability is an initiating driver due to the possibility of strengthened brand image, customer loyalty, and the avoidance of a brand crisis.

IDEATION During ideation many retailers struggle with rigid mindsets. To be able to reframe beliefs, a change in the way value is delivered can be helpful. Findings indicate that retailers should lead practices that co-exist with the current business concept, and find a balanced prioritization of responsible practices.

INTEGRATION Many retailers lack an efficient strategy. While success is often found by following a systematic plan. Findings indicate that a systematic approach with a few prioritized focus areas is recommended.

IMPLEMENTATION Many retailers get stuck between an old and new model To successfully shit a business model: (1) Lead a controlled and transparent business model innovation, (2) Top leader, competent team and CSR managers are important drivers, (3) Engage and motivate, and increase co-workers’ knowledge, (4) Change takes time, lead a process view.

CONTINUOUS BMI To be able to gain long-term advantages, findings indicate that retailers should implement a long-term mindset, be open for changes and lead continuous ideation.

Table 13: A systematic framework for business model innovation for

responsibility

“I think new cases will constantly

arrive. For example, things that we

usually would not interpret as CSR” (Gramstad, Appendix 3)

62

6. Discussion and Conclusion There are two important reasons for why retailers are resistant to implement responsible

business models: (1) There lacks a clear conceptualization of the different types of responsible

business models that retailers can adopt, and (2) there lacks an understanding on how to

implement responsible business practices into the business model. To address these issues, the

aim of our thesis has been twofold. Firstly, we have identified the different types of responsible

business models in the retail industry. Secondly, we have delivered a framework for business

model innovation illustrating how retailers can shift towards more responsible business

models. In the following, we discuss the most important findings from Chapter 5. Additionally,

we deliver managerial and theoretical implications from our findings, discuss limitations, and

propose avenues for future research.

6.1 What are the Emerging Types of Responsible Business Models in the Retail Industry? In order to identify types of responsible business models in the retail industry, we have

generated six models that differ in terms of the extent to which environmental and societal

goals are integrated into the business model. The Reinventor is a model that emphasizes

circular economy, and keeps resources in closed loop systems by reusing and recycling. The

Green Enthusiast strongly emphasizes practices that reduces negative impact on the

environment, by improving resource and energy efficiency. The Teacher encourages

stakeholders to become more aware of environmental and societal issues. The Team Player

aims to create a responsible retail industry in collaboration with others. The Supply Chain

Manager attempts to solve societal issues in the supply chain, and improve the life and well-

being of individuals throughout the supply chain. Lastly, the Problem Solver aims at solving

a societal issue through inclusive employment and local community projects.

The models differ by having different focal points and mindsets. For example, the focal

point for the Team Player is collaboration, whereas the focal point for the Reinventor is to

recycle and reuse. However, some practices are common across the models. For instance, the

Reinventor and the Green Enthusiast, are both models aiming at improving resource efficiency

in order to reduce negative impact on the environment. Furthermore, The Team Player often

focuses on supply chain management in collaboration with others, and therefore draws

similarities to the Supply Chain Manager.

The value proposition and the value delivery are found to be the pillars leading the

change. To exemplify, a change located in a new need in the market, for instance an increasing

63

demand for green products, changes the value proposition in the Green Enthusiast.

Consequently, green products have to be produced in a certain matter, which will change the

way in which value is delivered.

Retailers can use one or more types in order to shape their transformation towards a

responsible business model. Hence, the models are not mutually exclusive. We have

envisioned that these types can be used as end goals when retailers are in an ideation process,

and searching for ways to adopt responsible business practices. Retailers may choose to move

forward with one of the models. However, a higher degree of responsibility will first occur

when more than one model is adopted. We have found that large and well-established retailers

are attempting to lead such a holistic approach, as their objective is to implement all of the six

models. In contrast, small retailers are adopting one or two models. Naturally, these

distinctions are due to differences in company size and the amount of accumulated resources.

We assumed we would generate a larger amount of models with an environmental

focus, as environmental and climate concerns are of high priority today. Circular economy,

for instance, is one of the most prominent trends in the industry. Our findings, however,

generated an equal amount of models with a societal and an environmental focus.

Nevertheless, our findings suggest that most retailers follow the Green Enthusiasts’ objective,

as we found that a greater number of responsible business practices are characterized as green

practices. This implies that reducing negative impact on the environment is highly prioritized

among retailers.

We are surprised that our findings did not imply an emerging use of collaborative

consumption among retailers, which is evident in other industries, such as housing (e.g.

AirBnB) and taxi (e.g. Uber). However, we believe that this will be a central trend in the near

future, and that retailers will find ways of benefiting from collaborative consumption.

Naturally, this trend can be found in one of the eight archetypes delivered by Bocken et al.

(2014), considering that these archetypes are not specified for one specific industry.

Most of the models identified in this thesis can be compared to Bocken et al.’s (2014)

archetypes. For example, the Reinventor can be compared to the archetype Create value from

waste, where circular economy is one of the mentioned examples. The Teacher can be

compared to the archetype Encourage Efficiency, where consumer education is one of the

examples. Bocken et al. (2014) divide archetypes between the groupings: Technological,

Social and Organisational. Our thesis exclusively divides between the environmental and

societal dimension, which provides a more simplified overview. In addition, the models

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presented in our thesis have a more narrowed focus. For example, The Team player is a model

solely focusing on solving challenges in collaboration with others. In Bocken et al.’s (2014)

study, we also find the use of collaboration and partnerships. However, this is just one out of

many examples grouped under the archetype Develop scale up solutions. In general, Bocken

et al. (2014) gather more examples under one archetype, and the archetypes have a stronger

emphasis on environmental innovations. In contrast, our thesis attempts to deliver narrowed

model types, and investigate both environmental and societal practices.

To conclude, the models presented in this thesis are exclusively directed towards the

retail industry, providing insight into responsible business practices that are relevant for

retailers. Further, we believe that our simplified models can more easily appeal to retailers, as

the main focus of one specific model is clear and simple to understand.

6.2 How can Retailers Shift Towards more Responsible Business Models? To identify how retailers can shift towards more responsible business models, we have used

a step-by-step framework for business model innovation, and identified challenges and success

factors. Many retailers do not Initiate a business model innovation because they are ignorant

towards the need for change. Consequently, the knowledge about the common triggers,

morality and profitability, must be strengthened. During Ideation many retailers struggle with

rigid mindsets. To be able to reframe beliefs, a change in the way value is delivered can be

helpful. When considering an Integration approach many retailers lack an efficient strategy.

Findings indicate that success is often found by following a systematic plan. During

Implementation, many retailers get stuck between an old and a new business model. To

successfully shift the business model, using active management, engaging employees, and

increasing control throughout the value chain are crucial factors. Lastly, Continuous Business

Model Innovation requires a long-term way of thinking, which is necessary in order to locate

changing trends in the external surroundings.

Our findings indicate that a business model innovation often is required when the

objective is to implement responsible business practices. The interviews highlighted that

adopting responsible business practices changes the four pillars of the business model, and

hence, changes the way in which a retailer creates, delivers and captures value. The Value

Proposition is often changed because retailers must, when shifting towards a responsible

business model, not only propose value to their customers, but also to the environment or the

society. In order to change what value is being offered, it is also necessary to change how

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value is delivered. The interviews highlighted the importance of staying true to the core

business concept, for example, by delivering the traditional product, but in a sustainable way.

Value Capture is often affected by changes in other pillars, because shifting towards a

responsible business model requires considerable amount of resources and might change cost

structures. Revenue streams might be changed if increased customer loyalty or brand image is

enhanced.

The importance of an active management driving the whole business model innovation

is a common feature in several stages of the framework, in particular the stages concerning

implementation and continuous business model innovation. Hence, a specific person or team

which facilitates the required activities in each stage can be a critical factor for success.

Another common feature is the importance of changing mindsets and reframing beliefs about

traditional ways of running a business. We found that changing mindsets and reframing beliefs

is often done, not only during ideation, but throughout the whole process. Findings indicate

the importance of cultural and organizational change, which require a change in mindsets

among employees. For example, by integrating a responsible way of thinking as part of the

organizational culture. Lastly, another common feature is the importance of patience about the

time consuming process in each stage.

To conclude, by delivering a systematic framework for responsible business model

innovation, we are able to provide a practical tool that can serve as a guide for retailers.

Particularly, the in-depth interviews were useful as they allowed us to gain insight into how

challenges can be dealt with at each stage of the process. This is a topic that had been neglected

so far in the sustainability and business model innovation literature.

6.3 Managerial Implications The six types of responsible business models conceptualized in this thesis, can be used as end

goals for retailers. The models can, for example, be used in the ideation process, where the

retailer can gain creative input and guidance. By having the six models in mind, retailers can

more easily allocate resources according to their chosen focal point. The six models can

contribute to CSR practitioners because they are more user-friendly than existing archetypes,

which are too broad and not targeted towards a specific industry. A narrowed focal point and

mindset contributes in making the models user-friendly.

To be able to implement responsible business practices successfully, we further

recommend managers to adopt the step-by-step framework for business model innovation

presented in this thesis. Delivering a framework based on systematic stages, contributes in

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making the process logical to follow for practitioners. We underline the importance of

managerial support, a thorough risk assessment, a transparent communication strategy, and a

mindset of continuous business model innovation.

6.4 Theoretical Implications To date, concepts such as corporate social responsibility and sustainability are often used

interchangeably in extant literature. This has contributed to a conceptual ambiguity, which has

also affected research on sustainable business models. To address this ambiguity, we have

aimed for clear definitions regarding responsible business practices, a responsible business

model and responsible business model innovation in this thesis. In particular, we believe that

a definition of responsible business practices as a common term for CSR and sustainability,

can be used in future research concerning environmental and societal issues. The definition

can therefore contribute in limiting the confusion between CSR and sustainability.

By adopting a business model perspective, we are contributing to academics working

in the field of CSR and sustainability. We have investigated how responsible business

practices can be integrated into business models, which delivers a comprehensive overview.

Further, we have investigated how the pillars of a business model are affected by the adoption

of responsible business practices, and analyzed the interaction between pillars. We are

contributing to the business model literature with the six model types, which have been

generated based on a systematic approach. The business model literature had been lacking

such systematic approaches to the development of business model classifications. We believe

that our conceptualization of a responsible business model is applicable for the retail industry,

and therefore contributes to existing literature. Furthermore, by examining the entire retail

industry we are providing a more generalizable and comprehensive overview of the industry

as a whole.

We further strengthen the understanding of how a business model is affected by the

implementation of responsible business practices. We have done this by deriving a step-by-

step framework for business model innovation. Contributions to existing literature are made

by delivering a process view, which takes challenges and critical capabilities into account.

While responsible business model innovation is not an entirely new subject in contemporary

research, it remains an emerging research field. The business model typology had been

neglected in practitioner-oriented literature on corporate responsibility and management,

resulting in managers lacking a practical tool for launching a business model innovation in

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general. We try to strengthen this understanding by delivering a roadmap for retailers with a

step-by-step framework.

6.5 Limitations and Future Research During our work with the thesis we have gained insight into the retail industry and how

responsible practices are being implemented into business models, and we therefore believe

that we contribute to existing knowledge. However, there are limitations related to the sample

choices and the way of collecting data.

Our findings might indicate that implementing responsible business practices is best

operationalized by larger companies with great amount of resources, as we only have

interviewed retailers which already have successfully managed to implement responsible

business practices. Interviewing a retailer that has not been able to implement responsible

business practices at all, could have strengthened the thesis’ validity. Perhaps we could have

found other challenges in each stage of the business model innovation framework, which we

have not covered in this thesis. We therefore suggest that future research should investigate

the nature of responsible business model innovation in firms of different sizes.

On a similar note, by interviewing experts in the field, that is, CSR or sustainability

managers, we neglect other functions in an organization that might play a role in the

transformation towards responsible business models. Our findings can therefore be less

generalizable, considering that all of our chosen interviewees have similar roles. When

studying business model innovation, other roles in the company should have been taken into

account as well.

We gained a huge amount of information by establishing the retail industry as our

research field and leading an exploratory design. Due to the limited time frame, we were only

able to locate main trends and derive main focal points in the industry. If we had limited our

search, for example towards a specific sector of the industry, this would probably have given

more detailed results. The fact that we focus specifically on the retail industry, also impedes

the possibility to generalize the findings and recommendations to other industries.

In addition, the sample of 72 retailers was not limited due to access to more data, but

to our time frame limiting us from using more resources on data collection. However, a larger

sample size would perhaps have the ability to, not only strengthen our thesis, but also result in

different findings. Perhaps we could have identified a seventh model. Additionally, there are

limitations to the proposed categorization of the responsible business models. The approach is

reflective, based on historical examples, and can therefore not predict entirely new innovative

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approaches. To be able to capture the latest state-of-practices, the approach may need to be

revisited from time to time.

Furthermore, we exclude the question of short-term profitability. Such subjects are

regretfully limiting our thesis. We assumed that responsible business practices lead to long-

term profit for retailers, and further examined how taking environmental and societal

considerations into account, can change strategic and organizational aspects. Research on the

correlation between profitability and responsibility has previously been investigated (e.g.,

Jørgensen & Pedersen, 2013). However, profitability in specific for the retail industry is an

interesting topic for further research. In addition, it would be interesting to measure how a

specific responsible business practice in the value delivery, will impact the cost structure in

the value capture.

More work lies ahead for future research on responsible business models and

responsible business model innovation. The types of responsible business models, and the

business model innovation framework we present in this thesis provide a comprehensive

overview, and an indication of how activities can be carried out in practice. Hence, our

contribution can serve as a starting point. However, further research is needed to clarify the

concepts, gain deeper understanding in each of the six types of responsible business models,

and develop and test empirical measures.

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!77

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ings

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pe

1 M

ihal

ič, Ž

abka

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Hot

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busi

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Com

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Dev

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B

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tify

a ne

w b

usin

ess m

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usta

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evel

opm

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New

man

agem

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ools

and

app

roac

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f Nor

dic

orga

niza

tions

do

help

sust

aina

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deve

lopm

ent,

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t is t

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cial

con

text

in w

hich

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e or

gani

zatio

ns fu

nctio

n th

at is

a c

ritic

al fa

ctor

Nor

dic

orga

niza

tions

3 O

sbor

ne e

t al.

(201

4)

Sust

aina

ble

busi

ness

m

odel

for p

ublic

se

rvic

e or

gani

zatio

ns C

once

ptua

l R

efle

cts o

n th

e bu

sine

ss m

odel

for p

ublic

serv

ice

orga

niza

tions

In

clud

es to

pics

abo

ut g

loba

l eco

nom

ic re

cess

ion,

pub

lic sp

endi

ng, a

nd c

onte

mpo

rary

pub

lic m

anag

emen

t the

ory

Publ

ic se

ctor

, pu

blic

serv

ice

orga

niza

tions

4

Shor

tsle

eve

(200

9) E

ffic

ient

and

su

stai

nabl

e bu

sine

ss

mod

els

Con

cept

ual

The

finan

cial

cris

is a

nd th

e pr

essu

re to

go

“gre

en”

are

prom

ptin

g fir

ms t

o be

com

e m

ore

effic

ient

. Dis

cuss

es h

ow b

usin

ess e

nter

pris

es c

an c

reat

e a

mor

e ef

ficie

nt a

nd su

stai

nabl

e bu

sine

ss m

odel

in o

rder

to in

crea

se p

rofit

abili

ty

Ente

rpris

es

5 La

ukka

nen

&

Pata

la (2

014)

B

arrie

rs to

su

stai

nabl

e bu

sine

ss

mod

el in

nova

tion

Con

cept

ual

Exam

ines

how

soci

etal

tran

sitio

n to

war

ds su

stai

nabl

e bu

sine

ss m

odel

s can

be

achi

eved

C

ateg

oriz

es k

ey st

ruct

ural

bar

riers

to su

stai

nabl

e bu

sine

ss m

odel

inno

vatio

n an

d ho

w th

ese

can

be o

verc

ome

thro

ugh

activ

ities

of g

over

nmen

ts, f

irms

and

cons

umer

s

Gov

ernm

ents

and

fir

ms

6 C

arbo

ne (2

003)

Et

hics

, pat

ents

and

su

stai

nabi

lity

of

biot

ech

busi

ness

m

odel

Con

cept

ual

Expl

ains

the

impo

rtanc

e of

bus

ines

s mod

el to

the

succ

ess o

f the

bio

tech

indu

stry

Ex

amin

es th

e ch

angi

ng n

atur

e of

inno

vatio

n in

the

biol

ogic

al sc

ienc

es

Phar

mac

eutic

al

biot

echn

olog

y in

dust

ry in

the

US

7 Jo

ule

(201

1)

Sust

aina

bilit

y as

a

busi

ness

mod

el fo

r fa

shio

n-fo

rwar

d th

inki

ng

Sing

le-c

ase

stud

y Ex

amin

es h

ow e

nviro

nmen

tal a

war

enes

s is w

oven

into

eve

ry a

spec

ts o

f the

life

cyc

le o

f pro

duct

s: F

rom

the

way

raw

mat

eria

ls a

re u

sed,

how

pro

duct

s ar

e cr

eate

d, so

ld, a

nd c

ared

for b

y en

d-us

ers

Fash

ion

indu

stry

!79

8 Se

ay (2

015)

Su

stai

nabl

e bu

sine

ss

mod

el a

nd c

reat

ion

of

valu

e

Con

cept

ual

fram

ewor

k

Expl

ains

the

impo

rtanc

e of

dev

elop

ing

som

e fr

amew

ork

for a

sses

sing

how

sust

aina

bilit

y in

itiat

ives

dire

ctly

or i

ndire

ctly

impa

ct p

erfo

rman

ce

Prov

ides

inpu

t tow

ards

such

a fr

amew

ork

and

dem

onst

rate

s how

the

inte

grat

ion

of su

stai

nabi

lity

into

bus

ines

s pro

cess

es a

nd p

rodu

cts c

reat

es v

alue

fo

r all

of a

com

pany

’s st

akeh

olde

rs

Com

pany

9 St

rohh

ecke

r (20

12) I

mpl

emen

tatio

n of

su

stai

nabl

e bu

sine

ss

stra

tegi

es

Expe

rimen

t D

escr

ibes

how

ow

ners

and

man

ager

s stri

ve fo

r a su

stai

nabl

e bu

sine

ss m

odel

, but

par

ticip

ants

stru

ggle

with

succ

essf

ully

impl

emen

ting

sust

aina

ble

busi

ness

stra

tegi

es

10

Eppl

er, H

offm

an &

B

resc

iani

(201

1)

Bus

ines

s mod

els

thro

ugh

colla

bora

tive

idea

gen

erat

ion

Expe

rimen

t Pr

opos

es a

mod

el th

at a

ims t

o ex

plai

n ho

w a

rtefa

cts c

an a

ffec

t the

team

pro

cess

es in

dev

elop

ing

new

bus

ines

s mod

el id

eas,

posi

ting

that

they

hav

e an

im

pact

on

crea

tivity

and

col

labo

ratio

n

11

Seel

os &

Mai

r (2

005)

So

cial

en

trepr

eneu

rshi

p an

d bu

sine

ss m

odel

Con

cept

ual

Off

ers i

nsig

hts t

hat m

ay st

imul

ate

idea

s for

mor

e so

cial

ly a

ccep

tabl

e an

d su

stai

nabl

e bu

sine

ss st

rate

gies

and

org

aniz

atio

nal f

orm

s

12

Nira

j & N

ages

war

a (2

015)

Su

stai

nabi

lity

of E

-re

tail

Mul

tiple

-cas

e st

udy

B

usin

ess m

odel

s in

E-re

tail

in In

dia

lack

seve

ral a

spec

ts o

f sus

tain

abili

ty

Focu

s on

how

to in

crea

se p

rofit

abili

ty

The

pape

r mak

es a

cor

rela

tion

of e

mer

genc

e of

e-r

etai

l in

deve

lope

d ec

onom

ies l

ike

US,

UK

, alo

ng w

ith d

evel

opin

g ec

onom

ies l

ike

Bra

zil a

nd C

hina

E-re

tail

in In

dia,

U

S, U

K, B

razi

l an

d C

hina

13

H

emph

ill (2

013)

Su

stai

nabl

e bu

sine

ss

mod

els i

n fo

od

man

ufac

turin

g

Cas

e st

udy

Th

e cr

eativ

e ca

pita

lism

mod

el o

f sus

tain

abili

ty a

nd so

cial

env

ironm

enta

l res

pons

ibili

ty is

app

lied

to th

e fo

od m

anuf

actu

ring

indu

stry

’s e

ffor

ts

Food

m

anuf

actu

ring

indu

stry

14

Ed

vard

sson

&

Enqu

ist (

2011

) Se

rvic

e ex

celle

nce

and

inno

vatio

n m

odel

Sing

le-c

ase

stud

y D

evel

ops a

new

fram

ewor

k kn

own

as “

The

busi

ness

mod

el o

f ser

vice

exc

elle

nce

and

inno

vatio

n”, k

now

n as

the

serv

ice

exce

llenc

e an

d in

nova

tion

(SEI

B)

The

fram

ewor

k fo

cuse

s on

how

to c

reat

e an

d m

anag

e re

sour

ce c

onfig

urat

ions

that

ena

ble,

supp

ort,

and

dire

ct c

usto

mer

s in

valu

e co

-cre

atio

n an

d se

rvic

e ex

chan

ge

Elec

troni

c sh

oppi

ng a

nd

mai

l-ord

er h

ouse

s

15

Se

shad

ri (2

013)

Sh

ared

resp

onsi

bilit

y in

a tr

ans-

orga

niza

tiona

l bu

sine

ss m

odel

Con

cept

ual

Prop

oses

des

ign

for t

he su

stai

nabi

lity

synd

icat

e: S

hare

d re

spon

sibi

lity

amon

g di

vers

e st

akeh

olde

rs fo

r sus

tain

abili

ty; a

n ag

enda

for u

nify

ing

econ

omic

an

d et

hica

l rat

iona

les

16

Boc

ken

et a

l. (2

014)

Su

stai

nabl

e bu

sine

ss

mod

els a

rche

type

s C

once

ptua

l Ex

ampl

es o

f mec

hani

sms a

nd so

lutio

ns th

at c

an c

ontri

bute

to b

usin

ess m

odel

inno

vatio

n fo

r sus

tain

abili

ty

Sust

aina

ble

busi

ness

mod

el a

rche

type

s des

crib

e gr

oupi

ngs o

f mec

hani

sms a

nd so

lutio

ns

17

Hva

ss (2

015)

B

usin

ess m

odel

in

nova

tion

thro

ugh

seco

nd h

and

reta

iling

Sing

le-c

ase

stud

y In

vest

igat

es h

ow th

e re

sell

of a

fash

ion’

s bra

nd o

wn

prod

ucts

can

faci

litat

e bu

sine

ss m

odel

ada

ptio

n to

war

ds su

stai

nabi

lity

Seco

nd h

and

reta

il Fa

shio

n in

dust

ry

18

Kud

lak,

Sch

önhe

rr

& K

rum

ay (2

015)

C

ontin

genc

ies a

nd

trend

s inf

luen

cing

su

stai

nabl

e bu

sine

ss

mod

els

Mul

tiple

-cas

e st

udy

Off

ers i

nsig

hts a

nd o

rient

atio

n fo

r com

pani

es in

rega

rds t

o th

ose

envi

ronm

enta

l and

qua

lity

of jo

bs is

sues

whi

ch m

ay p

rovi

de o

ppor

tuni

ty fo

r cre

atin

g m

ore

sust

aina

ble

busi

ness

mod

els.

How

to d

iffer

entia

te a

bus

ines

s mod

el.

App

arel

/fash

ion

indu

stry

19

Boo

ns &

Lüd

eke-

Freu

nd (2

013

Bus

ines

s mod

els f

or

sust

aina

ble

inno

vatio

n

Lite

ratu

re re

view

R

evie

w th

e cu

rren

t lite

ratu

re o

n bu

sine

ss m

odel

s in

the

cont

exts

of t

echn

olog

ical

, org

aniz

atio

nal a

nd so

cial

inno

vatio

n. P

ropo

se e

xam

ples

of

norm

ativ

e re

quire

men

ts th

at b

usin

ess m

odel

s sho

uld

mee

t in

orde

r to

supp

ort s

usta

inab

le in

nova

tion.

