Sustainable business model innovation

illustrative case

How the sweet of sugar sprouted the healthy of tomatoes

Introduction.

Company A is a sugar refinery. Company A aims to transform all raw materials into sustainable products. The factory produces 420,000 tonnes of sugar annually for food and drinks manufacturers. More than two hundred and forty miles of piping carrie hot water from the factory’s Combined Heat and Power (CHP) plant to cooling towers. Carbon Dioxide, as a by-product from the CHP boiler, is pumped into the atmosfear. Company A wishes to create a more sustainable business model.

The core problem.
The company in question has ‘carbon emissions’ and ‘low-grade heat’ as a cost structure in their business model. The carbon emissions and low-grade heat are treated as wastes and therefore failed value. Water towers are used to cool down the low-grade heat and are therefore added to the cost structure.

IdeaCan’s solution.
If the company in question was to set up a glass house in the vicinity of their factory they could use their waste to create new value. Soil from beets can be used as clean soil to plant tomato plants. Excess low-grade heat can be used to warm the glass house. Carbon emissions can be pumped into the glass house to create photosynthesis for the tomato plants. Existing water towers can be used to water the plants. Excess water towers can be removed. Rain from the glass roof can be captured to supplement any shortage in water.

The result.
The company in question gets a reduction in waste and cost structure and an increase in revenue streams and social and environmental values. The excess low-grade heat and carbon emissions are no longer treated as wastes but as value to grow tomato plants. Water towers are no longer required to cool down low-grade heat and are removed from the cost structure. Revenue streams are increased by creating a new value stream by selling tomatoes. Social and environmental values are increased by reducing carbon emissions to the eco system.

Financial:
Reduce in cost of water towers: 18% reduction in cost structure → €350.000 savings annually.
Added value streams by selling tomatoes: 9% increase in revenue streams→ €200.000 profit annually.

Valuable:
Increase in environmental values: 30% reduction in carbon emissions →  profit for planet.
Increase in social values: 0,5% increase in vegetables on the market→  profit for people by creating more healthy products.
Increase in social values: creation of new jobs→  profit fo people by decreasing unemployment.

Reduction in costs x added value streamsincrease in social and environmental values = multiplier (triple bottom line)