A business model describes how a company draws on various resources as inputs and, through its business activities, converts them to outputs (products, services and waste). It provides a view of how the organization’s activities, and its outputs lead to outcomes, including the creation of value for different stakeholders.
Describe the relationships, resources, and inputs that are key for the business to succeed.
Describe the business processes that are most important to the creation of value.
Describe the company’s main products and services, its customers, and where it fits in the value chain for the industry.
Describe how the company is structured, the markets it operates in, and how it engages with those markets.
The IIRC offers a model of how value is created through an organization’s business model, which takes inputs from the various capitals and transforms them through business activities and interactions to produce outputs and outcomes that, over the short, medium, and long term, create or destroy value for the organization, its stakeholders, society, and the environment.
The South African bank uses its business model reporting to quantify activities in support of its strategic priorities as well as the outcomes of those activities. The report describes the bank’s business model in terms of value creation, based on different kinds of capital, including manufactured, social and network, intellectual, human, and natural.
This example shows a summary of the business model of Chugai Pharmaceutical, a Japanese company, focusing on creating shared value for the company and society trough innovation. The company provides further explanation on how it creates societal value by focusing on “the pill”, “around the pill” and “beyond the pill”.
In this example, a South African telecommunication company explains its business model—its inputs, process, outputs and outcomes—in the context of financial and nonfinancial information, including the Sustainable Development Goals (SDGs). Inputs are organized alongside IIRC’s six capitals, with a direct connection with the SDGs; Outcomes reports specific economic benefits to investors, government, and society.
In this example, the German chemicals company BASF describes its business model in terms of value creation at different levels – output, outcome and ultimately impact.