Cor

pora

tions

20

Lüde

ke-F

reun

d (2

013)

B

usin

ess m

odel

s for

su

stai

nabi

lity

Con

cept

ual

fram

ewor

k D

evel

ops t

he b

usin

ess m

odel

s for

sust

aina

bilit

y fr

amew

ork

(BM

fSI)

. The

BM

fSI f

ram

ewor

k he

lps s

truct

urin

g th

e em

ergi

ng su

stai

nabl

e en

trepr

eneu

rshi

p re

sear

ch

Entre

pren

euria

l

21

Sore

scu,

Fra

mba

ch,

Sing

h,

Ran

gasw

amny

&

Brid

ges (

2011

)

Ret

ail B

usin

ess

Mod

el In

nova

tion

Con

cept

ual

Prop

oses

six

maj

or w

ays i

n w

hich

reta

ilers

can

inno

vate

thei

r bus

ines

s mod

els t

o en

hanc

e va

lue

crea

tion.

Des

crib

e th

e dr

iver

beh

ind

busi

ness

mod

el

inno

vatio

n

Ret

ail i

ndus

try

22

Scha

ltegg

er,

Lüde

ke-F

reun

d &

H

anse

n (2

012)

The

role

of b

usin

ess

mod

el in

nova

tion

for

CSR

Con

cept

ual

fram

ewor

k A

rgue

s tha

t bus

ines

s mod

el in

nova

tion

may

be

requ

ired

to su

ppor

t a sy

stem

atic

, ong

oing

cre

atio

n of

bus

ines

s cas

es fo

r sus

tain

abili

ty. P

ropo

ses a

fr

amew

ork

for b

usin

ess m

odel

inno

vatio

n as

stra

tegi

cally

inte

grat

ed e

lem

ent o

f bus

ines

s act

iviti

es

23

Lüde

ke-F

reun

d (2

013)

Th

e so

lar b

usin

ess

case

and

mod

el

Cas

e st

udy

Show

s how

a “

sola

r bus

ines

s cas

e” is

real

ized

and

how

Brit

ish

Petro

leum

real

ized

it a

nd h

ow th

ey tr

ied

to k

eep

it go

ing.

Rec

onst

ruct

s the

stra

tegi

c dr

iver

s and

bus

ines

s mod

el in

nova

tions

So

lar E

nerg

y B

ritis

h Pe

trole

um

(BP)

24

H

anse

n, L

üdek

e-Fr

eund

, Qua

n &

W

est (

2013

)

Tech

nolo

gy p

ush

and

dem

and

pull

Mul

tiple

cas

e st

udy

Exam

ines

a p

robl

em lo

cate

d in

con

tem

pora

ry in

nova

tion

polic

y th

at c

halle

nges

prio

r mod

els f

or la

rge

scal

e in

nova

tion

Dev

elop

s a

typo

logy

of

tech

nolo

gy p

ush

and

dem

and

pull

polic

y de

sign

prin

cipl

es fo

r ren

ewab

le e

nerg

y ad

optio

n.

Sola

r Ene

rgy

and

polic

y

!80

25

Lüde

ke-F

reun

d &

Lo

ock

(201

1)

Trac

king

dow

n a

bias

in

fina

ncin

g ph

otov

olta

ic p

roje

cts

Mul

tiple

cas

e st

udy

Find

s a b

ias,

whi

ch th

ey c

all “

debt

for b

rand

s”. R

evea

ls th

at d

ebt i

nves

tors

pre

fer p

roje

cts w

ith p

rem

ium

bra

nd te

chno

logy

to lo

w-c

ost t

echn

olog

y.

Find

ings

show

that

if p

rem

ium

bra

nds w

ere

enga

ged,

lend

ers w

ould

als

o ch

oose

pro

ject

s with

hig

her r

isk.

Ren

ewab

le

Ener

gy

26

Bla

ga (2

013)

R

ethi

nkin

g B

usin

ess

Sust

aina

bilit

y C

once

ptua

l Th

e pa

per a

nsw

er w

hat s

usta

inab

ility

is, w

hat i

t mea

ns to

be

a su

stai

nabl

e bu

sine

ss, a

nd h

ow to

dev

elop

sust

aina

ble

busi

ness

mod

els.

The

pape

r trie

s to

cap

ture

the

sust

aina

bilit

y “b

ig p

ictu

re”

27

Boo

ns, M

onta

lvo,

Q

uist

& W

agne

r (2

013)

Sust

aina

ble

Inno

vatio

n, b

usin

ess

mod

els a

nd e

cono

mic

pe

rfor

man

ce

Lite

ratu

re re

view

A

rgue

s tha

t sus

tain

able

dev

elop

men

t req

uire

s rad

ical

and

syst

emat

ic in

nova

tions

, by

usin

g bu

sine

ss m

odel

s as a

tool

. Thi

s pap

er is

a p

art o

f a la

rger

sa

mpl

e th

at p

rese

nts n

ew re

sear

ch a

gend

as in

the

field

of b

usin

ess m

odel

man

agem

ent.

Giv

es in

sigh

t int

o th

e co

ncep

t or u

nder

stan

ding

and

adv

anci

ng

sust

aina

ble

inno

vatio

n

28

Hey

es (2

014)

Th

e fu

ture

of a

irpor

t re

tail

in a

car

bon

cons

train

ed w

orld

Con

cept

ual

Exam

ines

the

pres

sure

on

airp

ort r

etai

l in

a ca

rbon

-con

stra

ined

wor

ld, a

nd p

uts f

orw

ard

a re

sear

ch a

gend

a. C

halle

nges

will

giv

e ris

e fo

r new

ch

alle

nges

, cau

sing

sect

ors o

r ind

ivid

ual o

rgan

izat

ions

that

are

una

ble

to a

dapt

to d

eclin

e or

dis

appe

ar. T

he g

row

ing

envi

ronm

enta

l con

cern

s may

fo

rce

reta

ilers

to c

onsi

der n

ew w

ays o

f doi

ng b

usin

ess t

hat w

ill e

nabl

e th

em to

rem

ain

prof

itabl

e in

a c

arbo

n co

nstra

ined

wor

ld.

Airp

ort r

etai

l

29

Stub

bs &

Coc

klin

(2

008)

C

once

ptua

lizin

g a

“Sus

tain

abili

ty

Bus

ines

s Mod

el”

Mul

tiple

-cas

e st

udy

A S

BM

is h

ere

a m

odel

whe

re su

stai

nabi

lity

conc

epts

shap

e th

e dr

ivin

g fo

rce

of th

e fir

m a

nd it

s dec

isio

n m

akin

g. T

hey

reve

al th

at o

rgan

izat

ions

ad

optin

g a

SBM

mus

t dev

elop

inte

rnal

stru

ctur

al a

nd c

ultu

ral c

apab

ilitie

s to

achi

eve

firm

-leve

l sus

tain

abili

ty a

nd c

olla

bora

te w

ith k

ey st

akeh

olde

rs to

ac

hiev

e su

stai

nabi

lity

for t

he sy

stem

that

an

orga

niza

tion

is p

art o

f.

Ban

king

30

Gar

vare

&

Isak

sson

(200

1)

Sust

aina

ble

Dev

elop

men

t: Ex

tend

ing

the

scop

e of

bus

ines

s mod

els

Con

cept

ual

The

pape

r pre

sent

s an

exam

ple

of h

ow to

inte

grat

e th

e va

lues

of s

usta

inab

le d

evel

opm

ent i

n a

“bus

ines

s exc

elle

nce

mod

el”.

Exi

stin

g m

etho

ds a

nd

stra

tegi

es fo

r qua

lity

and

busi

ness

exc

elle

nce

are

com

pare

d w

ith d

efin

ition

s of s

usta

inab

le d

evel

opm

ent.

A fr

amew

ork

of su

stai

nabl

e de

velo

pmen

t in

a bu

sine

ss c

onte

xt in

pre

sent

ed

31

Loor

bach

&

Wijs

man

(201

3)

Bus

ines

s tra

nsiti

on

man

agem

ent

Cas

e St

udy

Expl

ores

the

co-e

volu

tion

betw

een

soci

etal

sust

aina

bilit

y tra

nsiti

ons a

nd fu

ndam

enta

l shi

fts w

ithin

indi

vidu

al b

usin

esse

s. A

rgue

that

ther

e is

an

emer

gent

tren

d to

mov

e be

yond

opt

imiz

ing

the

orga

niza

tion’

s ind

ivid

ual p

erfo

rman

ce. T

he fr

ontru

nner

bus

ines

s tha

t orie

nt th

emse

lves

tow

ards

su

stai

nabl

e m

arke

t tra

nsiti

ons d

evel

op a

com

petit

ive

adva

ntag

e, a

nd in

the

shor

t ter

m g

ain

rene

wed

am

bitio

n an

d en

thus

iasm

. Del

iver

s a tr

ansi

tion

fram

ewor

k

The

Dut

ch ro

of

sect

or

32

K

eijz

ers (

2002

) Th

e tra

nsiti

on to

the

sust

aina

ble

ente

rpris

e C

once

ptua

l D

escr

ibes

that

priv

ate

ente

rpris

es e

ngag

es in

a sh

ift fr

om e

nviro

nmen

tally

frie

ndly

met

hods

tow

ards

sust

aina

ble

entre

pren

eurs

hip.

Exp

lain

s how

the

corp

orat

e go

vern

ance

cha

nges

. Arg

ues t

hat t

he p

rese

rvat

ion

of n

on-r

epro

duci

ble

“key

stoc

ks”

of e

nerg

y, b

iodi

vers

ity, a

nd sp

ace

requ

ires n

ew a

nd

spec

ial a

ttent

ion

in th

e st

rate

gic

man

agem

ent o

f the

sust

aina

ble

ente

rpris

e

Gov

ernm

ent a

nd

ente

rpris

es

33

Giro

tra &

N

etes

sine

(201

3)

Bus

ines

s Mod

el

Inno

vatio

n fo

r Su

stai

nabi

lity

Con

cept

ual

Prov

ides

a b

rief s

umm

ary

of a

con

cept

ual f

ram

ewor

k to

iden

tify

new

bus

ines

s mod

els.

Arg

ues t

hat t

hey

key

to id

entif

ying

new

bus

ines

s mod

els i

s un

ders

tand

ing

the

cont

ext o

f dec

isio

n m

akin

g in

exi

stin

g m

odel

s and

the

asso

ciat

ed in

effic

ienc

ies.

They

adv

ise

a fr

amew

ork

for c

once

ptua

lizin

g su

stai

nabl

e bu

sine

ss m

odel

s, th

e ge

nera

ted

busi

ness

mod

els s

houl

d be

ana

lyze

d in

ord

er to

iden

tify

the

mos

t pro

mis

ing

one.

34

Hen

rikse

n, B

jerr

e,

Øst

er &

Bis

gaar

d (2

012)

Gre

en B

usin

ess

Mod

el In

nova

tion

Polic

y R

epor

t A

rgue

s tha

t pol

icy

mak

ers n

eed

to c

onsi

der w

heth

er th

eir e

mer

genc

e an

d th

e re

late

d in

nova

tion

shou

ld b

e le

ft to

the

mar

ket o

r whe

ther

pol

icie

s are

ne

eded

to su

ppor

t it.

Focu

ses o

n id

entif

ying

pol

icy

initi

ativ

es th

at c

ontri

bute

to p

rom

otin

g th

e us

e of

gre

en b

usin

ess m

odel

inno

vatio

n an

d th

e di

rect

ef

fect

s tha

t pol

icy

has o

n en

ablin

g co

mpa

nies

to im

plem

ent i

t.

Polit

ical

in

stitu

tions

35

Hen

rikse

n, B

jerr

e,

Bis

gaar

d, A

lam

si

& D

amga

ard

(201

2)

Gre

en B

usin

ess

Mod

el In

nova

tion

Cas

e st

udie

s Pr

ovid

es fa

ct b

ased

kno

wle

dge

in re

latio

n to

Gre

en B

usin

ess M

odel

Inno

vatio

n an

d su

ms u

p th

e ke

y le

arni

ng p

oint

s fro

m a

bus

ines

s cas

e st

udy,

a

liter

atur

e re

view

on

econ

omic

and

env

ironm

enta

l eff

ects

and

an

impa

ct a

sses

smen

t of a

surv

ey

Com

pani

es

36

Dic

kson

& C

hang

(2

015)

B

usin

ess c

ase

for

sust

aina

bilit

y M

ultip

le-c

ase

stud

y D

escr

ibes

the

CSR

wor

k be

ing

carr

ied

out i

n su

pply

cha

ins

App

arel

indu

stry

37

Mor

gan

(201

5)

Bus

ines

s mod

el

inno

vatio

n fo

r su

stai

nabl

e co

nsum

ptio

n

Sing

le-c

ase

stud

y Se

vera

l ini

tiativ

es fo

r bus

ines

s mod

el in

nova

tion

are

built

on

sour

ces f

or c

ompe

titiv

e ad

vant

age

Find

ings

sugg

est t

hat,

whi

le le

adin

g fir

ms m

ay b

e ca

pabl

e of

cre

atin

g ne

w su

stai

nabl

e bu

sine

ss m

odel

s, se

ctor

-leve

l sus

tain

able

con

sum

ptio

n

Ret

ail i

ndus

try

38

Mol

dere

z &

Els

t (2

015)

B

arrie

rs t

owar

ds a

ch

ange

in th

e cl

othi

ng in

dust

ry

Mul

tiple

-cas

e st

udy

Dis

cuss

the

influ

ence

of s

mal

l, su

stai

nabl

e st

art-u

ps o

n m

arke

t inc

umbe

nts.

The

focu

s is o

n th

e ac

t of i

nflu

enci

ng in

the

fash

ion

indu

stry

Fa

shio

n in

dust

ry

39

Scha

ltegg

er,

Han

sen

& L

üdek

e-Fr

eund

(201

5)

Bus

ines

s mod

els f

or

sust

aina

bilit

y:

Orig

ins,

Pres

ent

Res

earc

h an

d Fu

ture

A

venu

es

Lite

ratu

re re

view

Arg

ues t

hat t

he c

ompo

nent

of c

orpo

rate

sust

aina

bilit

y ha

s onl

y re

cent

ly m

oved

into

the

focu

s of s

usta

inab

ility

man

agem

ent r

esea

rch.

The

usu

al

appr

oach

es a

re in

suff

icie

nt to

cre

ate

the

nece

ssar

y ra

dica

l tra

nsfo

rmat

ion.

Mor

e in

-dep

th re

sear

ch is

nee

ded

Cor

pora

tion

40

Tolli

n &

Jesp

er

(201

2)

Sust

aina

bilit

y in

bu

sine

ss:

Con

cept

ual

A ty

polo

gy o

f sus

tain

abili

ty st

rate

gies

is p

rese

nted

as w

ell a

s a c

once

ptua

l fra

mew

ork

rela

ting

sust

aina

bilit

y at

the

com

pany

leve

l to

the

func

tiona

l le

vel o

f mar

ketin

g.

!81

unde

rsta

ndin

g m

eani

ngs,

trigg

ers

and

enab

lers

41

Pe

ders

en &

A

nder

sen

(201

5)

Sust

aina

bilit

y in

nova

tors

and

an

chor

dra

gger

s: a

gl

obal

exp

erty

stud

y on

sust

aina

ble

fash

ion

Mul

tiple

-cas

e st

udy

Expl

ores

cur

rent

bar

riers

and

opp

ortu

nitie

s for

sust

aina

bilit

y in

the

fash

ion

indu

stry

. Ind

icat

es th

at th

e fa

shio

n in

dust

ry fa

ces i

mm

ense

soci

al a

nd

envi

ronm

enta

l cha

lleng

es a

nd th

at th

e sc

ale

and

scop

e of

cur

rent

app

roac

hes s

o su

stai

nabi

lity

are

limite

d

Clo

thin

g an

d fa

shio

n in

dust

ry

42

Boc

ken

(201

5)

Sust

aina

ble

vent

ure

capi

tal

Con

cept

ual

Arg

ues t

hat v

entu

re c

apita

l inv

estm

ents

has

a k

ey ro

le to

pla

y in

the

deve

lopm

ent o

f sus

tain

able

star

t-ups

. Pro

vide

s ins

ight

s int

o ho

w v

entu

re

capi

talis

ts c

an c

ontri

bute

to su

stai

nabl

e bu

sine

ss su

cces

s V

entu

re /

star

t-ups

App

endi

x 2:

Onl

ine

Res

earc

h Se

cond

ary

data

from

reta

il co

mpa

nies

: Ana

lyzi

ng re

taile

rs’ r

espo

nsib

le b

usin

ess m

odel

s

Exa

mpl

e C

ompa

ny: N

ike

Exam

ple

of h

ow re

spon

sibl

e bu

sine

ss p

ract

ices

whe

re a

naly

zed

acco

rdin

g to

env

ironm

enta

l and

soci

etal

dim

ensi

on, a

nd th

e fo

ur p

illar

s of t

he b

usin

ess m

odel

. Thi

s was

don

e fo

r all

72 re

taile

rs,

how

ever

, due

to e

xces

sive

pag

e us

age,

we

chos

e to

sum

mar

ize

our f

indi

ngs

by th

e si

x re

spon

sibl

e bu

sine

ss m

odel

s, pr

ovid

ed in

the

next

tabl

e (O

verv

iew

of a

naly

zed

reta

ilers

). H

ere,

we

show

an

exa

mpl

e of

how

Nik

e’s r

espo

nsib

le b

usin

ess p

ract

ices

wer

e an

alyz

ed.

NIK

E

EN

VIR

ON

ME

NT

AL

SO

CIE

TA

L

VA

LU

E

PRO

POSI

TIO

N

Sust

aina

ble

inno

vatio

n:

Usi

ng

envi

ronm

enta

l ne

w

prod

uct

deve

lopm

ent

(EN

PD) i

n a

larg

e sc

ale.

2

mill

ion

wat

er b

ottle

s rec

ycle

d in

to n

ew c

loth

ing.

86

% o

f pro

duct

s con

tain

at l

east

5 %

org

anic

cot

ton.

Focu

s on

sol

ving

soc

ieta

l pro

blem

s. E.

g. c

hild

hood

obe

sity

, the

com

pany

has

ass

embl

ed a

n Ac

cess

to S

port

team

in o

rder

to a

ddre

ss

this

issu

e.

Star

ted

a ne

w o

rgan

izat

ion

calle

d D

esig

ned

to M

ove

with

70

othe

r ex

pert

orga

niza

tions

. The

fra

mew

ork

was

co-

auth

ored

by

the

Amer

ican

Col

lege

of S

port

s Med

icin

e, th

e In

tern

atio

nal C

ounc

il of

Spo

rt S

cien

ce, P

hysi

cal E

duca

tion

and

Nik

e.

Figh

ting

for e

qual

gen

der r

ight

s, Th

e G

irl E

ffect

. Nik

e is

an

activ

e co

mm

unic

ator

of t

his

mes

sage

, and

spo

nsor

of m

any

orga

niza

tions

th

at a

ctiv

ely

wor

k w

ith th

is is

sue

TH

E

CU

STO

ME

R

Act

ive

com

mun

icat

ion

abou

t wha

t the

y ar

e do

ing

(edu

catin

g th

e cu

stom

er)

Cus

tom

ers c

an g

ive

Nik

e fe

edba

ck o

n ho

w g

ood

Nik

e’s i

nfor

mat

ion

are

Cre

ates

act

ive

dial

ogue

with

the

cust

omer

Nik

e’s m

otiv

atio

n is

if y

ou h

ave

a bo

dy, y

ou’r

e an

ath

lete

En

cour

agin

g th

e w

hole

soci

ety

to b

e m

ore

activ

e N

ike

supp

orts

new

ent

repr

eneu

rs w

ith tr

aini

ng p

rogr

ams

Run

ning

app

licat

ion.

La

rges

t spo

nsor

of t

he a

nnua

l NY

C m

arat

hon.

Im

prov

e w

omen

’s p

lace

in sp

orts

. V

AL

UE

DE

LIV

ER

Y

Mat

eria

l us

e is

Nik

e’s

larg

est

impa

ct o

n th

e en

viro

nmen

t: A

re c

ontin

uous

ly

tack

ling

this

cha

lleng

e th

roug

h EN

PD.

Nik

e se

eks

to c

ut e

nerg

y us

e an

d gr

eenh

ouse

gas

em

issi

ons

thro

ugho

ut t

he

valu

e. c

hain

in o

rder

to re

duce

clim

ate

impa

cts a

nd e

nerg

y-re

late

d co

sts.

The

upst

ream

act

iviti

es in

the

valu

e ch

ain

are

cons

tant

ly u

nder

the

loop

for

in

nova

tive

new

met

hods

that

can

redu

ce th

e en

viro

nmen

tal f

ootp

rint.

Nik

e ac

tivel

y m

easu

res a

ny im

pact

on

the

envi

ronm

ent,

and

redu

ce th

em o

n an

an

nual

bas

is

Nik

e ha

s a

seve

ral f

acto

ries:

Ove

r 1 m

illio

n pe

ople

all

over

the

glob

e ar

e w

orki

ng fo

r the

m. N

ike

is a

ctiv

ely

tryin

g to

be

a pa

rt of

the

chan

ge: I

mpr

ove

labo

r con

ditio

ns.

Dire

ctin

g w

ork

tow

ards

fact

orie

s tha

t are

rate

d as

bro

nze

or o

ver:

Nik

e be

lieve

s tha

t a k

now

ledg

eabl

e w

orkf

orce

will

cre

ate

mor

e va

lue

– if

fact

orie

s fai

l to

achi

eve

this

leve

l the

y ge

t pen

altie

s or r

emov

ed fr

om th

e co

ntra

ct fa

ctor

y ba

se.

Bron

ze: F

ull c

ompl

ianc

e w

ith N

ike’

s Cod

e of

Con

duct

– S

ilver

and

Gol

d re

flect

an

addi

tiona

l com

mitm

ent t

o le

an m

anuf

actu

ring

and

prog

ress

ive

man

ufac

turin

g, a

nd o

ther

fact

ors r

elat

ed to

Hea

lth &

Saf

ety

and

Envi

ronm

enta

l Sus

tain

abili

ty.

Seve

ral p

artn

ersh

ips,

e.g.

figh

ting

aids

in c

oope

ratio

n w

ith C

onve

rse,

whi

ch w

ill le

vera

ge b

rand

pow

er.

VA

LU

E

CA

PTU

RE

Nik

e is

del

egat

ing

a co

nsid

erab

le a

mou

nt o

f re

sour

ces

into

EN

PD a

nd R

&D

w

hich

obv

ious

ly c

hang

es th

e co

st st

ruct

ures

C

an h

ave

an e

ffec

t on

the

botto

m li

ne a

s inc

reas

ed c

osts

N

ike

belie

ves t

his w

ill e

vent

ually

pay

off

in th

e lo

ng-r

un

Elim

inat

ing

inef

ficie

nt fa

ctor

ies c

an re

duce

cos

ts.

Soci

etal

pro

ject

s can

incr

ease

cos

ts.

Ben

efits

thro

ugh

leve

rage

d br

and

pow

er.

!82

Ove

rvie

w o

f ana

lyze

d re

taile

rs

The

tabl

e pr

ovid

es a

com

preh

ensi

ve s

umm

ary

of th

e an

alyz

ed re

taile

rs, a

nd s

how

s se

lect

ed re

spon

sibl

e bu

sine

ss p

ract

ices

am

ong

the

sam

ple

com

pani

es. F

urth

erm

ore,

the

tabl

e ill

ustra

tes

how

th

e si

x m

odel

s are

cat

egor

ized

thro

ugh

vario

us re

spon

sibl

e bu

sine

ss p

ract

ices

. In

gene

ral,

larg

e co

mpa

nies

fall

into

mul

tiple

cat

egor

ies,

whi

le sm

alle

r com

pani

es fa

ll in

to o

ne o

r tw

o ca

tego

ries.

C

ompa

ny

The

Re-

Inve

ntor

T

he G

reen

Ent

husi

ast

The

Tea

cher

T

he P

robl

em-S

olve

r T

he S

uppl

y C

hain

Man

ager

T

he T

eam

Pla

yer

1

Nik

e (K

nobl

auch

, 20

10; N

ike,

n.d

.-a;

n.d

.-b)

Envi

ronm

enta

l new

pr

oduc

t dev

elop

men

t (E

NPD

). U

se o

f rec

ycle

d pl

astic

bo

ttles

.

