Consumers, business customers and investors are all looking for alternatives that are good for the environment and climate as well as biodiversity. In fact, the assessment of the overall sustainability of business operations and its reporting have become a key part of business operations.
Sustainability reporting refers to reporting on the social and environmental impact of business activities. Business sustainability reporting is increasingly regulated. The Corporate Sustainability Reporting Directive (CSRD) is an EU legislation that entered into force on 1st of January 2024 and requires all large companies to publish their sustainability data in their annual report in compliance with the directive and the European Sustainability Reporting Standards (ESRS). The directive also requires the sustainability reports to be audited by an independent third party.
Small businesses and startups anticipate future sustainability requirements
For the time being, startups and small companies have no legal or regulatory obligations to report on the sustainability of their business to their stakeholders. However, companies should start proactively preparing for future obligations and consider relevant issues related to business sustainability from the beginning. This way, they can ensure compliance with legislation, consider what kind of business culture they want to build and how to minimize the impact of business activities on the environment and society, as well as establish guidelines for the company’s future goals in terms of sustainability and responsibility.
There are many tools for sustainability assessment. Their implementation, however, may not be so simple, especially in small start-ups, as many sustainability assessment tools or methods often require data or other resources that early-stage companies may not have.
Food SystemiCity supports business sustainability assessment
Startups and, more generally, development of new business concepts, need tools for the business planning stage to identify relevant sustainability issues and to enable the integration of sustainability perspectives into company management and decision-making.
The focus of the Food SystemiCity project is to facilitate business creation in the context of sustainable food systems in the built environment. Sustainability is at the core of the business opportunities and concepts developed in the Food SystemiCity project. That is why it is important that the business activities examined and supported in the project are assessed with a tool that takes into account the novelty of operations and usually limited resources, while providing information on the economic, ecological and social impacts of the operations to support strategic decision-making and anticipation.
To compile an assessment framework that would suit the needs of companies participating in the project, we first reviewed existing sustainability tools.
Benefits of an expanded Canvas assessment tool
The Business Model Canvas, developed by Alexander Osterwalder, is a commonly used tool that enables the development and assessment of a business model in a single table. An extended version of the model, the Sustainable Business Model Canvas, is being applied and tailored to suit the needs of the companies involved in the project.
In addition to assessing the business operations, the expanded Canvas take also into account the ecological and social sustainability of the business. The Sustainable Business Model Canvas provides companies with a framework for integrating environmental and social perspectives into their business strategy. The advantage of the model is its concise and practical presentation, which makes it a good basis for an assessment framework meant for evaluating the overall sustainability of a new company. The model is not too heavy, but it is nevertheless a strategic tool that challenges the business developers to critically assess current operations and business goals.
The new, adapted Canvas will be released for public use in 2025, and will be useful for a wide range of companies.
Are you a business developer in the food system sector? Would you like to assess the overall sustainability of your company or business concept? Contact Hanna-Maija Karikallio from Luke and help us test the assessment tool!