Abstract:
Inclusive and Sustainable Businesses (ISBs) are considered crucial for achieving social
development and environmental sustainability in Sri Lanka’s current path to economic
revival. According to the recently published National Strategy, ISBs are defined as “purpose driven enterprises that use commercially viable models to generate positive social and environmental impact.” Sustainable Business Model Innovation (SBMI) is a growing area of research that informs the fundamental processes that start-ups and transitioning organizations can embed in their management systems to become ISBs. This paper presents a case study of SBMI within a start-up in the Small and Medium Enterprise (SME) sector using an autoethnographic action research methodology. The experiences and iterative decision making process adopted by the author, who is the CEO of Green Life Generation (Pvt) Ltd.—a grassroots ISB and SME—are presented. Since 2017, the company has engaged in research and development activities aimed at creating sustainable solutions to support the transition to a regenerative and circular economy. This study demonstrates the development of ‘eCOOProcessing,’ a novel, integrated, community-based waste management model resulting from the company’s SBMI process. The model is built on the premise that the UN Sustainable Development Goal (SDG) 12 (Responsible Consumption and Production) is fundamental to addressing the root causes of the current polycrisis. This study shows that while ISBs have high impact potential, they face challenges due to the price theory of value, where price, determined by market supply and demand conditions, continues to dictate value. Thus, real value to society and the environment cannot be effectively translated into viable, competitive, and sustainable prices. This makes ISBs exclusive in terms of price and unsustainable in terms of financing. This contradiction, at a critical point in the path to resolving a planetary-level existential crisis, is problematic as it disincentivizes the business shift and weakens the business case needed to create a just and green transition. Given the lack of market-based solutions, regulatory tools such as Extended Producer Responsibility
(EPR) can provide alternative financing mechanisms for ISBs in the SME sector.