ENPD

. C

ut e

mis

sion

s. R

educ

e cl

imat

e im

pact

. In

nova

tive

met

hods

to re

duce

en

viro

nmen

tal f

ootp

rint.

Act

ive

dial

ogue

w/c

usto

mer

s. R

unni

ng a

pplic

atio

n.

Chi

ld o

besi

ty.

Figh

ting

for e

qual

gen

der r

ight

s. M

ake

the

soci

ety

mor

e ac

tive.

Impr

ove

labo

r con

ditio

ns.

Cod

e of

con

duct

. H

ealth

& S

afet

y &

En

viro

nmen

tal s

usta

inab

ility

. D

irect

ing

wor

k to

war

ds

fact

orie

s tha

t are

rate

d as

«b

ronz

e» o

r ove

r.

Coo

pera

tion

w/th

e A

mer

ican

Col

lege

of

Spor

t Sci

ence

. Fi

ght a

ids i

n co

llabo

ratio

n w

/Con

vers

e (le

vera

ging

bra

nd

pow

er.

2 Z

ara

(Zar

a, n

.d.)

O

rgan

ic c

otto

n +

eco-

frie

ndly

mat

eria

ls.

Rec

yclin

g w

aste

. R

educ

e em

issi

ons.

Labe

lling

sust

aina

ble

clot

hes f

or

cust

omer

s. In

form

atio

n +

train

ing

cam

paig

ns

for e

mpl

oyee

s.

Ani

mal

wel

fare

pol

icy.

3 M

arks

&

Spen

cer

(M&

S, n

.d.)

ENPD

. Sh

wop

ping

. Su

stai

nabl

e co

tton.

So

lar e

nerg

y.

Sust

aina

ble

fishi

ng.

ENPD

.

Fair

trade

. Fa

ir tra

de.

Incl

usiv

e re

crui

tmen

t. Fa

ir tra

de.

Loca

l com

mun

ity su

ppor

t in

supp

ly c

ount

ries.

Off

erin

g tra

inin

g of

lead

ersh

ip

skill

s.

Partn

ersh

ips w

/ e.g

.: W

WF,

UN

ICEF

4 L

evi S

trau

ss &

C

o (L

evi S

traus

s &

Co,

n.d

.)

ENPD

. EN

PD.

Min

imiz

e/el

imin

ate

haza

rdou

s ch

emic

als.

Goa

l: U

se 1

00 %

rene

wab

le e

nerg

y.

Ener

gy e

ffic

ienc

y.

Trac

king

dire

ct/in

dire

ct e

mis

sion

s.

Mes

sage

to c

onsu

mer

s. “A

car

e ta

g fo

r the

pla

net”

. “D

irty

jean

s man

ifest

o”.

Empl

oyee

com

mun

ity in

volv

emen

t. Im

prov

e liv

es o

f wor

kers

, em

pow

er w

ith th

e to

ols t

hey

need

to le

ad h

ealth

ier a

nd m

ore

prod

uctiv

e liv

es.

Tran

spar

ency

.

Wor

king

w/o

ther

br

ands

, e.g

. H&

M.

5 St

orm

berg

(S

torm

berg

, n.d

.-a;

n.d

.-b)

ENPD

. Ec

o-fr

iend

ly sh

oppi

ng b

ag.

ENPD

. A

void

tran

spor

tatio

n by

pla

in.

Emis

sion

quo

tas.

Ren

ewab

le e

nerg

y.

Blo

g fo

r com

mun

icat

ion

w/c

usto

mer

. Tr

ansp

aren

cy.

Ani

mal

wel

fare

pol

icy.

In

clus

ive

recr

uitm

ent.

1 %

of s

ales

is g

iven

to h

uman

itaria

n pr

ojec

ts.

Fact

ory

over

view

+ c

ontro

ls.

Publ

ic fa

ctor

y lis

t. Tr

ansp

aren

cy.

Partn

ersh

ips:

FFA

, U

N’s

Glo

bal

Com

pact

, Nav

, IEH

6 H

&M

(H

&M

, n.d

.-a;

n.d.

-b)

Clo

sing

the

loop

. EN

PD/C

losi

ng th

e lo

op.

Blo

g.

Prov

ide

fash

ion

for c

onsc

ious

cu

stom

ers.

Tr

ansp

aren

cy.

Fair

wag

es.

Con

tinuo

us im

prov

emen

t pr

ogra

ms.

Cod

e of

con

duct

.

Wat

erai

d pa

rtner

ship

s. C

olla

bora

tion

w/U

NIC

EF.

Partn

ersh

ips w

/oth

er

larg

e br

ands

. 7

IKE

A

(IK

EA, n

.d.-a

; n.

d.-b

)

G

reen

pro

duct

s (so

lar p

anel

s, LE

D).

Ren

ewab

le e

nerg

y.

Res

ourc

e +

ener

gy e

ffic

ienc

y.

“Sus

tain

able

life

at h

ome”

IWA

Y-s

tand

ards

. Pa

rtner

ship

s e.g

. w

/WW

F

8 L

’Occ

itain

e (L

’Occ

itain

e,

n.d.

)

ENPD

.

Ph

ilant

hrop

ical

ly c

omm

itmen

t. C

harit

able

don

atio

ns.

Supp

ortin

g pr

ojec

ts, h

elpi

ng v

isua

lly

impa

ired

pers

ons.

Incl

usiv

e re

crui

tmen

t.

!83

9 W

alm

art

(Kno

blau

ch,

2010

; Wal

mar

t, n.

d.)

Trad

e-pr

ogra

ms f

or

cust

omer

s. Su

stai

nabl

e fo

od.

ENPD

. Su

stai

nabi

lity

inde

x fo

r cu

stom

ers.

Off

erin

g cu

stom

ers c

hoic

es +

tra

nspa

renc

y in

to p

rodu

ct’s

or

igin

.

Incl

usiv

e re

crui

tmen

t. Tr

ansp

aren

t sup

ply

chai

n.

Empo

wer

ing

wom

en.

Supp

ort f

arm

ers a

nd

com

mun

ities

.

10

Stap

les

(Sta

ples

, n.d

.)

Ec

o-fr

iend

ly p

rodu

cts.

Res

ourc

e +

ener

gy e

ffic

ienc

y.

Alte

rnat

ive

ener

gy so

urce

s.

Enco

urag

ing

cust

omer

s w

/sus

tain

able

solu

tions

. In

clus

ive

recr

uitm

ent.

11

Nes

tlé/N

espr

esso

(N

estlé

N

espr

esso

, n.d

.-a;

n.d.

-b)

G

reen

er c

offe

e.

Cap

sule

recy

clin

g.

Car

bon

redu

ctio

n.

Man

agin

g w

ater

use

in fa

rmin

g.

Con

trol s

oil f

ertil

ity +

lim

iting

che

mic

al

inpu

t.

Mak

ing

cust

omer

s ack

now

ledg

e ow

n im

pact

.

Car

e pr

ogra

m.

Farm

ers a

re tr

aine

d to

be

mor

e en

viro

nmen

tally

+ so

cial

ly

resp

onsi

ble.

In

nova

tive

prog

ram

s.

Partn

ersh

ips.

The

Rai

nfor

est

Alli

ance

.

12

Adi

das

(Adi

das G

roup

, n.

d.)

Sust

aina

ble

inno

vatio

n.

ENPD

. Su

stai

nabl

e fo

otpr

int-

proj

ect

ENPD

. Ze

ro d

isch

arge

of h

azar

dous

che

mic

als.

Supp

ly c

hain

man

agem

ent.

W

orkp

lace

Sta

ndar

ds.

13

Hol

ala

Vin

tage

C

loth

ing

(Hol

ala

Vin

tage

C

loth

ing,

n.d

.)

Seco

nd-h

and/

vint

age.

R

euse

+ re

cycl

e.

Reu

se.

Rec

ycle

. C

ircul

ar e

cono

my.

14

Indi

tex

(Ind

itex,

n.d

.)

G

reen

stan

dard

s for

pro

duct

s.

Inve

st so

cial

ly to

con

nect

to

com

mun

ities

.

Ethi

cal v

alue

cha

in.

Trai

ning

of s

uppl

iers

. K

ey p

artn

ers.

E.g.

: U

N G

loba

l Com

pact

, B

ette

r Cot

ton

Initi

ativ

e, F

FA

15

Can

on

(Can

on, n

.d.;

2015

)

Clo

se th

e lo

op re

cycl

ing

proc

ess.

Te

am p

rom

otin

g en

viro

nmen

tal

conc

erns

. Ec

o-co

nsci

ous l

ogis

tics.

Hel

ping

cus

tom

ers a

chie

ve

sust

aina

bilit

y.

Dis

tribu

ting

info

rmat

ion

on e

co-

frie

ndly

pro

duct

s. Ed

ucat

ion

for e

mpl

oyee

s.

Con

tribu

ting

to lo

cal c

omm

uniti

es in

ne

ed.

Don

atin

g so

lar l

ight

s to

com

mun

ities

w

ithou

t ele

ctric

ity.

Incl

usiv

e re

crui

tmen

t.

Pa

rtner

ship

s w/lo

cal

NG

O’s

.

16

L’O

RÉ

AL

(L

’OR

ÉAL,

n.d

.)

R

educ

ing

pack

agin

g.

Ren

ewab

le e

nerg

y.

Bio

mas

s pla

nt.

In

clus

ive

recr

uitm

ent.

So

lidar

ity so

urci

ng.

Div

ersi

ty in

supp

ly c

hain

.

17

The

Bod

y Sh

op

(The

Bod

y Sh

op,

n.d.

)

En

ergy

eff

icie

ncy.

So

lar p

anel

s + L

ED-li

ghts

. V

ideo

-con

fere

nces

.

A

nim

al w

elfa

re.

18

MA

C

(Tse

, 201

3)

Enco

urag

ing

cons

umer

s to

was

te

less

. B

ack-

to-M

AC

-pro

gram

.

MA

C A

ids F

und

19

Bes

t Buy

(B

est B

uy, n

.d.-a

; n.

d.-b

; M

accl

eans

.ca,

20

14)

Reu

se, r

ecyc

le e

lect

roni

c de

vice

s W

aste

min

imiz

atio

n.

Empl

oyee

eng

agem

ent

(sus

tain

abili

ty sc

orec

ards

). Ed

ucat

ion

+ tra

inin

g.

Com

mun

ity-in

vest

men

ts p

rogr

ams

help

ing

yout

hs w

ith e

duca

tion.

Su

pplie

r aud

its.

CSR

-team

in su

pply

-cou

ntrie

s. C

ode

of c

ondu

ct.

Ris

k as

sess

men

t of s

uppl

iers

.

Mem

bers

of t

he

Elec

troni

c In

dust

ry

Citi

zens

hip

Coa

litio

n

20

Tar

get

(Tar

get,

n.d.

)

ENPD

. EN

PD.

Impr

ovin

g pa

ckag

ing.

Ef

ficie

nt tr

ansp

orta

tion.

M

easu

ring

impa

ct –

Hig

g In

dex.

Send

ing

mes

sage

s to

cust

omer

s on

clo

thin

g-la

bels

.

Pa

rtner

ship

s. Fo

undi

ng m

embe

r of

Sust

aina

ble

App

arel

C

oalit

ion

(SA

C).

!84

Sust

aina

ble

prod

uct i

ndex

. 21

G

AP

(GA

P, n

.d.)

So

lar e

nerg

y.

Rec

yclin

g +

com

post

ing.

Q

uant

ifyin

g en

viro

nmen

tal i

mpa

ct.

Pers

onal

adv

ance

men

t & c

aree

r en

hanc

emen

t pro

gram

for

wom

en.

Mon

itorin

g w

orki

ng c

ondi

tions

.

Foun

ding

mem

ber o

f SA

C.

Partn

ersh

ips f

or

safe

ty c

ondi

tions

. 22

K

ohl’s

(K

ohl’s

, n.d

.)

En

viro

nmen

tal r

equi

rem

ents

for

supp

liers

.

Pr

ovid

e tra

inin

g fo

r sup

plie

rs.

Soci

al c

ompl

ianc

e m

onito

ring

proc

ess w

/com

mitt

ee.

Partn

ersh

ips.

E.g.

: Alli

ance

for

Ban

glad

esh

wor

ker

safe

ty.

23

RE

I (K

nobl

auch

, 20

10; M

arre

, n.

d.; R

EI, 2

015)

W

aste

pol

icy.

M

easu

ring

impa

ct w

ith in

dexe

s. R

enew

able

ene

rgy.

El

ectri

city

eff

icie

ncy.

Inst

ruct

ions

for c

usto

mer

s “h

ow2r

ecyc

le”.

Com

mut

e be

nefit

s for

em

ploy

ees.

Incl

usiv

e re

crui

tmen

t. C

omm

unity

par

tner

ship

s.

Partn

ersh

ip a

nd

indu

stry

co

llabo

ratio

n. E

.g.:

SAC

24

Low

e’s

(Mar

re, n

.d.;

Low

e’s,

n.d.

-a;

n.d.

-b)

Su

stai

nabl

e pr

oduc

ts.

Effic

ient

tech

nolo

gies

. Ed

ucat

e +

enga

ge c

onsu

mer

s. En

able

con

sum

ers t

o m

anag

e en

ergy

con

sum

ptio

n.

Educ

ate

+ en

gage

em

ploy

ees,

e.g.

on

resp

onsi

ble

was

te

man

agem

ent.

Com

mun

ity p

roje

cts.

C

olla

bora

tive

sust

aina

ble

busi

ness

st

rate

gies

.

25

Pata

goni

a (K

nobl

auch

, 20

10; P

atag

onia

, n.

d.-a

; n.d

.-b;

Che

esem

an,

2013

a)

O

rgan

ic c

otto

n.

Fair

trade

. B

log

for c

usto

mer

s. In

form

atio

n ab

out p

rodu

cts’

or

igin

. En

cour

age

cons

umer

s to

reus

e in

stea

d of

buy

ing

new

.

Giv

es 1

% o

f sal

es to

supp

ort

orga

niza

tions

aro

und

the

wor

ld.

Mon

itorin

g fa

ctor

ies,

mill

s and

fa

rms.

C

ode

of c

ondu

ct.

Pre-

scre

en fa

ctor

ies b

efor

e pl

acin

g or

ders

. Pr

otec

ting

mig

rant

wor

kers

. Fa

ir tra

de.

Partn

ersh

ips.

E.g.

: Fai

r Lab

or

orga

niza

tion.

Bet

ter

Wor

k Pr

ogra

m.

26

Tim

berl

and

(Kno

blau

ch,

2010

; Ti

mbe

rland

, n.d

.)

ENPD

. U

sing

was

te to

mak

e ne

w

prod

ucts

.

ENPD

. G

reen

pro

duct

s (Ea

rthke

eper

col

lect

ion)

. G

reen

dis

tribu

tion

cent

er.

Gre

en in

dex.

Prov

ide

cons

umer

s with

vis

ibili

ty

into

the

foot

prin

t. G

ener

atin

g ou

tcom

e-or

ient

ed

dial

ogue

w/c

usto

mer

s. Su

rvey

s and

focu

s gro

ups.

Pa

rtner

ship

s with

supp

liers

that

sp

ecia

lizes

in in

nova

tive

fabr

ics.

Su

pplie

r sus

tain

abili

ty te

am to

en

sure

safe

wor

kpla

ce.

Partn

ersh

ips.

E.

g.: S

AC

27

Fret

ex

(Fre

tex,

n.d

.)

Seco

nd-h

and.

R

euse

+ re

cycl

e.

Rec

ycle

+ re

use.

Enco

urag

e cu

stom

ers t

o re

cycl

e ol

d pr

oduc

ts. F

acili

tate

recy

clin

g-st

atio

ns.

Incl

usiv

e re

crui

tmen

t.

Expo

rting

text

iles t

o ot

her c

ount

ries

in n

eed.

28

Kiw

i (K

iwi,

n.d.

)

Fa

cilit

atin

g re

cycl

ing

of e

lect

rical

pr

oduc

ts.

Enco

urag

ing

cust

omer

to th

row

le

ss fo

od (“

cust

omiz

ed b

read

”)

Supp

ortin

g pr

ojec

ts.

Partn

ersh

ips

w/U

NIC

EF, R

ed

Cro

ss.

29

Gild

an

(Gild

an, n

.d.;

Mac

clea

ns.c

a,

2014

)

Ec

o-fr

iend

ly m

ater

ials

. R

enew

able

ene

rgy.

W

aste

man

agem

ent.

“Tra

ck M

y T”

: Inc

reas

ing

cust

omer

s’ a

war

enes

s and

le

arni

ng a

bout

env

ironm

enta

l im

pact

. D

ialo

gue

w/s

take

hold

ers.

Trai

ning

+ d

evel

opm

ent o

f em

ploy

ees.

Don

atio

ns fo

cus o

n yo

uth

educ

atio

n an

d hu

man

itaria

n ai

d.

Hea

lth c

are

to a

ll w

orke

rs.

Hum

anita

rian

aid

in su

pplie

r co

untri

es.

Partn

ersh

ips.

SAC

.

30

KE

SKO

(K

ESK

O, n

.d-a

; n.

d.-b

)

99

% o

f was

te is

recy

cled

. Im

prov

e lo

gist

ic sy

stem

s to

thro

w le

ss.

Ener

gy e

ffic

ient

bui

ldin

gs a

nd so

lutio

ns.

Ener

gy e

xper

t: H

elp

cust

omer

s sa

ve e

nerg

y.

Rec

ruit

youn

g em

ploy

ees.

A

ctiv

ely

mon

itors

and

ant

icip

ates

so

cial

cha

nges

in c

oope

ratio

n w

ith

stak

ehol

ders

.

31

Var

nerG

rupp

en

(Var

nerG

rupp

en,

n.d.

)

R

educ

tion

of e

nviro

nmen

tal i

mpa

ct.

A

nim

al w

elfa

re.

Ethi

cal t

rade

+ re

spon

sibl

e va

lue

chai

n.

Rou

tines

for c

ontro

lling

fa

ctor

ies.

Partn

ersh

ip w

/IEH

.

!85

32

Gai

am

(Kno

blau

ch,

2010

)

R

enew

able

solu

tions

. Ec

o-fr

iend

ly m

ater

ials

. H

elp

cons

umer

s red

uce

envi

ronm

enta

l im

pact

.

Pa

rtner

ship

w

/Con

serv

atio

n Fu

nd

to la

unch

“su

stai

nabl

e sh

ippi

ng”

33

Am

eric

an

App

arel

(K

nobl

auch

, 20

10)

R

ecyc

ling.

En

ergy

eff

icie

ncy.

So

lar p

anel

s.

Mor

e su

stai

nabl

e w

orkf

orce

: En

cour

age

empl

oyee

s to

choo

se

eco-

frie

ndly

tran

spor

tatio

n.

Mor

e su

stai

nabl

e w

orkf

orce

Partn

ersh

ips.

34

NA

U

(Kno

blau

ch,

2010

)

Su

stai

nabl

e an

d du

rabl

e fa

bric

s.

Cut

em

issi

ons.

R

ecyc

ling.

Enco

urag

e em

ploy

ees t

o us

e pu

blic

tran

sit.

2

% o

f eve

ry sa

le is

don

ated

to

hum

anita

rian

and

envi

ronm

enta

l gr

oups

.

Pa

rtner

s for

cha

nge.

35

LU

SH

(Kno

blau

ch,

2010

)

R

educ

ing

pack

agin

g.

Rec

ycle

d m

ater

ials

.

Supp

ortin

g an

imal

righ

t +

hum

anita

rian

conc

erns

.

36

The

Gre

en

Dep

ot

(Kno

blau

ch,

2010

; Gre

en

Dep

ot, n

.d.)

G

reen

, sus

tain

able

, pro

duct

s.

37

John

son

&

John

son

(RIL

A, 2

015)

R

enew

able

ene

rgy.

38

Coc

a C

ola

(RIL

A, 2

015)

C

limat

e pl

edge

. R

educ

e en

viro

nmen

tal f

ootp

rint.

Fo

unde

r of s

ever

al

plat

form

s for

in

crea

sing

reta

il su

stai

nabi

lity.

39

A

PPL

E

(App

le, n

.d.-a

; n.

d.-b

; RIL

A,

2015

)

EN

PD.

Ren

ewab

le e

nerg

y.

Prog

ram

s to

educ

ate

and

empo

wer

wor

kers

.

Su

pply

cha

in m

anag

emen

t.

Supp

lier E

mpl

oyee

Edu

catio

n D

evel

opm

ent p

rogr

am.

Cod

e of

con

duct

. Su

pplie

rs m

ust d

emon

stra

te

com

mitm

ent.

40

VIT

A

(Vita

, n.d

.)

Ethi

cal t

rade

. Im

prov

e in

itiat

ive

for b

ette

r w

ork

and

envi

ronm

enta

l ci

rcum

stan

ces i

n th

eir v

alue

ch

ain.

IEH

.

41

Junt

os S

hoes

(T

aylo

r, 20

15)

O

ne-f

or-o

ne m

odel

: For

eac

h pa

ir of

sh

oe so

ld, a

supp

ly-f

illed

bac

kpac

k is

do

nate

d to

a c

hild

in n

eed.

42

Out

of A

fric

a (T

aylo

r, 20

15)

Im

prov

e qu

ality

of l

ife fo

r Wes

t A

fric

an w

omen

and

chi

ldre

n.

43

TO

MS

(TO

MS,

n.d

.)

Su

stai

nabl

e so

urce

d co

ffee

bea

ns.

O

ne-f

or-o

ne m

odel

. Pr

oduc

t dev

elop

men

t sta

rts w

ith

iden

tifyi

ng a

glo

bal n

eed.

Pr

oduc

tion

coun

tries

are

cho

sen

acco

rdin

g to

a so

ciet

al c

halle

nge:

Pr

ovid

e w

ork

and

econ

omic

val

ue.

Prod

uctio

n co

untri

es a

re c

hose

n ac

cord

ing

to a

soci

etal

ch

alle

nge:

Pro

vide

wor

k an

d ec

onom

ic v

alue

.

!86

Don

ates

to v

ario

us o

rgan

izat

ions

. 44

T

will

ory

(Tay

lor,

2015

)

R

E:Pu

rpos

e pr

ogra

m: G

ettin

g pe

ople

ba

ck to

wor

k.

Pa

rtner

ship

w/C

aree

r G

ear.

45

Lob

law

(M

accl

eans

.ca,

20

14)

R

educ

e nu

mbe

r of p

last

ic sh

oppi

ng

bags

. R

educ

e nu

mbe

r of p

last

ic

shop

ping

bag

s in

colla

bora

tion

w/c

usto

mer

s.

Pr

otec

t sup

plie

rs.

46

Can

adia

n T

ire

Cor

p.

(Mac

clea

ns.c

a,

2014

)

So

lar p

anel

s.

Ren

ewab

le e

nerg

y.

Rec

ycle

was

te.

47

Ron

a In

c.

(Mac

clea

ns.c

a,

2014

)

ENPD

. Ec

o-lin

e of

pro

duct

s.

M

embe

r of B

orea

l B

usin

ess F

orum

.

48

Imag

e O

utfit

ters

(M

accl

eans

.ca,

20

14)

iS

hare

: 10

% o

f the

tota

l sal

e am

ount

fo

r new

cus

tom

er o

rder

s is d

onat

ed

to th

e ch

ariti

es o

f the

cus

tom

er’s

ch

oice

. D

onat

ions

to lo

cal c

harit

ies.

49

Rai

nbow

Lig

ht

(Tay

lor,

2015

)

R

ecyc

led

pack

agin

g.

Com

mitt

ed to

impr

ove

the

heal

th

of c

usto

mer

s.

Com

mitt

ed to

impr

ove

the

heal

th o

f cu

stom

ers,

trade

par

tner

s, gl

obal

co

mm

unity

and

the

plan

et.

Figh

t glo

bal m

alnu

tritio

n.

C

ircle

of C

are

Initi

ativ

e.

50

Alte

red

Seas

ons

(Tay

lor,

2015

)

O

ne-f

or-o

ne m

odel

: For

eve

ry c

andl

e so

ld, a

mea

l is p

rovi

ded

to a

per

son

in n

eed.

C

olla

bora

tion

with

Fe

edin

g A

mer

ica.

51

Chi

ldre

n In

spir

e D

esig

n (T

aylo

r, 20

15)

ENPD

. R

ecyc

led

+ ec

o-fr

iend

ly m

ater

ials

and

pa

ckag

ing.

52

Col

e an

d Pa

rker

(T

aylo

r, 20

15)

Fr

om e

very

sock

sale

smal

l loa

ns fo

r en

trepr

eneu

rs in

dev

elop

ing

coun

tries

are

pro

vide

d.

Pa

rtner

ship

w

/mic

rofin

ance

or

gani

zatio

n.

53

Gift

of

Hap

pine

ss

(Tay

lor,

2015

)

Prog

ress

bar

: Cus

tom

ers c

an

chec

k to

see

how

muc

h cl

oser

th

eir f

avor

ite c

ause

s are

to re

ach

thei

r fun

ding

goa

ls.

5 %

of e

very

pur

chas

e is

list

ed to

ch

arity

of t

he c

usto

mer

’s c

hoic

e.

54

Hea

dban

ds o

f H

ope

(Tay

lor,

2015

)

D

onat

es a

dol

lar o

f eac

h sa

le to

ch

ildho

od c

ance

r res

earc

h

55

Osm

ium

(S

iege

l, 20

14)

Ec

o-fa

shio

n.

ENPD

.

56

DE

LL

(C

hees

eman

, 20

13b)

Su

stai

nabl

e pa

ckag

ing.

W

aste

-fre

e pa

ckag

ing.

57

Kro

ger

Co.

C

onve

rts fo

od in

to e

nerg

y.

Res

ourc

e +

ener

gy e

ffic

ienc

y.

!87

(Che

esem

an,

2013

b)

58

Cos

tco

(Cos

tco,

n.d

.)

Focu

s on

fair

livin

g w

ages

for

supp

liers

abo

ve a

vera

ge le

vel

59

Safe

way

(V

ijaya

ragh

avan

, 20

12)

60

Abe

rcro

mbi

e &

Fi

tch

(Abe

rcro

mbi

e &

Fi

tch,

n.d

.)

R

educ

e us

e of

: Wat

er, c

arbo

n, e

nerg

y,

pollu

tion.

R

euse

and

recy

cle.

In

clus

ive

recr

uitm

ent.

61

DIO

R

(DIO

R, 2

012)

Soci

al d

ialo

gue

w/c

usto

mer

s.

In

itiat

ives

on:

Hum

an ri

ghts

, w

orki

ng c

ondi

tions

on

heal

th &

sa

fety

, non

-dis

crim

inat

ion

polic

y, sk

ills d

evel

opm

ent,

rela

tions

with

third

par

ties.

Rel

atio

ns w

ith th

ird

parti

es re

late

d to

su

pply

cha

in

initi

ativ

es.

62

Sain

sbur

y (G

ettle

r, 20

15)

Su

stai

nabl

e fo

od.

Res

pons

ibly

cau

ght t

una.

63

Zap

pos

(Get

tler,

201

5)

G

reen

tech

nolo

gy a

t hea

dqua

rter.

W

aste

man

agem

ent p

lan.

64

Roc

ksB

ox

(Roc

ksbo

x, n

.d.)

C

olla

bora

tive

cons

umpt

ion:

Allo

ws

subs

crib

ers t

o ac

cess

a “

pers

onal

ized

ro

tatin

g cl

oset

” se

nt in

sets

of t

hree

at a

tim

e

65

Farm

ers m

arke

t (G

ettle

r, 20

15)

Su

stai

nabl

e ag

ricul

ture

. Pr

omot

e so

cial

and

edu

catio

nal

way

to sh

op.

Impr

ove

nutri

tion.

66

Tes

co

(Fel

sted

, 201

2)

En

ergy

eff

icie

ncy.

R

educ

e ca

rbon

em

issi

on.

Sola

r pan

els.

67

Kin

gfis

her

(Fel

sted

, 201

2)

G

eoth

erm

al e

nerg

y.

Eco-

stor

es.

68

Lot

te S

hopp

ing

(RSA

Gro

up,

2012

)

Pa

rtner

ship

s.

69

Mac

y’s I

nc.

(Mac

y’s I

nc.,

n.d.

)

Ec

o-fr

iend

ly p

acka

ging

. R

educ

e en

ergy

use

. So

lar s

yste

ms.

Su

stai

nabl

e bu

ildin

g m

ater

ials

.

Enco

urag

es c

usto

mer

s to

choo

se

gree

n al

tern

ativ

es.

Soci

al p

roje

cts:

Mac

y’s P

ath

to

Peac

e, M

acy’

s Hea

rt of

Hai

ti.

Pa

rtner

ship

s. E.

g.: R

ecyc

leba

ck

70

Lin

dex

(Lin

dex,

n.d

.)

O

wn

bran

d: S

usta

inab

le c

hoic

e.

Sust

aina

ble

mat

eria

ls.

Ow

n te

ams i

n su

pply

cou

ntrie

s.

Partn

ersh

ips.

E.g.

: Sch

ool o

f Hop

e

71

Man

go

(Man

go, n

.d.)

R

educ

e ca

rbon

foot

prin

t.

Proj

ects

for o

ffse

tting

CO

2 em

issi

ons.

Pr

oduc

t hea

lth a

nd sa

fety

stan

dard

. O

wn

rese

arch

inst

itute

for C

SR.

O

wn

rese

arch

inst

itute

for C

SR.

Cod

e of

con

duct

. O

wn

rese

arch

inst

itute

for C

SR.

Partn

ersh

ips t

o im

prov

e sa

fety

co

nditi

ons i

n su

pply

co

untri

es.

!88

72

Prin

cess

(P

rince

ss, n

.d.)

Pr

oduc

ts a

re la

belle

d as

gre

en

Red

ucin

g su

pply

cha

ins i

n or

der t

o ga

in m

ore

cont

rol.

IE

H.

Ref

eren

ces f

rom

the

sam

ple

sear

ch

Abe

rcro

mbi

e &

Fitc

h. (n

.d.).

A&

F C

AR

ES. R

etrie

ved

from

http

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ww

.anf

care

s.org

/ A

dida

s Gro

up. (

n.d.

). G

ENER

AL

APP

RO

AC

H. R

etrie

ved

from

http

://w

ww

.adi

das-

grou

p.co

m/e

n/su

stai

nabi

lity/

man

agin

g-su

stai

nabi

lity/

gene

ral-a

ppro

ach/

A

PPLE

. (n.

d.-a

). En

viro

nmen

tal R

espo

nsib

ility

. Ret

rieve

d fr

om h

ttp://

ww

w.a

pple

.com

/env

ironm

ent/

APP

LE. (

n.d.

-b).

Supp

lier R

espo

nsib

ility

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rieve

d fr

om h

ttp://

ww

w.a

pple

.com

/sup

plie

r-re

spon

sibi

lity/

B

est B

uy. (

n.d.

-a).

Cal

iforn

ia S

uppl

y C

hain

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nspa

renc

y A

ct. R

etrie

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from

http

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ww

.bes

tbuy

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/lega

l-priv

acy-

polic

ies/

ca-tr

ansp

aren

cy-

act/p

cmca

t263

0000

5000

3.c?

id=p

cmca

t263

0000

5000

3 B

est B

uy. (

n.d.

-b).

Cor

pora

te R

espo

nsib

ility

and

Sus

tain

abili

ty. R

etrie

ved

from

http

s://c

orpo

rate

.bes

tbuy

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tain

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Can

on. (

2015

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y). C

anon

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tain

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om/c

sr/re

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13a,

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r 28)

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agon

ia”A

nti”

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ck F

riday

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paig

n U

rges

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o R

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r Wor

n C

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agon

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lack

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s-cu

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ir-w

orn-

clot

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hees

eman

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ovem

ber 1

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ell A

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rce

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ht

tp://

ww

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iple

pund

it.co

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ell-a

nnou

nces

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ls-s

ourc

e-pa

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only

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ger U

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te to

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alifo

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tribu

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om h

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ww

w.tr

iple

pund

it.co

m/2

013/

05/k

roge

r-fo

od-w

aste

-pow

er-s

outh

ern-

ca

lifor

nia-

dist

ribut

ion-

cent

er/

CO

STC

O. (

n.d.

). C

OR

POR

ATE

SU

STA

INA

BIL

ITY

, EN

ERG

Y A

ND

AN

IMA

L W

ELFA

RE.

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rieve

d fr

om h

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corp

orat

e-ir.

net/p

hoen

ix.z

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l?c=

8383

0&p=

irol-s

usta

inab

ility

D

IOR

. (20

12).

AN

NU

AL

REP

OR

T: C

OR

POR

ATE

SO

CIA

L R

ESPO

NSI

BIL

ITY

INIT

IATI

VES

. Ret

rieve

d fr

omht

tp://

ww

w.c

sr-r

esou

rces

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pany

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files

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istia

n-di

or--

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stai

nabi

lity-

repo

rt Fe

lste

d, A

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12, A

pril

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ecto

r: Su

stai

nabl

e sh

ops r

educ

e ru

nnin

g co

sts.

Ret

rieve

d fr

om h

ttp://

ww

w.ft

.com

/cm

s/s/

0/68

0709

36-8

313-

11e1

-929

f-00

144f

eab4

9a.h

tml#

axzz

3pm

caxL

Fr

etex

. (n.

d.).

Om

Fre

tex.

Ret

rieve

d fr

om h

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ww

w.fr

etex

.no/

om-f

rete

x/om

-fre

tex-

norg

e

GA

P. (n

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tain

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ty. R

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from

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ww

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inc.

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tent

/gap

inc/

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l/sus

tain

abili

ty.h

tml

Get

tler,

L. (2

015,

Feb

ruar

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reen

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hUP:

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ends

tran

sfor

min

g re

tail

sust

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from

http

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ww

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ifthe

stat

e.co

m.a

u/bu

sine

ss/tr

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en-m

ashu

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trend

s-

trans

form

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reta

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GIL

DA

N. (

n.d.

). G

enui

ne S

tew

ards

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negi

ldan

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). G

reen

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1-s

top

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ater

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t.com

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ende

pot/a

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AIN

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out.h

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om/e

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AIN

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aina

bilit

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Hol

ala

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tage

Clo

thin

g. (n

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OU

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m/b

log/

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e_id

=520

IK

EA. (

n.d.

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MEN

NES

KER

OG

MIL

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KEA

sats

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å en

mer

bæ

rekr

aftig

frem

tid. R

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O/p

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out_

NO

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In

dite

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tain

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OLL

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AN

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AM

MEN

DR

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w.k

esko

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loba

lass

ets/

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stot

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ko_c

orpo

rate

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pons

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no_6

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K

IWI.

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amfu

nnsa

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atur

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d.).

Soci

ally

Res

pons

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Pro

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ww

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ls.c

om/c

atal

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omm

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geN

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soci

ally

resp

onsi

ble

L’

Occ

itane

. (n.

d.).

L’O

CC

ITA

NE

BR

YR

SEG

. Ret

rieve

d fr

om h

ttp://

no.lo

ccita

ne.c

om/o

ccca

res,1

8,2,

3581

7,36

0911

.htm

L’

OR

ÉAL.

(n.d

.). C

SR C

OM

MIT

MEN

TS. R

etrie

ved

from

http

://w

ww

.lore

al.c

om/c

sr-c

omm

itmen

ts

Levi

Stra

uss &

Co.

(201

2, S

epte

mbe

r). 2

012:

CLI

MA

TE C

HA

NG

E ST

RA

TEG

Y. R

etrie

ved

from

http

://le

vist

raus

s.com

/wp-

cont

ent/u

ploa

ds/2

014/

01/2

012-

Clim

ate-

Cha

nge-

Stra

tegy

.pdf

!89

Levi

Stra

uss &

Co.

(n.d

.). S

UST

AIN

AB

ILIT

Y: I

NTR

OD

UC

TIO

N. R

etrie

ved

from

http

://w

ww

.levi

stra

uss.c

om/s

usta

inab

ility

/

Lind

ex. (

n.d.

). K

ort o

m b

ære

kraf

tighe

t i L

inde

x. R

etrie

ved

from

http

://ab

out.l

inde

x.co

m/n

o/ko

rt-om

-bae

rekr

aftig

het-i

-lind

ex/

Low

e’s.

(n.d

.-a).

Low

e’s S

ocia

l Res

pons

ibili

ty. R

etrie

ved

from

http

://re

spon

sibi

lity.

low

es.c

om/

Low

e’s.

(n.d

.-b).

Low

e’s P

olic

y on

Sus

tain

abili

ty. R

etrie

ved

from

http

://w

ww

.low

es.c

om/c

d_Lo

wes

+Pol

icy+

on+S

usta

inab

ility

_128

6385

507_

?sto

reId

=101

51&

lang

Id=-

1&ca

talo

gId=

1005

1

Mac

clea

ns.c

a. (2

014,

June

5).

Top

50 re

spon

sibl

e co

rpor

atio

ns: 2

014.

Ret

rieve

d fr

om h

ttp://

ww

w.m

acle

ans.c

a/w

ork/

best

com

pani

es/to

p-50

-soc

ially

-res

pons

ible

-cor

pora

tions

-201

4/

Mac

y’s I

nc. (

n.d.

). So

cial

Res

pons

ibili

ty. R

etrie

ved

from

http

://w

ww

.mac

ysin

c.co

m/s

ocia

l-res

pons

ibili

ty/

Man

go. (

n.d.

). C

OR

POR

ATE

SO

CIA

L R

ESPO

NSI

BIL

ITY

. Ret

rieve

d fr

om h

ttp://

ww

w.m

ango

.com

/web

/oi/s

ervi

cios

/com

pany

/IN/e

mpr

esa/

rsc.

htm

M

arks

& S

penc

er. (

n.d.

). W

ELC

OM

E TO

PLA

N A

. Ret

rieve

d fr

om h

ttp://

corp

orat

e.m

arks

ands

penc

er.c

om/p

lan-

a?in

tid=g

ft_pl

ana

M

arre

, W. (

n.d.

). 20

09 S

hop

for S

usta

inab

ility

: Top

10

Sust

aina

ble

Ret

aile

rs to

Sup

port

this

Hol

iday

Sea

son

and

Bey

ond

by W

ill M

arre

. Ret

rieve

d fr

om

http

://sa

veth

ewor

ldbo

ok.w

illm

arre

.com

/pre

ss/to

p-10

-sus

tain

able

-ret

aile

rs/

Nes

tlé N

espr

esso

. (n.

d.-a

). C

reat

ing

Shar

ed V

alue

. Ret

ried

from

http

://w

ww

.nes

tle-n

espr

esso

.com

/sus

tain

abili

ty/c

reat

ing-

shar

ed-v

alue

N

estlé

Nes

pres

so. (

n.d.

-a).

The

Posi

tive

Cup

- N

espr

esso

Way

of d

oing

bus

ines

s. R

etrie

ved

from

http

://w

ww

.nes

tle-n

espr

esso

.com

/sus

tain

abili

ty

NIK

E. (n

.d.-a

). C

R R

epor

t: O

UR

SU

STA

INA

BIL

ITY

REP

OR

T. R

etrie

ved

from

http

://w

ww

.nik

eres

pons

ibili

ty.c

om/re

port/

cont

ent/c

hapt

er/o

ur-s

usta

inab

ility

-stra

tegy

N

IKE.

(n.d

.-b).

CR

Rep

ort:

BU

SIN

ESS

OV

ERV

IEW

. Ret

rieve

d fr

om h

ttp://

ww

w.n

iker

espo

nsib

ility

.com

/repo

rt/co

nten

t/cha

pter

/bus

ines

s-ov

ervi

ew

NIK

E. (n

.d.-c

). C

R R

epor

t: C

LIM

ATE

& E

NER

GY

. Ret

rieve

d fr

om h

ttp://

ww

w.n

iker

espo

nsib

ility

.com

/repo

rt/co

nten

t/cha

pter

/clim

ate-

ener

gy

Pata

goni

a. (n

.d.-a

). C

orpo

rate

Res

pons

ibili

ty -

Prom

otin

g fa

ir la

bor p

ract

ices

and

safe

wor

king

con

ditio

ns th

roug

hout

Pat

agon

ia’s

supp

ly c

hain

. Ret

rieve

d fr

om

http

://w

ww

.pat

agon

ia.c

om/u

s/pa

tago

nia.

go?a

sset

id=6

7372

Pa

tago

nia.

(n.d

.-b).

The

Cle

anes

t Lin

e [B

log]

. Ret

rieve

d fr

om h

ttp://

ww

w.th

ecle

anes

tline

.com

/ Pr

ince

ss. (

n.d.

). M

iljøp

rofil

. Ret

rieve

d fr

om h

ttp://

ww

w.p

rince

ssbu

tikke

n.no

/info

/milj

oepr

ofil

REI

. (20

15, M

ay).

2014

STE

WA

RD

SHIP

REP

OR

T. R

etrie

ved

from

http

://w

ww

.rei.c

om/c

onte

nt/d

am/im

ages

/Pub

lic%

20A

ffai

rs/2

015/

Stew

ards

hip%

20R

epor

t%20

Page

%20

2014

.pdf

R

EI. (

n.d.

-a).

SUST

AIN

AB

LE O

PER

ATI

ON

S. R

etrie

ved

from

http

://w

ww

.rei.c

om/s

tew

ards

hip/

sust

aina

ble-

oper

atio

ns.h

tml

RIL

A. (

2015

, Oct

ober

22)

. RET

AIL

CH

ECK

OU

T: T

OP

RET

AIL

ERS

MA

KE

CLI

MA

TE P

LED

GE.

Ret

rieve

d fr

om

http

://w

ww

.rila

.org

/new

s/re

tailc

heck

out/L

ists

/Pos

ts/P

ost.a

spx?

List

=538

abc7

d-dc

d6-4

6f2-

8316

-01b

d11c

d855

b&ID

=106

&W

eb=e

fbee

e77-

4209

-4a7

5-a7

af-a

ee9a

defa

f7f

Roc

ksbo

x. (n

.d.).

Fro

nt P

age:

HO

W IT

WO

RK

S. R

etrie

ved

from

http

s://w

ww

.rock

sbox

.com

/ R

SA G

roup

. (20

12).

PAPE

R 3

: SU

STA

INA

BLE

RET

AIL

. Ret

rieve

d fr

om h

ttp://

be.rs

agro

up.c

om/c

onte

nt/fi

lest

ore/

Publ

ic%

20Fi

les/

RSA

_The

_Ret

ail_

Serie

s_-

_Pap

er_3

_Sus

tain

able

_Ret

ail_

._pd

f.pdf

Si

egel

, RP.

(201

4, A

pril

24).

CA

N C

LOTH

ING

BE

MA

DE

IN T

HE

US

AG

AIN

? O

SMIU

M S

AY

S Y

ES [B

log

Post

]. R

etrie

ved

from

http

://w

ww

.just

mea

ns.c

om/b

logs

/can

-clo

thin

g-be

-mad

e-

in-th

e-us

-aga

in-o

smiu

m-s

ays-

yes

Stap

les.

(n.d

.). C

OR

POR

ATE

RES

PON

SIB

ILIT

Y. R

etrie

ved

from

http

://w

ww

.stap

les.c

om/s

bd/c

re/m

arke

ting/

abou

t_us

/cor

pora

te-r

espo

nsib

ility

.htm

l St

orm

berg

. (n.

d.-a

). K

liman

øytra

l bed

rift.

Ret

rieve

d fr

om h

ttp://

ww

w.st

orm

berg

.com

/no/

om-s

torm

berg

/milj

o/kl

iman

oytra

l-bed

rift

Stor

mbe

rg. (

n.d.

-b).

Sam

funn

sans

var.

Ret

rieve

d fr

om h

ttp://

ww

w.st

orm

berg

.com

/no/

om-s

torm

berg

/sam

funn

sans

var/1

-pro

sent

Ta

rget

. (n.

d.).

Cor

pora

te R

espo

nsib

ility

. Ret

rieve

d fr

om h

ttps:

//cor

pora

te.ta

rget

.com

/cor

pora

te-r

espo

nsib

ility

#?ln

k=fn

av_t

_spc

_1_9

Ta

ylor

, F.N

. (20

15, J

uly

1). 2

2 G

reat

Exa

mpl

es o

f Soc

ially

Res

pons

ible

Bus

ines

ses.

Ret

rieve

d fr

om h

ttp://

ww

w.b

usin

essn

ewsd

aily

.com

/549

9-ex

ampl

es-s

ocia

lly-r

espo

nsib

le-b

usin

esse

s.htm

l Th

e B

ody

Shop

. (n.

d.).

BES

KY

TT P

LAN

ETEN

. Ret

rieve

d fr

om h

ttp://

ww

w.th

ebod

ysho

p.no

/pro

tect

_the

_pla

net

Tim

berla

nd. (

n.d.

). TI

MB

ERLA

ND

RES

PON

SIB

ILIT

Y. R

etrie

ved

from

http

://re

spon

sibi

lity.

timbe

rland

.com

/ TO

MS.

(n.d

.). O

ne fo

r One

: Wha

t we

give

. Ret

rieve

d fr

om h

ttp://

ww

w.to

ms.c

om/w

hat-w

e-gi

veht

tp://

ww

w.to

ms.c

om/w

hat-w

e-gi

ve

Tse,

C. (

2013

, Oct

ober

9).

Mak

ing

sust

aina

bilit

y be

autif

ul w

ith M

AC

cos

met

ics.

Ret

rieve

d fr

om h

ttp://

ww

w.b

izen

ergy

.ca/

blog

/mak

ing-

sust

aina

bilit

y-be

autif

ul-w

ith-m

ac-c

osm

etic

s/

Var

nerg

rupp

en. (

n.d.

). SA

MFU

NN

SAN

SVA

R. R

etrie

ved

from

http

://w

ww

.var

ner.n

o/no

/Sam

funn

sans

var1

1/SA

MFU

NN

SAN

SVA

R/

Vija

yara

ghav

an, A

. (20

12, F

ebru

ary

13).

Safe

way

Ann

ounc

es S

usta

inab

le T

una-

Sour

cing

Pol

icy.

Ret

rieve

d fr

om h

ttp://

ww

w.tr

iple

pund

it.co

m/2

012/

02/s

afew

ay-a

nnou

nces

-sus

tain

able

-tuna

- so

urci

ng-p

olic

y/

VIT

A. (

n.d.

). Sa

mfu

nn o

g M

iljø.

Ret

rieve

d fr

om h

ttp://

ww

w.v

ita.n

o/m

iljo/

W

alm

art.

(n.d

.). G

loba

l Res

pons

ibili

ty. R

etrie

ved

from

http

://co

rpor

ate.

wal

mar

t.com

/glo

bal-r

espo

nsib

ility

/ ZA

RA

. (n.

d.).

VÅ

R F

OR

PLIK

TELS

E. R

etrie

ved

from

http

://w

ww

.zar

a.co

m/n

o/no

/firm

a/v%

C3%

A5r

t-eng

asje

men

t-

c180

01.h

tml#

utm

_ref

erre

r=ht

tp%

3A%

2F%

2Fw

ww

.zar

a.co

m%

2F%

3Fgo

%3D

http

%25

3A%

2F%

2Fw

ww

.zar

a.co

m%

2Fsh

are%

2Fco

mpa

ny%

2Fou

r-m

issi

on-s

tate

men

t-c18

001.

htm

l

!90

App

endi

x 3:

Fin

ding

s fro

m in

-dep

th in

terv

iew

s Th

ese

findi

ngs s

umm

ariz

e an

d ca

tego

rize

our f

indi

ngs f

rom

the

in-d

epth

inte

rvie

ws.

The

findi

ngs a

re c

ateg

oriz

ed a

nd c

oded

acc

ordi

ng to

the

five

stag

es o

f the

bus

ines

s mod

el in

nova

tion

fram

ewor

k: (1

) Ini

tiatio

n, (2

) Ide

atio

n, (3

) Int

egra

tion,

(4) I

mpl

emen

tatio

n, a

nd (5

) Con

tinuo

us b

usin

ess m

odel

inno

vatio

n. If

the

read

er h

as fu

rther

inte

rest

in th

e fu

ll tra

nscr

ipts

of t

he

inte

rvie

ws,

plea

se c

onta

ct u

s at s

ilje.

s.moe

@gm

ail.c

om o

r ac.

rose

nqvi

st@

gmai

l.com

.

Not

atio

ns u

sed:

IK

EA: A

nder

s Len

narts

son,

Sus

tain

abili

ty M

anag

er, I

KEA

Nor

way

H

&M

: Ben

edic

te B

. Eie

, Sus

tain

abili

ty M

anag

er, H

&M

Nor

way

St

orm

berg

: Jan

Hal

vor B

rans

dal,

CR

Man

ager

, Sto

rmbe

rg

Gra

mst

ad: C

amill

a S.

Gra

mst

ad, E

nviro

nmen

t and

CSR

Res

pons

ible

, Virk

e Tr

ade

Org

aniz

atio

n

T

opic

C

ompa

ny

Quo

te

Initi

atio

n: U

nder

stan

ding

the

Nee

d fo

r C

hang

e Ig

nora

nce

Lack

of b

usin

ess m

odel

inno

vatio

n ca

n be

due

to a

m

isun

ders

tand

ing

of th

e ad

vant

ages

from

a re

spon

sibl

e st

rate

gy

Gra

mst

ad

Som

e re

taile

rs h

ave

not f

igur

ed o

ut th

at th

ey c

an u

se C

SR a

s a re

puta

tion

and

com

petit

ive

adva

ntag

e.

Igno

ranc

e R

etai

lers

bla

me

the

cons

umer

s for

not

bei

ng m

indf

ul, w

hile

co

nsum

ers b

lam

e re

taile

rs fo

r not

taki

ng re

spon

sibi

lity

G

ram

stad

Re

taile

rs o

ften

clai

m th

at c

onsu

mer

s do

not d

eman

d it,

and

the

cons

umer

s cla

im th

at th

ey d

o no

t hav

e an

y op

tions

bec

ause

reta

ilers

hav

e no

t fac

ilita

ted

CSR

. Ret

aile

rs th

eref

ore

blam

es li

ttle

awar

enes

s am

ong

cons

umer

s, w

hich

I be

lieve

is w

rong

. To

p dr

iver

s R

esea

rch

has s

how

n th

at m

oral

ity a

nd p

rofit

abili

ty a

re th

e to

p dr

iver

s G

ram

stad

In

Vir

ke’s

surv

ey, a

list

pre

sent

s mot

ives

beh

ind

CSR

. “Be

caus

e it

is m

oral

ly c

orre

ct”

is o

n th

e to

p,

and

the

seco

nd h

ighe

st re

ason

is “

beca

use

it is

pro

fitab

le”.

Stra

tegi

c m

otiv

atio

n Th

e bu

sine

ss p

ersp

ectiv

e is

a lo

ng-te

rm re

aliz

atio

n th

at

unsu

stai

nabl

e op

erat

ion

cann

ot c

ontin

ue

H&

M

The

first

obj

ectiv

e is

dri

ven

from

a b

usin

ess p

ersp

ectiv

e. C

ompa

nies

like

H&

M, w

orki

ng in

the

text

ile

sect

or, c

onsu

me

a lo

t. W

e ar

e a

very

reso

urce

dem

andi

ng a

nd m

ater

ial i

nten

sive

sect

or. I

n ad

ditio

n,

we

are

also

link

ed to

seve

ral e

xtre

me

soci

al c

halle

nges

. If w

e ar

e go

ing

to ru

n in

this

sect

or a

s a

fam

ily b

usin

ess [

…] w

e ha

ve to

do

som

ethi

ng.

Entre

pren

euria

l vi

sion

R

espo

nsib

le b

usin

ess p

ract

ices

from

the

star

t, le

ad b

y th

e en

trepr

eneu

r St

orm

berg

O

ur e

ntre

pren

eur a

nd o

ur p

rese

nt le

ader

est

ablis

hed

the

com

pany

’s re

spon

sibl

e vi

sion

. Eve

ntua

lly,

the

com

pany

gre

w fr

om b

eing

a c

ompa

ny w

ith fo

ur p

erso

ns, t

o be

com

e a

com

pany

with

400

per

sons

. It

is th

eref

ore

clea

r tha

t the

re h

as b

een

a ce

rtai

n de

velo

pmen

t. H

owev

er, t

he c

ore

valu

es a

nd

foun

datio

n ha

ve b

een

mor

e or

less

the

sam

e si

nce

the

begi

nnin

g.

Inte

rnal

driv

e La

ck o

f con

trol c

reat

ed a

n in

tern

al n

eed

H&

M

It w

as a

wis

h fo

r cha

nge,

bec

ause

ther

e w

ere

man

y th

ings

we

did

not h

ave

fully

con

trol

ove

r. O

ne g

ot

an in

sigh

t int

o ho

w th

ings

wer

e […

] Hen

ce, i

t was

bas

ed o

n an

inte

rnal

nee

d. O

n th

e ot

her h

and,

this

w

as a

lso

a st

art f

or th

e ex

tern

al a

war

enes

s abo

ut th

ese

issu

es. M

any

real

ized

that

the

who

le in

dust

ry

had

som

e ch

alle

nges

that

nee

ded

to b

e de

alt w

ith

Inte

rnal

driv

e Th

e dr

iver

for r

espo

nsib

ility

can

com

e fr

om e

mpl

oyee

s, bo

th o

n th

e m

anag

emen

t lev

el, a

nd a

t low

er le

vels

IK

EA

The

stro

nges

t dri

ver c

omes

from

with

in. I

t com

es in

tern

ally

from

bot

h th

e m

anag

emen

t and

the

empl

oyee

s […

] Em

ploy

ees a

re e

xpec

ting

us to

take

resp

onsi

bilit

y, a

nd th

ey o

ften

wan

t to

part

icip

ate

in ta

king

resp

onsi

bilit

y. T

he m

anag

emen

t is a

lso

an im

port

ant d

rive

r, an

d th

ey u

nder

stan

d th

at th

is is

ab

out t

hink

ing

in lo

ng-te

rms

Prof

itabi

lity

Prof

itabl

e in

the

long

-run

St

orm

berg

Fi

rstly

, I th

ink

it is

impo

rtan

t for

all

com

pani

es re

gard

less

of i

ndus

try.

Sec

ondl

y, I

belie

ve th

at

show

ing

CR

activ

ely

is n

ot o

nly

impo

rtan

t, bu

t als

o pr

ofita

ble.

!91

Firs

t mov

er

adva

ntag

e B

eing

a fi

rst m

over

in re

spon

sibl

e pr

actic

es c

an le

ad to

co

mpe

titiv

e ad

vant

ages

H

&M

[…

]it h

as a

com

petit

ive

obje

ctiv

e. H

&M

wan

ts to

be

the

first

mov

er o

n th

ese

area

s.

Dis

rupt

ers

Mar

ket p

oten

tial w

hich

lies

in e

stab

lishi

ng b

usin

esse

s bas

ed o

n so

lvin

g w

orld

pro

blem

s G

ram

stad

C

ompa

nies

shou

ld n

ot u

nder

estim

ate

the

huge

mar

ket p

oten

tial t

hat l

ies i

n es

tabl

ishi

ng b

usin

esse

s ba

sed

on so

lvin

g w

orld

pro

blem

s. Fo

r exa

mpl

e en

viro

nmen

tal t

echn

olog

y or

soci

al e

ntre

pren

eurs

hip.

I t

hink

this

is a

hug

e m

arke

t and

that

it is

pos

sibl

e to

ear

n pr

ofits

by

solv

ing

wor

ld p

robl

ems.

Attr

activ

e em

ploy

er

Impo

rtanc

e of

bei

ng p

erce

ived

as a

n at

tract

ive

empl

oyer

H

&M

Th

e se

cond

obj

ectiv

e co

ncer

ns H

R ac

tiviti

es: T

o be

an

attr

activ

e em

ploy

er a

nd a

n at

trac

tive

wor

kpla

ce. I

per

sona

lly, w

ould

not

like

to w

ork

only

to m

ake

a w

ealth

y m

an e

ven

wea

lthie

r. I w

ant t

o fe

el th

at I

am p

art o

f the

righ

t tea

m.

Bra

nd im

age

A re

spon

sibl

e pr

ofile

has

an

effe

ct o

n ho

w c

onsu

mer

s per

ceiv

e th

e br

and

H&

M

The

thir

d ob

ject

ive

conc

erns

cus

tom

ers,

whi

ch is

a g

iven

. How

ever

, we

have

seen

that

this

is n

ot

spec

ifica

lly sa

le tr

igge

ring

. Nev

erth

eles

s, it

has a

lot t

o do

with

our

bra

nd e

quity

and

imag

e in

the

long

term

. We

now

see

that

mor

e an

d m

ore

peop

le a

re e

ngag

ed in

thes

e is

sues

. B

rand

Cris

is

The

text

ile in

dust

ry e

xper

ienc

es e

xter

nal p

ress

ure,

and

trig

gers

re

spon

sibl

e bu

sine

ss p

ract

ices

St

orm

berg

Th

e te

xtile

indu

stry

in p

artic

ular

has

rece

ived

a lo

t of a

ttent

ion

in d

iffer

ent f

orum

s for

man

y re

ason

s. Pa

rtly

bec

ause

of a

stro

ng fo

cus o

n la

bor c

ondi

tions

. Esp

ecia

lly in

man

ufac

turi

ng c

ount

ries

, suc

h as

C

hina

and

Ban

glad

esh,

whe

re a

lot o

f the

pro

duct

ion

is d

one.

B

rand

cris

is

Rep

utat

ion

cris

is a

s an

initi

al tr

igge

r for

resp

onsi

ble

oper

atio

ns

Gra

mst

ad

Cha

nges

ofte

n ha

ppen

afte

r a c

ompa

ny h

as h

ad a

repu

tatio

n cr

isis

. If s

omeo

ne is

bus

ted

for

som

ethi

ng, i

t bec

omes

nat

ural

to se

e th

e ne

ed fo

r a C

SR-s

trat

egy.

How

ever

, com

pani

es sh

ould

thin

k ah

ead.

The

re sh

ould

not

be

a ne

ed fo

r a re

puta

tion

cris

is fi

rst.

Bra

nd Im

age

&

Exte

rnal

pre

ssur

e

Bei

ng a

pop

ular

bra

nd c

oexi

sts w

ith e

xter

nal a

ttent

ion,

whi

ch

stre

ngth

ens t

he d

river

for b

eing

a re

spon

sibl

e re

taile

r IK

EA

It is

cle

ar th

at a

n ex

tern

al p

ress

ure

is so

met

hing

all

com

pani

es e

xper

ienc

e. IK

EA h

as e

xper

ienc

ed it

at

leas

t. W

e ha

ve a

qui

te p

opul

ar b

rand

that

rece

ives

a lo

t of a

ttent

ion.

Evi

dent

ly, s

omet

imes

too

muc

h at

tent

ion,

bec

ause

the

exte

rnal

atte

ntio

n an

d ou

r int

erna

l act

iviti

es m

ay n

ot a

lway

s be

prop

ortio

nal.

On

the

othe

r han

d, o

ur b

rand

imag

e, a

s wel

l as o

ur la

rge

com

pany

size

, giv

es a

n op

port

unity

to

impa

ct o

ther

stak

ehol

ders

and

par

tner

s. Ex

tern

al p

ress

ure

Easi

er to

crit

iciz

e re

taile

rs w

ho a

re c

omm

unic

atin

g ab

out t

heir

resp

onsi

ble

busi

ness

pra

ctic

es, h

ence

, man

y st

ay u

nder

the

rada

r G

ram

stad

I t

hink

man

y re

taile

rs fi

nd it

com

fort

able

to st

ay u

nder

the

rada

r. If

com

pani

es st

art t

o co

mm

unic

ate

wha

t the

y ar

e do

ing,

it is

eas

ier t

o cr

itici

ze th

em fo

r not

doi

ng e

noug

h. W

e ca

n fo

r exa

mpl

e se

e ho

w

muc

h cr

itica

l foc

us th

ere

has b

een

on H

&M

, and

they

are

pro

babl

y th

e be

st o

nes i

n th

e in

dust

ry. F

or

thes

e re

ason

s, m

any

com

pani

es fi

nd it

com

fort

able

to st

ay o

ut o

f the

rada

r. H

owev

er, m

any

com

pani

es th

ink

CSR

doe

s not

con

cern

them

. Ex

tern

al p

ress

ure

BM

I can

be

trigg

ered

by

exte

rnal

pre

ssur

e, b

ut m

any

reta

ilers

do

not r

ealiz

e it

until

it is

too

late

G

ram

stad

Th

ere

is n

ot so

muc

h bu

sine

ss m

odel

inno

vatio

n in

reta

il. T

here

is a

nee

d fo

r ext

erna

l pre

ssur

e, a

nd I

am a

frai

d th

at e

nvir

onm

enta

l cha

lleng

es, r

esou

rce

scar

city

, will

be

the

turb

ulen

ce th

at w

ill c

hang

e th

e bu

sine

ss m

odel

in re

tail.

B

rand

cris

is

C

hild

labo

r and

cha

lleng

es c

once

rnin

g hu

man

righ

ts h

as tr

igge

red

the

need

for c

hang

e IK

EA

En

viro

nmen

tal c

once

rns a

nd C

SR b

ecam

e cr

itica

l whe

n us

e of

chi

ld la

bor w

as d

isco

vere

d, a

nd IK

EA

beca

me

a fo

cus i

n th

e m

edia

. The

eas

y w

ay o

ut w

ould

hav

e be

en to

igno

re th

is, o

r exi

t the

fact

ory

and

canc

el th

e co

ntra

ct w

ith th

e su

pplie

r. H

owev

er, w

e de

cide

d th

at w

e ne

eded

to fi

nd a

solu

tion.

C

usto

mer

loya

lty

Cus

tom

er lo

yalty

can

incr

ease

due

to a

ssoc

iatio

ns w

ith a

goo

d co

nsci

ence

and

the

bran

d H

&M

“

No-

one

sits

at h

ome

on a

Fri

day

nigh

t and

thin

ks: N

ow, I

hav

e a

real

cra

ving

for “

sust

aina

ble

pizz

a”. F

irst

of a

ll, y

ou a

re h

ungr

y fo

r piz

za. H

owev

er, a

fter y

ou h

ave

finis

hed

eatin

g yo

ur d

elic

ious

pi

zza,

it g

ives

you

a g

reat

feel

ing

to k

now

that

the

ingr

edie

nts u

sed

are

deve

lope

d in

a re

spon

sibl

e w

ay. A

nd th

at th

is is

goo

d, n

ot o

nly

for y

our o

wn

heal

th, b

ut fo

r the

pla

net t

hat w

e liv

e on

. C

onse

quen

tly, t

his m

ay b

e th

e re

ason

to w

hy y

ou c

ome

back

aga

in.”

C

usto

mer

s’

atta

chm

ent

Con

sum

ers a

re p

erso

nally

atta

ched

to c

loth

ing

and

will

ther

efor

e en

gage

in C

SR is

sues

con

cern

ing

the

text

ile in

dust

ry

Stor

mbe

rg

Clo

thes

are

som

ethi

ng th

at p

eopl

e us

e in

thei

r dai

ly li

ves a

nd th

eref

ore

som

ethi

ng p

eopl

e ha

ve a

pe

rson

al re

latio

nshi

p w

ith. T

his m

akes

CR

[Cor

pora

te R

espo

nsib

ility

] int

o so

met

hing

that

eng

ages

pe

ople

, and

has

ther

efor

e gi

ven

the

text

ile in

dust

ry a

spec

ial f

ocus

.

Idea

tion:

Ref

ram

ing

Bel

iefs

Ref

ram

ing

belie

fs

Whi

le se

arch

ing

for e

xter

nalit

ies,

one

mus

t ref

ram

e be

liefs

abo

ut

curr

ent o

pera

tions

. A c

ruci

al fa

ctor

is to

real

ize

the

impa

ct th

e co

mpa

ny h

as o

n st

akeh

olde

rs/e

nviro

nmen

t, an

d th

at th

e co

mpa

ny

mus

t tak

e re

spon

sibi

lity

for t

his i

mpa

ct

Gra

mst

ad

I bel

ieve

that

eve

ry c

ompa

ny m

ust b

e ab

le to

see

“wha

t con

cern

s me?

”. C

ompa

nies

mus

t ask

th

emse

lves

: Who

mig

ht m

y co

mpa

ny im

pact

? An

d, d

o so

met

hing

bet

ter f

or?

!92

Bus

ines

s Con

cept

B

usin

ess i

n its

elf c

reat

es v

alue

for t

he so

ciet

y, th

roug

h va

lue

crea

tion

and

wor

kpla

ces

Gra

mst

ad

I hop

e m

ore

peop

le w

ill se

e al

l the

pos

itive

thin

gs th

at b

usin

esse

s act

ually

con

trib

ute

with

. Bus

ines

ses

cont

ribu

te w

ith w

orkp

lace

s, va

lue

crea

tion,

and

incl

udin

g th

ose

who

stan

d on

the

outs

ide,

co

ntri

butin

g to

the

soci

ety

as a

who

le.

Bus

ines

s con

cept

In

any

bus

ines

s mod

el, t

he c

once

pt m

ust b

e co

here

nt. T

here

fore

, th

e id

eatio

n sh

ould

als

o fo

cus o

n ho

w to

inte

grat

e re

spon

sibi

lity

in th

e tra

ditio

nal c

once

pt a

nd v

isio

n

IKEA

I a

m h

appy

to w

ork

in a

com

pany

that

has

resp

onsi

bilit

y in

its v

isio

n. W

hen

IKEA

was

bui

ld, m

any

peop

le w

ere

dedi

cate

d to

cre

ate

a be

tter d

aily

life

for t

he p

eopl

e. T

his i

s IK

EA’s

vis

ion.

It st

ill h

olds

to

this

day

, and

will

alw

ays b

e a

cent

ral p

art o

f the

com

pany

. B

usin

ess c

once

pt

The

resp

onsi

bilit

y sh

ould

clo

sely

con

nect

with

the

busi

ness

idea

, in

this

way

, pra

ctic

es w

ill h

ave

a co

here

nt st

rate

gy a

nd c

once

pt

IKEA

So

me

com

pani

es b

ase

thei

r int

erpr

etat

ion

on th

e cu

stom

er’s

dem

ands

. Of c

ours

e, w

e al

so li

sten

to o

ur

cust

omer

s. H

owev

er, I

thin

k it

is im

port

ant t

hat s

usta

inab

ility

is c

lose

ly c

onne

cted

to th

e bu

sine

ss

idea

. In

this

way

, one

has

its o

wn

perc

eptio

n of

wha

t is g

ood

and

wha

t is n

ot.

Cus

tom

er V

alue

Pr

opos

ition

Th

e re

spon

sibl

e st

rate

gy m

ust c

o-ex

ist w

ith th

e bu

sine

ss’ j

ob to

be

don

e in

the

mar

ket,

cont

inui

ng to

fulfi

ll cu

stom

ers’

nee

ds

H&

M

We

can

mak

e ec

olog

ical

pro

duct

s, an

d pr

oduc

e w

ith re

cycl

ed c

otto

n, b

ut if

the

clot

hes d

o no

t loo

k go

od, i

t is p

oint

less

. The

re is

onl

y a

smal

l par

t of t

he p

opul

atio

n th

at w

ear c

loth

es ju

st b

ecau

se th

e cl

othe

s are

sust

aina

ble.

The

rest

of t

he p

opul

atio

n w

ants

to lo

ok g

ood.

Hen

ce, H

&M

aim

s at b

eing

the

fash

ion

dest

inat

ion

num

ber o

ne. H

owev

er, w

e m

ust d

eliv

er q

ualit

y an

d fa

shio

n in

a su

stai

nabl

e w

ay.

Vis

ualiz

ing

resp

onsi

ble

busi

ness

pr

actic

es

Con

cept

ualiz

e th

e bu

sine

ss’ m

eani

ng o

f and

for r

espo

nsib

ility

. C

ompa

nies

ofte

n le

ad a

hol

istic

vie

w

H&

M

In g

ener

al, t

here

are

two

core

are

as: T

akin

g ca

re o

f peo

ple

and

the

envi

ronm

ent.

This

invo

lves

w

orki

ng fr

om th

e st

art o

f the

val

ue c

hain

, not

just

with

stor

es. I

n ad

ditio

n, w

e al

so h

ave

to fo

cus o

n w

hat h

appe

ns a

fter t

he p

rodu

cts l

eave

our

stor

es. T

his i

s qui

te im

port

ant,

beca

use

we

real

ize

that

we

have

a re

spon

sibi

lity,

and

we

wan

t to

take

resp

onsi

bilit

y al

l the

way

. V

isua

lizin

g re

spon

sibl

e bu

sine

ss

prac

tices

Def

inin

g an

d vi

sual

izin

g th

e m

eani

ng o

f res

pons

ibili

ty fo

r the

bu

sine

ss a

s a w

hole

, gui

des t

he w

ay fo

r fur

ther

inte

grat

ion

IK

EA

W

e ha

ve a

glo

bal s

trat

egy

calle

d “P

eopl

e an

d th

e Pl

anet

”, w

hich

is a

goo

d ex

ampl

e on

how

we

thin

k ar

ound

the

issu

e of

sust

aina

bilit

y. F

or m

any

com

pani

es th

is is

sue

is a

bout

redu

cing

and

min

imiz

ing

the

impa

ct o

n th

e en

viro

nmen

t. W

e go

a b

it fu

rthe

r tho

ugh.

For

us t

his i

ssue

is a

bout

hav

ing

a po

sitiv

e im

pact

on

peop

le a

nd th

e en

viro

nmen

t. V

isua

lizin

g re

spon

sibl

e bu

sine

ss

prac

tices

Res

pons

ibili

ty sh

ould

be

inte

grat

ed in

the

cust

omer

val

ue

prop

ositi

on

IKEA

M

ost c

usto

mer

s wan

t to

com

e to

one

of o

ur w

areh

ouse

s and

feel

a se

nse

of a

ssur

ance

that

wha

t the

y pu

rcha

se is

sust

aina

ble.

Nam

ely,

that

they

do

not f

eel a

nee

d to

che

ck th

e pr

ice

tag

for t

he m

ater

ials

us

ed. T

hey

can

buy

wha

teve

r the

y lik

e, a

nd fe

el se

cure

that

we

take

resp

onsi

bilit

y fo

r the

pro

duct

s be

ing

sust

aina

bly

prod

uced

. V

isua

lizin

g re

spon

sibl

e bu

sine

ss

prac

tices

Dur

ing

the

idea

tion

phas

e on

e ne

eds t

o se

t a c

lear

vis

ion

of h

ow

inte

grat

ed th

e st

rate

gy sh

ould

be

– co

ncer

ning

ow

n op

erat

ions

, th

e co

mm

unity

, etc

IKEA

W

e ha

ve a

glo

bal s

trat

egy

calle

d “P

eopl

e an

d th

e Pl

anet

”, w

hich

is a

goo

d ex

ampl

e on

how

we

thin

k ar

ound

the

issu

e of

sust

aina

bilit

y. F

or m

any

com

pani

es th

is is

sue

is a

bout

redu

cing

and

min

imiz

ing

the

impa

ct o

n th

e en

viro

nmen

t. W

e go

a b

it fu

rthe

r tho

ugh.

For

us t

his i

ssue

is a

bout

hav

ing

a po

sitiv

e im

pact

on

peop

le a

nd th

e en

viro

nmen

t. In

oth

er w

ords

, tha

t we

have

a n

et p

ositi

ve im

pact

on

peop

le

and

the

envi

ronm

ent.

Obv

ious

ly, t

his a

mbi

tion

is q

uite

big

, but

we

are

conv

ince

d th

at w

e ca

n ca

rry

this

out

. We

are

alre

ady

on a

goo

d pa

th in

man

y ar

eas.

V

isua

lizin

g re

spon

sibl

e bu

sine

ss

prac

tices

Com

pani

es a

re ta

king

a m

ore

holis

tic a

ppro

ach,

and

thus

gre

ater

re

spon

sibi

lity

Gra

mst

ad

I thi

nk a

noth

er tr

end

is th

at th

e bi

gges

t act

ors a

re g

oing

from

stat

ing

“we

will

min

imiz

e ou

r neg

ativ

e im

pact

on

the

soci

ety”

to st

atin

g “w

e ar

e go

ing

to h

ave

a ne

t pos

itive

impa

ct o

n so

ciet

y”. C

oca

Col

a an

d H

&M

are

exa

mpl

es o

f com

pani

es th

at a

re st

atin

g th

is. I

n ad

ditio

n, IK

EA, i

s sta

ting

that

“ou

r bu

sine

ss w

ill n

ot h

ave

a ne

gativ

e en

viro

nmen

tal f

ootp

rint

, we

are

goin

g to

con

trib

ute

posi

tivel

y”.

Coc

a C

ola

wan

ts to

con

trib

ute

in sa

ving

mor

e w

ater

than

all

the

wat

er th

ey a

ctua

lly u

se to

mak

e co

ca

cola

. Pr

iorit

izin

g re

spon

sibl

e pr

actic

es

As m

any

rese

arch

ers s

ay, i

deat

ion

is c

lose

ly c

onne

cted

to th

e im

plem

enta

tion

proc

ess,

beca

use

this

is w

here

a b

alan

ced

prio

ritiz

atio

n is

foun

d

IKEA

Th

e im

plem

enta

tion

of p

ract

ices

has

a lo

t to

do w

ith p

rior

ities

thou

gh. T

here

are

num

erou

s thi

ngs w

e w

ant t

o do

in th

is c

ompa

ny. W

e th

eref

ore

need

to fi

nd a

bal

ance

d pr

iori

tizat

ion

of a

ll th

e th

ings

we

wan

t to

do.

Prio

ritiz

ing

resp

onsi

ble

prac

tices

O

ne m

ust p

riorit

ize

wha

t to

do, i

n or

der f

or th

e ch

osen

pra

ctic

e to

ha

ve fu

ll ef

fect

H

&M

In

gen

eral

, one

thir

d of

the

LCA

[Life

Cyc

le A

naly

sis]

impa

ct li

es in

the

prod

uctio

n of

cot

ton,

one

th

ird

lies i

n th

e pr

oduc

tion

of th

e ph

ysic

al c

loth

ing,

and

one

thir

d is

con

nect

ed to

the

cons

umpt

ion

phas

e. H

ence

, it i

s im

port

ant t

o co

nsid

er w

hat h

appe

ns a

fter c

onsu

mpt

ion,

for e

xam

ple

wha

t you

do

with

you

r was

hing

mac

hine

at h

ome.

Pr

iorit

izin

g re

spon

sibl

e pr

actic

es

The

proc

ess m

ust i

nclu

de e

valu

atin

g w

hat c

halle

nges

that

lies

in

the

mar

ket,

to p

riorit

ize

prac

tices

cor

rect

ly

Stor

mbe

rg

Obt

aini

ng c

ontr

ol o

ver a

supp

ly c

hain

, and

in th

at w

ay a

ctiv

ely

enga

ging

in w

ork

with

eth

ical

trad

e of

th

e su

pply

cha

in, i

s a h

uge

chal

leng

e. T

he te

xtile

indu

stry

is st

rugg

ling

with

this

. Bec

ause

it is

har

d to

ob

tain

con

trol

. We

addr

ess t

hese

issu

es a

ctiv

ely,

but

it p

roba

bly

is th

e gr

eate

st c

halle

nge

that

I w

ork

with

on

a da

ily b

asis

.

!93

Prio

ritiz

ing

resp

onsi

ble

prac

tices

A

naly

zing

the

effe

cts o

f pra

ctic

es a

nd d

ivid

ing

reso

urce

s to

whe

re it

is n

eede

d H

&M

Th

is is

abo

ut m

akin

g th

e la

rge

and

good

initi

ativ

es sc

alab

le, b

ecau

se w

e ca

nnot

do

good

in a

so

calle

d ni

che-

mar

ket i

f we

wan

t to

mak

e a

real

impa

ct.

Prio

ritiz

ing

resp

onsi

ble

prac

tices

V

isua

lizin

g im

pact

thro

ugh

thor

ough

ana

lysi

s of y

our i

mpa

ct, e

.g.

thro

ugh

an L

CA

ana

lysi

s H

&M

If

you

take

a lo

ok a

t our

Life

Cyc

le A

naly

sis (

LCA)

of c

loth

ing,

tran

spor

t is a

min

imal

par

t of t

his.

How

ever

, pro

duci

ng c

loth

es o

r cot

ton

is e

xtre

mel

y re

sour

ce d

eman

ding

, and

ther

efor

e im

port

ant t

o fo

cus o

n. T

o ex

trac

t the

raw

mat

eria

l, m

akin

g it

into

fabr

ic, s

pinn

ing

the

fabr

ic, w

eavi

ng th

e fa

bric

an

d th

en p

rodu

ce th

e cl

othi

ng, d

eman

ds a

lot o

f res

ourc

es.

In g

ener

al, o

ne th

ird

of th

e LC

A im

pact

lies

in th

e pr

oduc

tion

of c

otto

n, o

ne th

ird

lies i

n th

e pr

oduc

tion

of th

e ph

ysic

al c

loth

ing,

and

one

thir

d is

con

nect

ed to

the

cons

umpt

ion

phas

e. H

ence

, it i

s m

ore

impo

rtan

t to

cons

ider

wha

t hap

pens

afte

r con

sum

ptio

n, fo

r exa

mpl

e w

hat y

ou d

o w

ith y

our

was

hing

mac

hine

at h

ome.

Ex

perim

enta

tion

The

cust

omer

val

ue p

ropo

sitio

n ca

n be

exp

erim

ente

d w

ith, i

n or

der f

or th

e of

ferin

g to

hav

e re

spon

sibl

e pr

actic

e at

tach

ed to

it

Stor

mbe

rg

We

try

to m

ake

our c

loth

es in

the

mos

t sus

tain

able

and

bes

t way

as p

ossi

ble.

We

also

try

to d

eliv

er

high

qua

lity

prod

ucts

, in

orde

r for

them

to la

st lo

nger

. In

addi

tion,

we

have

a re

turn

-bac

k po

licy

that

m

akes

it p

ossi

ble

for c

usto

mer

s to

deliv

er p

rodu

cts b

ack

to u

s, gi

ving

thes

e pr

oduc

ts a

“ne

w li

fe”.

W

hen

cust

omer

s ret

urn

som

ethi

ng b

ack,

they

rece

ive

cred

it. W

e th

eref

ore

focu

s on

that

cus

tom

ers

shou

ld p

urch

ase

with

aw

aren

ess.

Expe

rimen

tatio

n

Bef

ore

a re

spon

sibl

e pr

actic

e is

laun

ched

, exp

erim

enta

tion

of

diff

eren

t sol

utio

ns c

an, a

nd sh

ould

, be

used

St

orm

berg

W

e ar

e tr

ying

to c

arry

out

neg

otia

tions

that

will

resu

lt in

a fa

ir p

rice

on

the

prod

uct,

whi

ch a

lso

mak

es it

pos

sibl

e fo

r the

pro

duce

r to

rece

ive

a fa

ir p

aym

ent.

This

is im

port

ant i

n or

der f

or th

e pr

oduc

er to

pay

livi

ng w

ages

to th

eir e

mpl

oyee

s and

faci

litat

e pr

oper

wor

king

con

ditio

ns a

t the

fa

ctor

ies t

hat p

rodu

ce S

torm

berg

’s p

rodu

cts.

Ex

perim

enta

tion

Ther

e ar

e be

nefit

s con

nect

ed to

eng

agin

g cu

stom

ers.

Enga

gem

ent

need

s exp

erim

enta

tion,

in o

rder

to fi

nd so

urce

s for

invo

lvem

ent

H&

M

We

have

a lo

t mor

e to

gai

n fr

om e

ngag

ing

the

cons

umer

in a

fun,

mor

e hu

man

, jov

ial a

nd si

mpl

er

way

. We

have

to m

eet t

he c

usto

mer

s whe

re th

ey a

re. T

oday

, onl

y th

e “n

erds

” go

into

our

web

page

to

loca

te in

form

atio

n, a

nd th

ese

will

find

the

info

rmat

ion

rega

rdle

ss o

f cha

nnel

. My

goal

is to

reac

h al

l ki

nds o

f peo

ple,

not

onl

y th

e ne

rds.

Expe

rimen

tatio

n Fi

ndin

g so

lutio

ns fo

r pro

blem

s thr

ough

exp

erim

enta

tions

IK

EA

Solu

tions

wer

e fo

und

thro

ugh

cont

act w

ith g

loba

l and

loca

l org

aniz

atio

ns. W

e tr

ied

to im

prov

e th

e se

curi

ty, i

n or

der t

o en

sure

that

no

child

labo

r was

bei

ng u

sed

in th

e pr

oduc

tion.

Inte

grat

ion:

Del

iver

ing

a St

rate

gic

App

roac

h A

cyc

lical

app

roac

h C

halle

nge:

Ret

aile

rs d

o no

t fac

ilita

te th

e st

rate

gy a

ccor

ding

to a

pl

an

Gra

mst

ad

Ther

e is

mor

e ac

tion

than

act

ion

plan

. Com

pani

es ju

st d

o it,

but

they

hav

e no

del

iber

ate

stra

tegy

ar

ound

the

fact

that

“th

is is

our

soci

al re

spon

sibi

lity

- let

us b

uild

our

repu

tatio

n ar

ound

it”.

A sy

stem

atic

ap

proa

ch

To k

eep

track

on

the

prog

ress

it is

impo

rtant

to h

ave

a cl

ear p

lan

and

visi

on, t

o no

t be

side

track

ed a

long

the

way

IK

EA

I thi

nk it

is im

port

ant h

avin

g an

ow

n ba

se to

stan

d on

. Or e

lse

it is

qui

te e

asy

to e

nd u

p in

“on

e da

y th

e fo

cus i

s on

this

issu

e, a

nd th

e ne

xt d

ay th

e fo

cus i

s on

anot

her i

ssue

”.

A sy

stem

atic

ap

proa

ch

Hol

istic

app

roac

h di

vide

d in

four

mai

n st

rate

gic

area

s St

orm

berg

W

e ha

ve tr

ied

to h

ave

a ho

listic

app

roac

h. B

ut o

n a

gene

ral l

evel

we

have

div

ided

this

into

four

mai

n ar

eas,

whi

ch a

re: C

limat

e an

d en

viro

nmen

t, Et

hica

l tra

de, I

nclu

sive

em

ploy

men

t and

the

1 %

rule

, th

at is

, the

supp

ort w

e gi

ve to

oth

er h

uman

itari

an so

cial

pur

pose

s A

syst

emat

ic

appr

oach

Hol

istic

stra

tegy

with

thre

e ch

ange

driv

ers

IKEA

O

ur st

rate

gy, P

eopl

e &

Pla

net P

ositi

ve, i

s com

preh

ensi

ve a

nd p

retty

muc

h ill

ustr

ates

wha

t IK

EA d

oes

.[…]H

ere,

we

have

thre

e ch

ange

dri

vers

: “En

able

peo

ple

to li

ve a

mor

e su

stai

nabl

e lif

e at

hom

e”,

“Ene

rgy

and

reso

urce

- Be

com

ing

ener

gy a

nd re

sour

ce in

depe

nden

t” a

nd “

Bette

r life

for p

eopl

e an

d co

mm

uniti

es”.

[…] W

e al

so h

ave

a gl

obal

pro

ject

cal

led

the

“IK

EA F

ound

atio

n”. T

his f

ound

atio

n w

orks

with

glo

bal p

artn

ers,

for e

xam

ple

UN

ICEF

and

Sav

e th

e C

hild

ren.

A

syst

emat

ic

appr

oach

H

olis

tic a

ppro

ach

with

seve

n fo

cus a

reas

H

&M

W

e ha

ve d

ivid

ed o

ur fo

cus a

reas

into

seve

n gr

oups

. How

ever

, in

gene

ral t

here

are

two

core

are

as:

Taki

ng c

are

of p

eopl

e an

d th

e en

viro

nmen

t.

!94

Eval

uatio

ns

Follo

win

g re

gula

r eva

luat

ions

on

the

prog

ress

hel

ps th

e re

taile

r to

conc

eptu

aliz

e th

e tra

nsfo

rmat

ion

H&

M

We

rece

ive

a re

port

eve

ry q

uart

er, w

hich

show

s how

muc

h C

O2

that

has

bee

n us

ed. W

e al

so h

ave

clea

r goa

ls o

n ho

w m

uch

we

shou

ld c

olle

ct in

our

clo

thin

g-co

llect

ion

in st

ores

. Fur

ther

, we

mea

sure

th

e nu

mbe

r of e

mpl

oyee

s tha

t hav

e pa

rtic

ipat

ed in

our

onl

ine

cour

se o

n co

nsci

ousn

ess.

We

also

hav

e ta

rget

s on

how

em

ploy

ees a

nd c

usto

mer

s per

ceiv

e th

e le

vel o

f sus

tain

abili

ty a

t H&

M.

Eval

uatio

ns

Rev

isio

ns o

f the

cur

rent

stra

tegy

can

hel

p m

anag

ers t

o lo

cate

less

ef

ficie

nt p

ract

ices

IK

EA

We

had

two

revi

sion

s of t

he st

rate

gy. T

he fi

rst t

ime

was

in 2

013,

and

the

mos

t rec

ent w

as la

st su

mm

er.

Food

, for

exa

mpl

e, w

as p

oint

ed o

ut d

urin

g th

e se

cond

revi

sion

, as w

e un

ders

tood

that

food

has

a

cons

ider

able

impa

ct o

n ou

r bra

nd, t

he e

nvir

onm

ent a

nd p

eopl

e. H

ence

, we

mar

ked

this

fiel

d of

op

erat

ion

and

gave

it g

reat

er p

rior

ity a

nd fo

cus.

This

will

pro

babl

y ha

ppen

with

oth

er is

sues

in th

e fu

ture

. Our

stra

tegy

is a

lway

s ope

n fo

r new

add

ition

s.

Eval

uatio

ns

It is

nor

mal

to h

ave

eval

uatio

ns o

n em

ploy

ees c

once

rnin

g th

e re

spon

sibi

lity,

in o

rder

to q

uant

ify th

e ef

fect

H

&M

Ev

eryo

ne in

the

corp

orat

ion

are

mea

sure

d on

four

C’s

. The

se a

re c

ash,

cus

tom

er, c

olle

ague

s and

co

nsci

ousn

ess.

Hen

ce, b

eing

con

scio

us is

one

of t

he fo

ur p

illar

s we

are

bein

g m

easu

red

on. F

rom

w

hat I

hav

e se

en a

nd e

xper

ienc

ed, I

hav

e le

arne

d th

at th

ere

is a

nee

d to

qua

ntify

and

mea

sure

, in

orde

r to

get t

hing

s don

e.

Impl

emen

tatio

n: G

oing

from

A to

B

The

impo

rtan

ce o

f Ris

k A

sses

smen

ts

Freq

uenc

y

Ver

y fe

w h

ave

done

a ri

sk a

sses

smen

t con

nect

ed to

ext

erna

litie

s G

ram

stad

I a

m su

rpri

sed

that

ver

y fe

w h

ave

done

a ri

sk a

sses

smen

t. Ex

tern

al p

ress

ure

Easi

er to

crit

iciz

e re

taile

rs w

ho a

re c

omm

unic

atin

g ab

out t

heir

resp

onsi

ble

busi

ness

pra

ctic

es, h

ence

, man

y st

ay u

nder

the

rada

r to

avo

id th

e ris

k

Gra

mst

ad

I thi

nk m

any

reta

ilers

find

it c

omfo

rtab

le to

stay

und

er th

e ra

dar.

If co

mpa

nies

star

t to

com

mun

icat

e w

hat t

hey

are

doin

g, it

is e

asie

r to

criti

cize

them

for n

ot d

oing

eno

ugh.

We

can

for e

xam

ple

see

how

m

uch

criti

cal f

ocus

ther

e ha

s bee

n on

H&

M, a

nd th

ey a

re p

roba

bly

the

best

one

s in

the

indu

stry

. For

th

ese

reas

ons,

man

y co

mpa

nies

find

it c

omfo

rtab

le to

stay

out

of t

he ra

dar.

How

ever

, man

y co

mpa

nies

thin

k C

SR d

oes n

ot c

once

rn th

em.

Def

inin

g ris

k Th

e ris

k is

to n

ot d

o an

ythi

ng

H&

M

How

ever

, for

us,

the

risk

con

cern

s the

neg

ativ

e ef

fect

s of n

ot d

oing

any

thin

g ra

ther

than

doi

ng to

o m

uch.

Cus

tom

er p

erce

ptio

n A

ctiv

e an

d ef

ficie

nt c

omm

unic

atio

n to

get

rid

of u

nfor

tuna

te

asso

ciat

ions

H

&M

W

e sh

ould

wor

k be

tter w

ith sh

owin

g ou

r sus

tain

abili

ty w

ork.

Peo

ple

do n

ot n

orm

ally

thin

k th

at w

e ar

e do

ing

too

muc

h - w

e sh

ould

rath

er w

ork

with

effi

cien

t com

mun

icat

ion

show

ing

the

thin

gs w

e ar

e do

ing

wel

l.

Stak

ehol

der

perc

eptio

n B

eing

“re

spon

sibl

e” o

ften

mea

ns th

at th

e pu

blic

pla

ces i

nten

tions

on

reta

ilers

that

may

not

be

true

H

&M

I t

rave

l aro

und

the

coun

try

and

part

icip

ate

in p

anel

s. I g

ladl

y di

scus

s the

pat

h to

war

ds th

e so

lutio

ns,

but I

dis

like

it w

hen

peop

le p

lace

inte

ntio

ns o

n us

that

are

inco

rrec

t. To

exp

lain

, it i

s com

mon

that

pe

ople

per

ceiv

e us

as a

larg

e co

rpor

atio

n so

lely

focu

sing

on

earn

ing

mon

ey, a

nd n

ot ta

king

car

e of

th

e pe

ople

or t

he p

lane

t. Le

t us d

iscu

ss th

e so

lutio

ns, r

athe

r tha

n ta

lkin

g ab

out o

ur in

tent

ions

for u

s. Le

t us a

gree

on

the

visi

ons,

and

then

we

can

disa

gree

on

the

road

tow

ards

them

. St

akeh

olde

r pe

rcep

tion

Perc

eptio

ns m

ade

by st

akeh

olde

rs c

an b

e m

anag

ed b

y ac

tivel

y in

fluen

cing

them

, thr

ough

all

chan

nels

. For

reta

ilers

, thi

s is

espe

cial

ly d

one

thro

ugh

fron

t per

sonn

el in

stor

es

Stor

mbe

rg

Empl

oyee

s who

sell

our p

rodu

cts r

egul

arly

try

to a

cqui

re p

rodu

cts t

he v

alue

we

atta

ch to

them

, for

ex

ampl

e th

at th

ey a

re c

limat

e ne

utra

lized

and

that

we

have

an

activ

e et

hica

l fra

mew

ork.

[…] I

n th

is

way

em

ploy

ees a

re c

ontr

ibut

ing

in p

rom

otin

g St

orm

berg

’s p

ublic

imag

e. A

ll de

part

men

ts a

re

ther

efor

e ta

king

a p

ositi

on o

n th

is. T

hey

are

also

taki

ng a

pos

ition

tow

ards

this

in c

onta

ct w

ith th

ird

part

ies,

for e

xam

ple

in c

onta

ct w

ith su

pplie

rs, c

usto

mer

s and

oth

er p

artn

ers.

M

anag

ing

risk

The

risk

asse

ssm

ent c

once

rns t

he e

ntire

val

ue c

hain

, how

ever

, m

ost r

etai

lers

do

not o

wn

all o

f the

ir op

erat

ions

faci

litie

s. Th

us,

the

exte

rnal

par

tner

s nee

d to

be

on b

oard

H&

M

H&

M d

oes n

ot o

wn

the

entir

e va

lue

chai

n. A

cha

nge

as th

e on

e in

201

2, w

hen

we

mad

e ou

r sup

plie

r lis

t pub

lic, i

s a h

uge

proc

ess.

We

have

to g

o th

roug

h a

proc

ess l

ike

that

in c

oope

ratio

n w

ith o

ur

supp

liers

, to

ensu

re th

at th

ey a

re o

n bo

ard

with

such

cha

nge.

The

y m

ust b

e aw

are

of w

hat i

t mea

ns to

be

pla

ced

on th

is li

st.

Man

agin

g ris

k Tr

ansp

aren

cy is

a st

rate

gy fo

r red

ucin

g th

e ris

k of

unf

ortu

nate

fo

cus.

Usi

ng p

ublic

supp

lier l

ist a

s exa

mpl

e H

&M

M

oreo

ver,

tran

spar

ency

is a

cle

ar st

rate

gic

mov

e. O

ne c

an fo

r exa

mpl

e se

e th

e ef

fect

s of p

ublic

su

pplie

r lis

ts. T

his i

s als

o a

risk

ass

essm

ent,

whi

ch w

e co

nclu

ded

to h

avin

g a

net p

ositi

ve e

ffect

.

!95

Man

agin

g ris

k O

ne w

ay o

f man

agin

g ris

k is

to id

entif

y m

ain

chal

leng

es th

at

mus

t be

unde

r con

trol.

For m

any

reta

ilers

, thi

s con

cern

supp

ly

chai

n m

anag

emen

t

Stor

mbe

rg

With

in e

thic

al tr

ade

ther

e ar

e hu

ge c

halle

nges

. Esp

ecia

lly fo

r the

text

ile in

dust

ry. I

n ge

nera

l the

te

xtile

indu

stry

has

a v

ery

long

supp

ly c

hain

, with

a lo

t of t

he p

rodu

ctio

n pl

aced

in A

sia.

The

se su

pply

ch

ains

are

num

erou

s and

qui

te c

ompl

ex. I

t is a

lso

com

mon

to h

ave

a su

pply

cha

in th

at c

hang

es,

whi

ch m

akes

it h

ard

to o

btai

n an

d ga

in c

ontr

ol o

ver i

t.

Man

agin

g ris

k Le

adin

g a

holis

tic v

iew

of r

espo

nsib

le p

ract

ices

mak

es th

e re

taile

rs fo

cus o

n, n

ot o

nly

thei

r bra

nd im

age,

but

als

o th

eir

effe

cts o

n ot

her p

artie

s thr

ough

out t

heir

valu

e ch

ain

IKEA

It

is c

lear

that

hav

ing

supp

liers

in o

ther

cou

ntri

es, f

or e

xam

ple

in A

sia,

can

resu

lt in

som

e ch

alle

nges

. In

Chi

na, f

or e

xam

ple,

ther

e ha

s bee

n so

me

issu

es c

once

rnin

g w

ork

hour

s. W

e ha

ve re

cent

ly b

een

wor

king

with

redu

cing

the

wor

k ho

urs.

We

deci

ded

that

the

hour

s sho

uld

not e

xcee

d 60

hou

rs p

er

wee

k, a

nd la

ter w

e re

duce

d th

is li

mit

to 4

8 ho

urs p

er w

eek.

Thi

s is o

bvio

usly

pos

itive

. How

ever

, it

beco

mes

a p

robl

em w

hen

the

cons

eque

nce

is th

at th

e w

orke

rs e

arn

less

mon

ey, a

nd a

re th

eref

ore

natu

rally

aga

inst

it. T

heir

goa

l is t

o w

ork

as m

uch

as p

ossi

ble,

dur

ing

a sh

ort p

erio

d of

tim

e, in

ord

er

to p

rovi

de fo

r the

ir fa

mili

es. W

hen

IKEA

. on

the

othe

r han

d. d

ecid

es to

redu

ce th

eir l

egal

am

ount

of

wor

k du

ring

a w

eek,

it b

ecom

es a

cha

lleng

e. D

ue to

this

cha

lleng

e w

e ha

ve m

anag

ed to

incr

ease

the

sala

ry th

ough

, in

orde

r to

mak

e it

poss

ible

for t

he w

orke

rs to

ear

n an

equ

al sa

lary

, with

less

wor

king

ho

urs.

M

anag

ing

risk

Man

agin

g ris

k to

secu

re th

at su

pplie

rs fo

llow

stan

dard

s (su

pply

ch

ain

man

agem

ent)

IKEA

C

ode

of C

ondu

ct, o

r IW

AY, a

s we

call

it to

day.

The

se a

re re

quir

emen

ts th

at w

e ar

e de

man

ding

our

su

pplie

rs to

follo

w, a

nd c

once

rn re

quir

emen

ts re

gard

ing

envi

ronm

ent a

nd w

orki

ng c

ondi

tions

, for

ex

ampl

e th

e pr

ohib

ition

of c

hild

labo

r. R

isk

asse

ssm

ent

The

asse

ssm

ent o

f a su

pply

cha

in is

abo

ut a

lloca

tion

of th

e ris

k fa

ctor

s. Th

is m

ay le

ad to

seve

ral f

acto

rs id

entif

ied,

whe

re a

ll ne

eds t

o be

dea

lt w

ith

IKEA

In

gen

eral

I be

lieve

that

supp

ly c

hain

man

agem

ent i

s the

gre

ates

t cha

lleng

e. F

or e

xam

ple,

we

do

real

ize

that

we

need

to g

o fu

rthe

r up

the

supp

ly c

hain

in o

rder

to e

nsur

e th

at o

ur fo

od is

cor

rect

ly

prod

uced

. It c

an b

e qu

ite c

ompl

ex th

ough

, as t

here

are

a lo

t of r

esou

rces

requ

ired

in o

rder

to c

reat

e th

is tr

ansp

aren

cy, a

nd th

ere

is a

nee

d fo

r kno

wle

dge

abou

t ani

mal

wel

fare

, for

inst

ance

. It i

s no

long

er a

n op

tion

to b

lam

e so

me

othe

r bra

nd o

r sup

plie

r tha

t is d

eliv

erin

g yo

ur p

rodu

cts,

ther

e is

a

need

for s

ome

sort

of e

xter

nal c

ontr

ol fr

om y

our e

nd th

roug

hout

the

chai

n.

Ris

k as

sess

men

t N

ew o

pera

tions

mus

t be

alig

ned

with

the

resp

onsi

ble

stra

tegy

to

elim

inat

e ris

k H

&M

Fi

rstly

we

deci

de w

heth

er o

r not

to e

nter

Eth

iopi

a at

all.

Thi

s act

ually

requ

ires

two

year

s of

anal

ytic

al w

ork,

in o

rder

to g

athe

r suf

ficie

nt in

form

atio

n on

diff

eren

t asp

ects

. Wha

t are

the

grea

test

ri

sks?

Wha

t cha

lleng

es a

re w

e fa

cing

? H

ow is

this

don

e in

pra

ctic

e? F

or e

xam

ple,

Eth

iopi

a do

es n

ot

have

a m

inim

um w

age

rate

, how

shou

ld th

is th

en b

e de

cide

d? W

hat i

s the

livi

ng w

age?

Wha

t sho

uld

we

use

as a

ben

chm

ark?

The

mai

n po

int i

s, ou

r eva

luat

ion

conc

erns

eve

ry a

spec

t.

The

Impo

rtan

ce o

f Man

agem

ent S

uppo

rt

Exec

utiv

e m

anag

emen

t A

crit

ical

reso

urce

is m

anag

emen

t com

mitm

ent,

and

broa

d in

volv

emen

t of e

mpl

oyee

s G

ram

stad

M

anag

emen

t com

mitm

ent.

Hav

ing

som

eone

that

is re

spon

sibl

e fo

r tha

t are

a, b

road

invo

lvem

ent o

f em

ploy

ees,

and

expe

rtis

e. In

add

ition

to b

eing

abl

e to

see

wha

t CSR

can

lead

to, b

ecau

se a

lot o

f thi

s is

not

eas

y to

mea

sure

at t

he b

otto

m li

ne. F

or e

xam

ple,

goo

d re

puta

tion

and

prid

e am

ong

empl

oyee

s Ex

ecut

ive

man

agem

ent

Whe

ther

or n

ot C

SR is

on

the

com

pany

’s a

gend

a is

up

to th

e le

ader

G

ram

stad

I a

lso

belie

ve th

at it

is u

p to

the

lead

er, w

heth

er o

r not

CSR

is o

n th

e co

mpa

ny’s

age

nda.

Thi

s is t

he

resp

onsi

bilit

y of

a le

ader

. In

this

are

a, I

belie

ve le

ader

s hav

e a

huge

pot

entia

l of i

mpr

ovem

ent i

n un

ders

tand

ing

that

ther

e ar

e m

any

bene

fits t

o be

gai

ned.

For

exa

mpl

e th

roug

h be

tter r

eput

atio

n.

Exec

utiv

e m

anag

emen

t Th

e C

EO sh

ould

be

both

pas

sion

ate

and

will

ing

to m

ake

nece

ssar

y in

vest

men

ts

H&

M

I thi

nk it

is e

ssen

tial t

o ha

ve a

top

lead

er th

at is

real

ly d

edic

ated

and

pas

sion

ate

abou

t thi

s, an

d th

at is

w

illin

g to

mak

e th

e ne

cess

ary

inve

stm

ents

.

Exec

utiv

e m

anag

emen

t Fo

r a c

hang

e in

min

dset

, lea

ders

mus

t fun

ctio

n as

ena

bler

s for

ch

ange

IK

EA

Sign

als f

rom

lead

ers a

re im

port

ant f

or a

furt

her c

hang

e in

min

dset

, see

ing

that

thes

e in

divi

dual

s tak

e fo

rm a

s “en

able

rs”

in o

rder

to e

nsur

e th

at su

stai

nabi

lity

is c

orre

ctly

impl

emen

ted.

For

this

to h

ave

an

effe

ct it

requ

ires

man

ager

s to

activ

ely

com

mun

icat

e an

d sh

ow th

is in

pra

ctic

e.

Exec

utiv

e m

anag

emen

t D

iscu

ssio

n at

boa

rd le

vel i

s of i

mpo

rtanc

e IK

EA

Sust

aina

bilit

y is

als

o a

cent

ral a

rea

for d

iscu

ssio

n at

all

boar

d m

eetin

gs.

CSR

Res

pons

ible

Th

e co

mpa

nies

hav

ing

a C

SR re

spon

sibl

e, o

r CSR

team

, hav

e co

me

a lo

ng w

ay

Gra

mst

ad

Ther

e ar

e fe

w c

ompa

nies

that

hav

e th

eir o

wn

empl

oyee

s who

are

resp

onsi

ble

for C

SR. O

f tho

se

com

pani

es w

ho h

ave

it, it

var

ies i

f the

y ar

e pl

aced

in th

e co

mm

unic

atio

n de

part

men

t or i

n th

e

!96

man

agem

ent.

Or i

f it i

s in

oper

atio

ns. A

nd a

gain

, it v

arie

s in

how

man

y be

nefit

s tha

t are

gai

ned

from

C

SR.

CSR

resp

onsi

ble

Effic

ient

use

of e

mpl

oyee

s: T

eam

s lea

ding

the

chan

ge, m

iddl

e m

anag

ers,

expe

rts in

the

field

, etc

H

&M

W

e ar

e al

so fo

rtun

ate

that

we

have

a la

rge

depa

rtm

ent i

n St

ockh

olm

, with

ded

icat

ed p

erso

ns d

ivid

ed

on e

ach

coun

try.

I be

lieve

that

this

is a

n im

port

ant r

esou

rce

for u

s, an

d cr

itica

l for

us i

n or

der t

o re

ach

our g

oals

. […

] Th

is te

am c

onsi

sts o

f exp

erts

in th

e fie

ld, a

nd th

ey a

lloca

te d

iffer

ent p

roce

sses

. En

able

rs

The

impo

rtanc

e of

an

enga

ged

and

pass

iona

te so

ul in

tegr

atin

g C

SR

Gra

mst

ad

Ofte

n w

e se

e th

at th

ere

is o

ne p

assi

onat

e so

ul, o

ften

a yo

ung

wom

an th

at is

con

cern

ed w

ith C

SR a

nd

is li

fting

this

up.

How

ever

, if t

his p

erso

n qu

its th

en th

e en

gage

men

t sto

ps. I

bel

ieve

that

in th

is a

rea,

a

com

pany

is d

epen

dent

on

som

eone

that

is c

onst

antly

look

ing

afte

r and

pus

hing

, and

get

s CSR

in

tegr

ated

, and

not

dis

inte

grat

ed.

Enab

lers

C

o-w

orke

rs th

roug

hout

the

com

pany

as e

nabl

ers

IKEA

Le

ader

ship

is im

port

ant [

for s

igna

l effe

ct].

It do

es n

ot n

eces

sari

ly h

ave

to b

e fo

rmal

ized

by

exec

utiv

e m

anag

ers t

alki

ng a

bout

sust

aina

bilit

y, it

mig

ht a

s wel

l be

info

rmal

setti

ngs l

ed b

y ot

her c

o-w

orke

rs.

The

Impo

rtan

ce o

f a R

espo

nsib

le M

inds

et a

s par

t of t

he C

ultu

re

Res

ista

nce

Stru

ctur

al c

hang

es le

ad to

inte

rnal

resi

stan

ce fo

r cha

nge

due

to

esta

blis

hed

min

dset

s H

&M

St

ruct

ural

cha

nges

are

alw

ays p

rese

nt in

such

pro

cess

es. I

t is n

atur

al th

at c

hang

es c

reat

e in

tern

al

proc

esse

s, w

hich

in tu

rn c

reat

es so

me

resi

stan

ce. N

ever

thel

ess,

we

are

very

luck

y in

hav

ing

such

a

dedi

cate

d C

EO, w

hich

is o

f hug

e im

port

ance

whe

n de

alin

g w

ith in

tern

al st

akeh

olde

rs.

Acc

ount

abili

ty

Igno

ranc

e of

acc

ount

abili

ty a

s a c

halle

nge

H

&M

I b

elie

ve th

at th

is is

an

ongo

ing

proc

ess i

n m

any

way

s. H

avin

g su

ch a

larg

e de

part

men

t wor

king

with

su

stai

nabi

lity,

mak

es it

eas

y fo

r oth

ers t

o be

lieve

that

sust

aina

bilit

y is

sues

are

bei

ng ta

ken

care

of.

For e

xam

ple

by th

inki

ng “

that

is th

eir f

ield

, tha

t doe

sn’t

conc

ern

me”

. […

] Our

pra

ctic

e of

wor

king

on

seve

ral l

evel

s is a

lso

chal

leng

ing.

Try

ing

to m

ake

ever

yone

acc

ount

able

for o

ur p

ract

ice

is a

ch

alle

nge.

Eve

ryon

e is

a p

iece

of t

he p

uzzl

e th

at w

e ne

ed to

solv

e in

ord

er to

impr

ove

our r

espo

nsib

le

prac

tices

. We

have

man

y m

essa

ges a

nd m

any

goal

s we

wan

t to

achi

eve.

Con

sequ

ently

, thi

s is a

n on

goin

g an

d lo

ng p

roce

ss.

Acc

ount

abili

ty

Inco

rpor

atin

g ac

coun

tabi

lity

in v

alue

s and

bus

ines

s con

cept

St

orm

berg

Ev

eryo

ne h

as to

rela

te to

thes

e th

ings

, whe

ther

one

is a

n em

ploy

ee a

t a st

ore,

at a

war

ehou

se o

r sto

ck,

or a

t the

hea

dqua

rter

. Thi

s is c

lear

in o

ur v

alue

doc

umen

t. Th

ere

lies a

cle

ar v

isio

n an

d cl

ear c

ore

valu

es th

at e

very

one

has t

o re

late

to. S

usta

inab

ility

and

the

busi

ness

mod

el th

at S

torm

berg

wor

ks

afte

r are

cle

arly

pre

sent

ed.

Acc

ount

abili

ty

Impl

emen

ting

valu

es in

the

targ

ets f

or th

e en

tire

corp

orat

ion

IK

EA

How

ever

, we

are

cert

ain

that

such

min

dset

is q

uite

inte

grat

ed in

our

org

aniz

atio

nal c

ultu

re. W

e ha

ve

thes

e va

lues

impl

emen

ted

in th

e ta

rget

s for

the

entir

e co

rpor

atio

n. E

very

body

is a

par

t of t

his

prog

ram

, reg

ardl

ess o

f the

ir fu

nctio

n, a

nd w

e al

l bea

r the

resp

onsi

bilit

y fo

r the

se ta

rget

s to

be

achi

eved

. A

ccou

ntab

ility

In

tegr

atio

n su

stai

nabi

lity

in jo

b de

scrip

tion

IK

EA

Sust

aina

bilit

y is

pre

sent

in th

e jo

b de

scri

ptio

n, in

som

e w

ay o

r ano

ther

Enga

gem

ent

Sust

aina

bilit

y as

an

inte

grat

ed m

inds

et in

the

orga

niza

tiona

l cu

lture

IK

EA

Whe

n it

com

es to

mot

ivat

ion

for s

peci

fical

ly b

eing

sust

aina

ble

or re

spon

sibl

e th

ese

are

not

impl

emen

ted

in th

e K

PI’s

. How

ever

, we

are

cert

ain

that

such

min

dset

is q

uite

inte

grat

ed in

our

or

gani

zatio

nal c

ultu

re.

Enga

gem

ent

Setti

ng g

oals

can

be

enga

ging

, and

setti

ng th

e go

al to

a 1

00%

cr

eate

s a v

olun

tary

spiri

t and

will

lead

to a

mor

e su

cces

sful

pr

actic

e

IKEA

O

ur w

ay o

f set

ting

goal

s is o

ften

to “

go a

ll in

n”, n

amel

y th

at o

ur g

oal i

s to

deliv

er o

ne h

undr

ed p

er

cent

. Eve

n th

ough

this

mig

ht n

ot b

e re

alis

tic in

pra

ctic

e, w

e se

t our

goa

ls th

is w

ay b

ecau

se it

cre

ates

en

ergy

and

eng

agem

ent.

If w

e re

ach

98 %

it is

a fa

ntas

tic a

chie

vem

ent r

egar

dles

s of o

ur g

oal,

an

achi

evem

ent t

hat w

ould

nev

er h

ave

been

reac

hed

if ou

r goa

l was

75

%. T

his c

an b

e co

mpa

red

to

volu

ntar

y w

ork

in lo

cal c

omm

uniti

es, w

here

eve

ryon

e ga

ther

s to

wor

k to

geth

er fr

ee o

f cha

rge.

In su

ch

a si

tuat

ion,

eve

ryon

e ha

s to

part

icip

ate

in o

rder

for t

his t

o fu

nctio

n. W

ith a

n en

d go

al o

f 80

% it

is n

ot

base

d on

vol

unte

ers d

rivi

ng th

e tr

ansf

orm

atio

n an

ymor

e.

!97

Kno

wle

dge

Impo

rtanc

e of

shar

ing

know

ledg

e w

ith e

mpl

oyee

s H

&M

M

y ro

le is

to c

omm

unic

ate

with

our

em

ploy

ees i

n st

ores

. Thi

s is e

xtre

mel

y im

port

ant f

or u

s. Th

e st

ore

is w

here

we

deliv

er o

ur b

rand

. Our

ann

ual s

usta

inab

ility

repo

rt h

as n

o ef

fect

if e

mpl

oyee

s at s

tore

s do

not h

ave

insi

ght i

nto

wha

t sus

tain

abili

ty is

, if t

hey

mer

ely

say,

“W

hat,

sust

aina

bilit

y? N

ever

hea

rd

abou

t it”

K

now

ledg

e In

crea

sing

kno

wle

dge

thro

ugh

e-co

urse

s H

&M

W

e ha

ve a

man

dato

ry e

-cou

rse:

“C

onsc

ious

for B

egin

ners

”.

Kno

wle

dge

Add

ress

one

or t

wo

curr

ent s

usta

inab

ility

issu

es a

t mee

tings

IK

EA

Rath

er, w

e m

ust,

in m

eetin

gs a

ddre

ss o

ne o

r tw

o co

ntem

pora

ry is

sues

in o

rder

to c

reat

e or

incr

ease

th

e aw

aren

ess.

The

fron

t per

sonn

el, f

or e

xam

ple

in th

e ki

tche

n de

part

men

t, th

ey n

eed

know

ledg

e ab

out s

avin

g en

ergy

, or d

own

to th

e pr

oduc

tion

leve

l of a

car

pet.

We

can

defin

itely

impr

ove

awar

enes

s and

the

leve

l of k

now

ledg

e th

roug

hout

our

cha

in.

Kno

wle

dge

The

impo

rtanc

e of

incr

easi

ng k

now

ledg

e am

ong

fron

t per

sonn

el

H&

M

A hu

ge c

halle

nge,

esp

ecia

lly in

the

reta

il in

dust

ry, i

s com

mun

icat

ing

and

reac

hing

out

to a

ll of

our

em

ploy

ees.

Ther

e is

a la

ck o

f way

s to

conn

ect w

ith o

ur e

mpl

oyee

s. M

eanw

hile

, cus

tom

ers a

re

incr

easi

ngly

eng

agin

g in

CSR

issu

es. M

y jo

b is

ther

efor

e to

eng

age

empl

oyee

s wor

king

in o

ur st

ores

. O

ur e

mpl

oyee

s sho

uld

have

insi

ght i

n al

l of o

ur w

ork

with

CSR

and

sust

aina

bilit

y M

inds

et

Inte

grat

e a

resp

onsi

ble

min

dset

am

ong

empl

oyee

s, as

em

ploy

ees

are

the

stro

nges

t res

ourc

e IK

EA

Empl

oyee

s are

the

ones

who

hav

e to

car

ry o

ut th

e w

ork,

and

if th

ey d

o no

t per

ceiv

e th

is a

s im

port

ant

or c

orre

ct, t

hen

we

are

not h

eade

d an

ywhe

re.

Min

dset

Tr

ansf

orm

ing

the

busi

ness

con

cept

and

vis

ion

can

lead

to a

n ov

eral

l cha

nge

in m

inds

et, o

n ho

w p

riorit

ies a

re m

ade

H&

M

At o

ne p

oint

we

had

a m

ajor

cha

nge,

that

in m

any

way

s can

app

ear a

s a sy

mbo

lic c

hang

e. N

amel

y th

at w

e in

tegr

ated

sust

aina

bilit

y in

to o

ur b

usin

ess c

once

pt. P

revi

ousl

y w

e st

ated

that

: We

deliv

er

fash

ion

and

qual

ity fo

r the

bes

t pri

ce. N

ow h

owev

er, w

e ha

ve c

hang

ed th

is to

: We

deliv

er fa

shio

n an

d qu

ality

for t

he b

est p

rice

, in

a su

stai

nabl

e w

ay.

Min

dset

A

min

dset

focu

sing

on

CSR

bec

omes

an

impo

rtant

reso

urce

St

orm

berg

C

onsi

deri

ng th

at C

R ha

s bee

n fir

mly

root

ed th

roug

hout

the

orga

niza

tion,

from

top

to b

otto

m, t

his h

as

beco

me

a la

rge

reso

urce

. Thi

s is a

lso

som

ethi

ng w

e ca

n us

e in

all

part

s of t

he b

usin

ess,

whe

ther

it is

im

age

build

ing,

stre

amlin

ing

oper

atio

ns, c

ost c

uttin

g, o

r mak

ing

the

wor

ld b

ette

r for

a lo

t of p

eopl

e. I

abso

lute

ly b

elie

ve th

is is

one

of t

he la

rges

t res

ourc

es th

at w

e ha

ve, b

eyon

d hu

man

reso

urce

s.

Min

dset

A

n in

tern

al d

rive

from

man

agem

ent a

nd e

mpl

oyee

s IK

EA

It co

mes

inte

rnal

ly fr

om b

oth

the

man

agem

ent a

nd th

e em

ploy

ees,

how

ever

, at I

KEA

ther

e is

littl

e di

ffere

nce

betw

een

man

agem

ent a

nd e

mpl

oyee

s. W

e ar

e al

l cow

orke

rs w

ith a

qui

te fl

at st

ruct

ure.

Em

ploy

ees a

re e

xpec

ting

us to

take

resp

onsi

bilit

y, a

nd th

ey o

ften

wan

t to

part

icip

ate

in ta

king

re

spon

sibi

lity.

The

man

agem

ent i

s als

o an

impo

rtan

t dri

ver,

and

they

und

erst

and

that

this

is a

bout

th

inki

ng in

long

-term

s. M

inds

et

Bas

ic fo

unda

tion

for p

riorit

izin

g re

spon

sibi

lity

mus

t be

set,

so

that

new

idea

tion

proc

esse

s can

be

solv

ed m

ore

effe

ctiv

ely

IK

EA

The

basi

c fo

unda

tion

for p

rior

itizi

ng c

orre

ct is

alw

ays p

rese

nt, t

o do

the

righ

t thi

ng is

root

ed in

our

or

gani

zatio

n. C

onse

quen

tly, w

hen

we

com

e up

with

new

idea

s and

pla

ns it

is a

ll ab

out e

xpla

inin

g th

e pr

actic

e an

d pi

tchi

ng in

that

thes

e pl

ans a

re g

ood,

not

onl

y fo

r IK

EA’s

ope

ratio

ns, b

ut fo

r our

co

mm

erci

al b

rand

and

the

plan

et w

e liv

e on

. M

inds

et

Idea

l min

dset

: Per

ceiv

ing

resp

onsi

ble

busi

ness

pra

ctic

es a

s lon

g-te

rm in

vest

men

ts, r

athe

r tha

n co

sts

IKEA

So

met

imes

, it c

an b

e ha

rd to

gai

n co

mm

erci

al a

nd fi

nanc

ial b

enef

its in

a sh

ort p

erio

d of

tim

e, it

is

ofte

n ra

ther

an

incr

ease

d co

st. T

here

fore

, our

min

dset

is to

look

at s

uch

new

pra

ctic

es a

nd st

rate

gic

plan

s as i

nves

tmen

ts ra

ther

than

cas

h flo

ws o

f cos

ts, i

n or

der t

o le

t the

inve

stm

ents

hav

e an

incr

ease

d tim

e fo

r fut

ure

pay

offs

. Pr

ide

Prid

e am

ong

empl

oyee

s as a

con

sequ

ent o

f lea

ding

a re

spon

sibl

e co

mpa

ny

H&

M

To b

e an

attr

activ

e em

ploy

er a

nd a

n at

trac

tive

wor

kpla

ce. I

per

sona

lly, w

ould

not

like

to w

ork

only

to

mak

e a

wea

lthy

man

eve

n w

ealth

ier.

I wan

t to

feel

that

I am

par

t of t

he ri

ght t

eam

.

Prid

e In

crea

sed

prid

e am

ong

empl

oyee

s whe

n th

ey c

an p

artic

ipat

e in

pr

oces

ses

Gra

mst

ad

[…] p

ride

am

ong

empl

oyee

s. W

e ha

ve se

en se

vera

l exa

mpl

es o

f thi

s, w

hen

empl

oyee

s are

abl

e to

take

pa

rt in

wha

t the

com

pany

doe

s, th

ey g

et e

ngag

ed a

nd p

roud

. It i

s cle

ar th

at th

is in

crea

ses t

he

prod

uctiv

ity in

the

com

pany

. It i

s the

sam

e cr

itica

l fac

tor a

s in

any

othe

r pro

ject

or c

hang

e pr

oces

s, yo

u ne

ed c

omm

itmen

t. Pr

ide

Incr

ease

d pr

ide

and

feel

ing

of o

wne

rshi

p am

ong

empl

oyee

s whe

n th

ey c

an p

artic

ipat

e in

pro

cess

es a

nd d

ecis

ions

IK

EA

The

man

ager

s at t

he w

areh

ouse

s kno

w th

at th

ey c

an e

ncou

rage

cow

orke

rs to

com

e up

with

idea

s on

impr

ovem

ents

, whi

ch a

lso

appl

ies t

o su

stai

nabi

lity.

!98

The

Impo

rtan

ce o

f Org

aniz

atio

nal C

hang

e Pr

oces

s vie

w

The

CSR

-pyr

amid

show

s how

com

pani

es a

re st

rugg

ling

to fu

lly

shift

thei

r mod

els

Gra

mst

ad

Ther

e is

a C

SR-p

yram

id c

onsi

stin

g of

thre

e le

vels

. Lev

el o

ne is

com

plyi

ng w

ith ru

les a

nd re

gula

tions

, le

vel t

wo

is a

bout

usi

ng C

SR a

s rep

utat

ion

and

com

mun

icat

ion,

and

leve

l thr

ee is

abo

ut u

sing

CSR

as

a st

rate

gic

driv

er fo

r the

bus

ines

s. M

any

com

pani

es a

re st

rugg

ling

with

just

bei

ng a

t the

firs

t lev

el,

com

plyi

ng w

ith ru

les a

nd re

gula

tions

. Pr

oces

s vie

w

The

stai

rway

for b

usin

ess m

odel

inno

vatio

n st

arts

with

inte

rnal

pr

oces

ses a

nd e

nds w

ith B

MI

Gra

mst

ad

The

sust

aina

ble

busi

ness

mod

el-s

tair

way

: The

firs

t ste

p is

abo

ut w

hat y

ou d

o in

tern

ally

, the

seco

nd

step

is a

bout

how

you

can

impa

ct p

rodu

cers

, and

the

top

is a

bout

how

you

act

ually

cha

nge

your

bu

sine

ss m

odel

. For

exa

mpl

e, le

asin

g pr

oduc

ts in

stea

d of

selli

ng, i

n or

der t

o us

e le

ss re

sour

ces.

Proc

ess v

iew

Im

porta

nce

of p

atie

nce

in a

BM

I pro

cess

IK

EA

Cer

tain

issu

es re

quir

e a

long

er ti

mef

ram

e fo

r obt

aini

ng re

sults

, it i

s not

pos

sibl

e to

do

ever

ythi

ng a

t on

ce.

Proc

ess v

iew

So

me

com

pani

es h

ave

inco

rpor

ated

the

resp

onsi

ble

visi

on in

to

the

busi

ness

con

cept

from

the

star

t, an

d th

eref

ore

grow

with

the

visi

on

Stor

mbe

rg

I thi

nk o

ur c

ore

activ

ities

hav

e be

en sh

aped

to a

cer

tain

deg

ree.

How

ever

, con

side

ring

that

we

have

gr

own

with

the

stra

tegy

, the

gro

wth

has

hap

pene

d na

tura

lly. W

hen

our f

irst

stor

e op

ened

and

we

expa

nded

, the

re w

ere

exte

rnal

ow

ners

. In

rece

nt y

ears

, how

ever

, we

have

shift

ed to

war

ds o

wni

ng o

ur

own

stor

es. W

e no

w h

ave

muc

h m

ore

cont

rol o

ver t

hat p

art o

f the

bus

ines

s, co

nsid

erin

g th

at w

e no

w

have

all

our e

mpl

oyee

s int

egra

ted

in o

ur o

wn

orga

niza

tion.

Thi

s has

bee

n qu

ite a

ffect

ed b

y ou

r st

rate

gy. O

ur in

clus

ive

wor

kpla

ce-p

olic

y ha

s als

o be

en li

fted

by th

is. W

e ha

ve a

sign

ifica

nt p

ress

ure

on th

is p

olic

y th

roug

hout

the

orga

niza

tion.

Pr

oces

s vie

w

Cha

ngin

g al

l fac

ilitie

s acc

ordi

ng to

the

resp

onsi

ble

visi

on is

a

proc

esse

s tha

t nee

ds b

e ca

rrie

d ou

t, in

ord

er fo

r a c

ompa

ny to

re

ach

a hi

gher

deg

ree

of re

spon

sibi

lity

IKEA

Th

e se

cond

one

con

cern

s “En

ergy

and

reso

urce

” or

“be

com

ing

ener

gy a

nd re

sour

ce in

depe

nden

t”.

This

are

a is

hug

e, b

ecau

se it

con

cern

s eve

ryth

ing,

from

use

of r

aw m

ater

ials

to h

ow o

ur w

areh

ouse

s ar

e op

erat

ed. T

he m

ain

focu

s is o

n en

ergy

, and

our

goa

l is t

o be

ene

rgy

inde

pend

ent b

y 20

20. T

his

mea

ns th

at w

e ar

e go

ing

to p

rodu

ce a

s muc

h en

ergy

as w

e co

nsum

e. W

e ca

n no

t hav

e w

ind

pow

er

plan

ts in

our

war

ehou

ses,

but w

e ha

ve in

vest

ed a

lot i

n w

ind

pow

er p

lant

s all

over

the

wor

ld. I

n th

e N

ordi

c co

untr

ies w

e ar

e en

ergy

inde

pend

ent.

We

have

a w

ind

pow

er p

lant

in S

wed

en w

hich

pro

duce

s th

e eq

ual a

mou

nt o

f ene

rgy

that

we

spen

d in

IKEA

Nor

dic

(Nor

way

, Sw

eden

, Den

mar

k an

d Fi

nlan

d).

[…] A

ccor

ding

to th

e pr

ogno

sis,

we

are

on a

goo

d pa

th to

war

ds re

achi

ng o

ur g

oal c

once

rnin

g en

ergy

in

depe

nden

cy. I

KEA

has

aro

und

380

war

ehou

ses a

roun

d th

e w

orld

, in

addi

tion

we

have

fact

orie

s, th

at is

, our

ow

n IK

EA fa

ctor

ies w

hich

pro

duce

aro

und

ten

per c

ent o

f our

furn

iture

. Thi

s is c

alle

d “I

KEA

indu

stry

”. O

ur o

wn

fact

orie

s are

par

t of t

his g

oal.

This

mea

ns th

at th

ere

are

man

y un

its, a

nd a

hu

ge a

mou

nt o

f ene

rgy

that

nee

ds to

be

rene

wab

le.

Stru

ctur

e: V

alue

ch

ain

Hav

ing

a re

al im

pact

on

prod

ucer

s tha

t are

mor

e co

ncer

ned

with

pr

ofit

is v

ery

chal

leng

ing.

Whi

ch le

ads t

o a

feel

ing

of

pow

erle

ssne

ss a

nd d

iscl

aim

er

Gra

mst

ad

Man

y ha

ve e

xper

ienc

ed th

at it

is c

halle

ngin

g to

hav

e an

impa

ct o

n th

e pr

oduc

er a

nd th

at it

is u

p to

th

e pr

oduc

er to

take

resp

onsi

bilit

y fo

r it.

Man

y re

taile

rs c

laim

that

they

are

onl

y pu

rcha

sing

a sm

all

amou

nt o

f wha

t the

pro

duce

r is p

rodu

cing

, whi

ch in

turn

mea

ns th

at th

ey h

ave

no im

pact

on

the

desi

gn o

f the

pro

duct

or h

ow th

e pr

oduc

t is p

rodu

ced.

I be

lieve

it p

roba

bly

is a

feel

ing

of

pow

erle

ssne

ss a

nd d

iscl

aim

er.

Stru

ctur

e: V

alue

ch

ain

Cha

ngin

g su

pplie

rs is

not

nec

essa

rily

easi

ly d

one,

it is

ther

efor

e a

proc

ess t

hat n

eeds

atte

ntio

n an

d re

quire

s pat

ienc

e IK

EA

Anot

her c

halle

nge

is th

at w

e ar

e de

pend

ent o

n ou

r sup

plie

rs a

nd th

ose

who

are

with

us c

ultiv

atin

g fo

rest

s, sa

lmon

, or s

imila

r. Th

ese

supp

liers

als

o ne

ed to

be

a pa

rt o

f thi

s jou

rney

. Som

etim

es it

mig

ht

even

be

a w

hole

indu

stry

, whe

re w

e ar

e re

lativ

ely

smal

l, an

d it

can

be fr

ustr

atin

g th

at it

is n

ot

poss

ible

to c

arry

out

cha

nges

as f

ast a

s we

desi

re. W

e th

eref

ore

need

to le

ad su

ch p

roce

sses

with

pa

tienc

e.

Stru

ctur

e:

Val

ue c

hain

M

any

com

pani

es a

re ta

cklin

g th

e ch

alle

nge

conc

erni

ng th

e va

lue

chai

n by

mak

ing

the

valu

e ch

ain

shor

ter,

impl

ying

a st

rong

er

cont

rol

Gra

mst

ad

I thi

nk m

ost c

ompa

nies

are

tryi

ng to

mak

e th

eir v

alue

cha

ins s

hort

er. P

rinc

ess,

for e

xam

ple,

is

wor

king

on

gath

erin

g th

e w

hole

pro

duct

ion

proc

ess i

n on

e fa

ctor

y. T

he p

roce

ss o

f col

orin

g co

tton

to

a fin

ishe

d to

wel

. Thi

s giv

es th

em g

reat

er c

ontr

ol o

ver t

he p

roce

ss. .

H&

M a

nd IK

EA a

re a

lso

wor

king

w

ith re

duci

ng th

e nu

mbe

r of s

uppl

iers

, in

orde

r to

gain

mor

e co

ntro

l. RE

MA

1000

, for

exa

mpl

e, h

as

ente

red

the

farm

ed sa

lmon

indu

stry

to o

btai

n co

ntro

l ove

r the

fish

they

are

selli

ng.

!99

Stru

ctur

e Th

ere

shou

ld b

e so

me

crite

rions

bet

wee

n th

e fr

ont e

nd a

nd b

ack

end

IKEA

Th

ere

are

sust

aina

ble

crite

rion

s in

the

inte

rnal

repo

rts b

etw

een

a w

areh

ouse

and

a c

ount

ry w

ith a

gl

obal

func

tion.

Stru

ctur

e:

Man

agem

ent

To a

ctua

lly sh

ift a

mod

el, i

t req

uire

s atte

ntio

n fr

om th

e m

anag

emen

t gro

up

Gra

mst

ad

I thi

nk g

ener

ally

CSR

is to

o lit

tle u

sed.

It sh

ould

be

used

mor

e up

in th

e m

anag

emen

t gro

up, a

s wel

l as

the

com

mun

icat

ion

depa

rtm

ent.

It is

ofte

n a

pers

on fu

rthe

r dow

n in

the

syst

em th

at h

as th

e re

spon

sibi

lity

for t

his,

or it

mig

ht b

e pl

aced

in th

e H

R de

part

men

t. So

me

com

pani

es d

o no

t eve

n ha

ve

anyo

ne re

spon

sibl

e fo

r CSR

at a

ll. T

his s

houl

d be

mor

e ac

tivel

y ta

ken

a po

sitio

n on

, the

re is

a n

eed

for a

con

scio

us st

rate

gy a

roun

d it.

Thi

s is s

omet

hing

Vir

ke sa

w in

our

surv

ey, t

here

is m

ore

actio

n th

an a

ctio

n pl

an. C

ompa

nies

just

do

it, b

ut th

ey h

ave

no d

elib

erat

e st

rate

gy a

roun

d th

e fa

ct th

at “

this

is

our

soci

al re

spon

sibi

lity,

let u

s bui

ld o

ur re

puta

tion

arou

nd it

”.

Stru

ctur

e:

Man

agem

ent

The

impo

rtanc

e of

man

agem

ent i

n co

re fu

nctio

ns

IKEA

W

ithin

IKEA

Glo

bal,

whi

ch m

anag

es th

e su

pply

cha

in, p

rodu

ct d

evel

opm

ent,

sale

s and

dis

trib

utio

n, a

st

ab fu

nctio

n is

inte

grat

ed w

ith o

ur C

SO (C

hief

Sus

tain

abili

ty O

ffice

r). T

he C

SO is

in th

e m

anag

emen

t gro

up, w

here

all

the

larg

est s

trat

egie

s are

initi

ated

and

dri

ven.

One

Sus

tain

abili

ty

Man

ager

can

als

o be

foun

d in

eve

ry c

ore

func

tion

of o

ur o

pera

tions

. St

ruct

ure:

M

anag

emen

t Th

e C

SR re

spon

sibl

e sh

ould

idea

lly fo

llow

up

the

entir

e va

lue

chai

n, b

oth

the

fron

t and

bac

k en

d H

&M

In

eve

ry p

rodu

ctio

n co

untr

y th

ere

is a

pro

duct

ion

offic

e, w

here

ther

e is

a te

am o

f sus

tain

abili

ty-

wor

kers

that

follo

w u

p su

pplie

rs. T

hese

team

s als

o w

ork

clos

e w

ith e

mpl

oyee

s dea

ling

with

pur

chas

es.

My

role

con

cern

s dow

nstr

eam

act

iviti

es in

a sa

les c

ount

ry. P

retty

muc

h al

l the

larg

e co

untr

ies a

re

sale

s cou

ntri

es, a

nd a

ll of

thes

e co

untr

ies h

ave

one

sust

aina

bilit

y m

anag

er.

Stru

ctur

e:

Man

agem

ent

The

impo

rtanc

e of

man

agem

ent i

n ev

ery

func

tion

H&

M

We

are

also

fort

unat

e th

at w

e ha

ve a

larg

e de

part

men

t in

Stoc

khol

m, w

ith d

edic

ated

per

sons

div

ided

on

eac

h co

untr

y. I

belie

ve th

at th

is is

an

impo

rtan

t res

ourc

e fo

r us,

and

criti

cal f

or u

s in

orde

r to

reac

h ou

r goa

ls.

Stru

ctur

e:

Man

agem

ent

The

impo

rtanc

e of

man

agem

ent i

n ev

ery

func

tion

H&

M

Our

pra

ctic

e of

wor

king

on

seve

ral l

evel

s is a

lso

chal

leng

ing.

Try

ing

to m

ake

ever

yone

acc

ount

able

fo

r our

pra

ctic

e is

a c

halle

nge.

Eve

ryon

e is

a p

iece

of t

he p

uzzl

e th

at w

e ne

ed to

solv

e in

ord

er to

im

prov

e ou

r res

pons

ible

pra

ctic

es. W

e ha

ve m

any

mes

sage

s and

man

y go

als w

e w

ant t

o ac

hiev

e.

Con

sequ

ently

, thi

s is a

n on

goin

g an

d lo

ng p

roce

ss.

Partn

ersh

ips

The

impo

rtanc

e of

incr

ease

d co

mpe

tenc

e an

d kn

owle

dge,

e.g

. th

roug

h pa

rtner

ship

s G

ram

stad

I t

hink

it is

ver

y w

ise

for c

ompa

nies

to ta

ke p

art i

n th

e va

st k

now

ledg

e th

at e

xist

s in

envi

ronm

enta

l or

gani

zatio

ns, t

he a

id w

orld

and

vol

unta

ry o

rgan

izat

ions

. Man

y co

mpa

nies

can

ben

efit

from

such

pa

rtne

rshi

ps. I

thin

k ev

eryo

ne w

ill e

xper

ienc

e a

win

-win

situ

atio

n. It

is h

owev

er c

lear

that

the

com

pani

es n

eed

to b

e op

en fo

r inp

ut a

nd c

ritic

ism

. The

n I t

hink

they

will

hav

e ev

eryt

hing

to w

in o

n pa

rtne

rshi

ps.

Con

tinuo

us B

usin

ess M

odel

Inno

vatio

n: B

eing

ope

n fo

r C

hang

es

Bus

ines

s con

cept

Th

e im

porta

nce

of in

tegr

atin

g su

stai

nabi

lity

into

the

busi

ness

co

ncep

t H

&M

[…

] we

inte

grat

ed su

stai

nabi

lity

into

our

bus

ines

s con

cept

. Pre

viou

sly

we

stat

ed th

at: W

e de

liver

fa

shio

n an

d qu

ality

for t

he b

est p

rice

. Now

how

ever

, we

have

cha

nged

this

to: W

e de

liver

fash

ion

and

qual

ity fo

r the

bes

t pri

ce, i

n a

sust

aina

ble

way

. Thi

s als

o re

pres

ents

how

sust

aina

bilit

y is

per

ceiv

ed

from

the

high

est l

evel

. B

usin

ess c

once

pt

Res

pons

ibili

ty a

s a lo

ng-te

rm b

usin

ess c

once

pt

IKEA

IK

EA is

ded

icat

ed to

cre

ate

a be

tter d

aily

life

for t

he p

eopl

e. It

still

hol

ds to

this

day

, and

will

alw

ays

be a

cen

tral

par

t of t

he c

ompa

ny.

Man

agem

ent

The

impo

rtanc

e of

thin

king

in lo

ng-te

rms a

mon

g m

anag

emen

t IK

EA

The

man

agem

ent i

s als

o an

impo

rtan

t dri

ver,

and

they

und

erst

and

that

this

is a

bout

thin

king

in lo

ng-

term

s

Man

agem

ent

The

CSR

resp

onsi

ble

shou

ld h

ave

a ke

en fo

cus o

n a

cont

inuo

us

stra

tegy

IK

EA

My

job

is to

form

a c

ontin

uous

stra

tegy

, for

min

g a

stra

tegi

c pl

an re

gard

ing

wha

t we

wan

t to

be in

the

next

cou

ple

of y

ears

. For

exa

mpl

e w

hat c

hang

es w

e w

ant t

o co

nduc

t and

impl

emen

t. M

y jo

b is

th

eref

ore

not t

o in

terf

ere

in IK

EA’s

cur

rent

dai

ly a

ctiv

ities

. For

exa

mpl

e re

gard

ing

mai

nten

ance

, m

achi

nery

or w

aste

that

lead

s to

sust

aina

bilit

y is

sues

. My

obje

ctiv

e is

ther

efor

e no

t to

lead

the

proc

ess c

once

rnin

g re

cycl

ing

proc

edur

es, t

hese

pro

cess

es a

re a

lrea

dy in

tegr

ated

in o

ur e

mpl

oyee

s’

gene

ral w

ork

task

s.

!10

0

Enab

lers

Pe

ople

are

the

stro

nges

t driv

er fo

r res

pons

ible

pra

ctic

es

Stor

mbe

rg

I bel

ieve

that

the

peop

le is

the

stro

nges

t res

ourc

e w

e ha

ve, n

amel

y be

caus

e yo

u ne

ed p

eopl

e to

dri

ve

the

CR

activ

ities

.

Con

tinuo

us id

eatio

n C

ontin

uous

pro

gres

s and

stra

tegy

by

eval

uatin

g fu

ture

cha

nges

an

d op

erat

ions

IK

EA

Ther

e is

cle

arly

a lo

t of w

ork

behi

nd it

all.

I ha

ve b

een

a pa

rt o

f the

pro

cess

rela

ted

to c

ontin

uous

pr

ogre

ss a

nd st

rate

gy. T

his i

s a lo

t abo

ut se

eing

our

selv

es in

rela

tion

to th

e w

orld

out

side

. Nam

ely,

to

see

whe

re th

e w

orld

and

the

clim

ate

is h

eade

d, w

hich

par

ts o

f the

wor

ld th

at a

re p

artic

ular

ly e

xpos

ed

and

whi

ch ra

w m

ater

ials

that

are

affe

cted

. And

aga

in, h

ow th

is w

ill a

ffect

our

ope

ratio

ns. W

e ha

ve to

ev

alua

te h

ow w

e pe

rcei

ve th

e fu

ture

supp

ly c

hain

in re

latio

n to

mat

eria

ls a

nd c

osts

. It i

s a

com

bina

tion

of a

naly

zing

ext

erna

l and

inte

rnal

asp

ects

. One

als

o ha

s to

be o

pen

in o

rder

to

stre

ngth

en so

me

part

s, an

d to

ne d

own

othe

r sm

alle

r par

ts. T

hese

pro

cess

es a

re e

norm

ous,

and

conc

ern

num

erou

s asp

ects

. C

ontin

uous

idea

tion

Con

tinuo

us id

eatio

n pr

oces

s con

cern

ing

spec

ific

prac

tices

St

orm

berg

In

add

ition

, we

are

cont

inuo

usly

sear

chin

g fo

r oth

er d

istr

ibut

ion

chan

nels

that

mig

ht b

e su

stai

nabl

e.

For e

xam

ple,

sear

chin

g fo

r sup

plie

rs th

at a

re u

sing

a “

clim

ate

neut

ral”

serv

ice

pack

age,

such

as

Brin

g an

d Po

sten

. We

are

also

look

ing

into

oth

er th

ings

that

will

be

sign

ifica

nt fo

r our

cho

ice

of

supp

liers

and

the

way

in w

hich

we

oper

ate.

C

ontin

uous

idea

tion

Con

tinuo

us B

MI o

n fo

cuse

d m

ain

area

s H

&M

Tw

o m

ain

dim

ensi

ons n

eed

to tr

ansf

orm

in th

e fu

ture

. Fi

rstly

, the

mat

eria

ls u

sed

in th

e pr

oduc

tion

proc

ess.

Sinc

e w

e ar

e an

exp

andi

ng c

orpo

ratio

n, w

e ca

nnot

con

tinue

to g

row

in th

e w

ay w

e do

in in

finite

tim

e. S

econ

dly,

ther

e ar

e m

ajor

cha

lleng

es w

hen

it co

mes

to p

rodu

ctio

n. F

or th

e m

ost p

art,

we

prod

uce

in c

ount

ries

that

are

cha

ract

eriz

ed b

y hu

ge

chal

leng

es in

the

labo

r mar

ket.T

his i

s abo

ut m

akin

g th

e la

rge

and

good

initi

ativ

es sc

alab

le, b

ecau

se

we

cann

ot d

o go

od in

a so

cal

led

nich

e-m

arke

t if w

e w

ant t

o m

ake

a re

al im

pact

. C

ontin

uous

idea

tion

The

arriv

al o

f new

CSR

-cas

es a

nd th

e im

porta

nce

of b

eing

ope

n to

cha

nges

G

ram

stad

Re

sour

ce sc

arci

ty w

ill k

eep

affe

ctin

g us

, esp

ecia

lly in

reta

il. I

also

thin

k ne

w c

ases

will

con

stan

tly

arri

ve. F

or e

xam

ple

thin

gs th

at w

e us

ually

wou

ld n

ot in

terp

ret a

s CSR

.

Con

tinuo

us id

eatio

n Th

e im

porta

nce

of fa

cing

idea

tion

proc

esse

s thr

ough

co

llabo

ratio

n, e

.g. p

artn

ersh

ips

Gra

mst

ad

Ther

e ar

e a

lot o

f ind

ustr

y in

itiat

ives

for p

artn

ersh

ips a

nd c

olla

bora

tions

. I h

ave

faith

in th

ose

initi

ativ

es. I

thin

k th

at in

dust

ry in

itiat

ives

, for

exa

mpl

e fo

r the

con

stru

ctio

n in

dust

ry a

nd g

roce

ry

indu

stry

, can

lift

who

le in

dust

ries

. By

havi

ng se

vera

l act

ors g

athe

ring

toge

ther

and

iden

tifyi

ng w

hat

they

do

good

and

whi

ch c

ontr

ibut

es to

the

soci

ety,

and

iden

tifyi

ng th

eir c

halle

nges

. C

ontin

uous

idea

tion

Be

open

-min

ded

whe

n th

ere

is a

nee

d fo

r cha

nge

IKEA

O

ur st

rate

gy is

alw

ays o

pen

for n

ew a

dditi

ons.

C

ontin

uous

ex

perim

enta

tion

Con

tinuo

us im

prov

emen

t pro

gram

s for

supp

ly c

hain

Whe

n w

e es

tabl

ishe

d th

e IW

AY-s

tand

ards

the

obje

ctiv

e w

as to

gai

n fu

ll co

ntro

l, m

ainl

y op

erat

ed b

y ch

eckl

ists

. How

ever

, the

cur

rent

focu

s is t

o fin

d ou

t how

we

can

all w

ork

toge

ther

in o

rder

to im

prov

e.

In so

me

case

s, th

e su

pplie

rs a

re re

spon

sibl

e fo

r car

ryin

g ou

t thi

s wor

k.

Con

tinuo

us

expe

rimen

tatio

n C

ontin

uous

impr

ovem

ent p

rogr

ams f

or su

pply

cha

in

H&

M

How

ever

, we

are

now

mov

ing

tow

ards

a c

ontin

uous

impr

ovem

ent p

rogr

am w

here

supp

liers

are

act

ive

part

icip

ants

in th

e re

port

ing

proc

ess.

Nat

ural

ly, i

t is c

heck

ed tw

ice

in o

rder

to e

nsur

e co

rrec

t re

port

ing.

With

this

pro

gram

we

can

also

mea

sure

impr

ovem

ents

, and

not

onl

y co

ntro

l whe

ther

or n

ot

proc

edur

es a

re b

eing

follo

wed

. Thi

s als

o m

otiv

ates

the

supp

lier t

o se

t ow

n go

als f

or im

prov

emen

t, an

d in

crea

ses t

he fe

elin

g of

ow

ners

hip

for t

he im

prov

emen

t pro

cess

. C

ontin

uous

ex

perim

enta

tion

Con

tinuo

us im

prov

emen

t pro

gram

s for

supp

ly c

hain

St

orm

berg

W

e ar

e al

so a

ctiv

ely

wor

king

with

impr

ovin

g su

pplie

r con

trac

ts. T

he fo

cus i

s on

diffe

rent

thin

gs in

th

ese

cont

ract

s. In

clud

ing

ethi

cal g

uide

lines

. In

a w

ay th

is is

a p

artn

ersh

ip, b

ecau

se w

e ar

e w

orki

ng

in th

e lo

ng te

rm to

gui

de a

nd im

prov

e pr

actic

es. W

e ar

e co

oper

atin

g ov

er se

vera

l yea

rs w

ith th

e di

ffere

nt su

pplie

rs.