Five Lessons from Teaching Sustainable Business Models in 2025
As another semester ends, this article shares five key lessons from teaching Sustainable Business Models at Parsons School of Design. It reflects on a term shaped by disruption and uncertainty, where new questions emerged around business, sustainability-as-usual, and what it takes to make sustainable business models actually desirable.
So, what do we talk about when we talk about sustainable business models (SBMs) in 2025?
I found myself asking that question a couple of weeks ago, right after wrapping up the final session of Sustainable Business Models — a graduate course I’ve been teaching for nearly a decade at Parsons, as part of the MS program in Strategic Design and Management.
SBMs in 2025 are certainly not what they were in 2015. And that’s part of what I love about teaching this course: it evolves with the times, yet remains grounded in the same core belief — that the intersection of business and sustainability is essential to shaping a (far) more desirable future.
It’s also one of my favorite courses because of its discursive nature. The students’ engagement, along with insights from our many guest speakers, continually challenges my thinking. Each semester leaves me with new directions to explore and new questions to sit with until the next one begins.
Every week, I ask students at the end of class to share what they’re taking away from that week’s work. It’s always a great moment of reflection — and now, I’d like to share mine: five takeaways or lessons from this semester.
Lesson #1: What is a sustainable business model? Don’t look for answers in the definition
One critical part of any course on sustainable business models is defining what the concept actually means. In general, I find defining an SBM a challenging exercise, to say the least. This is not only because most definitions are quite vague and open to wide interpretation, but also because I find them somewhat irrelevant to what I see as the key issue for sustainability in business: moving beyond sustainability-as-usual.
Let me share two examples to illustrate this point. Lüdeke-Freund et al. define an SBM as “a business model for sustainability refers to how an organization proposes, delivers, captures, maintains, unlocks, and shares value with and for its stakeholders.” Geissdoerfer et al. suggest that SBMs are “business models that incorporate pro-active multi-stakeholder management, the creation of monetary and non-monetary value for a broad range of stakeholders, and hold a long-term perspective.”
The goal behind these definitions is clear: to distinguish SBMs from traditional business models. While, as you can see, definitions have limited capacity to do so, this distinction can be better explained by exploring the general idea of taking a more holistic view of value creation — especially in terms of how it is created, for whom, and who captures it. However, I have to admit that, for me, it’s still not very helpful, as I’m more concerned with differentiating business models that are grounded in sustainability-as-usual from those that go beyond it.
Why does this matter? Because today, most businesses have embraced sustainability in one way or another — but often do so while continuing to prioritize profit maximization and short-term growth. These voluntary efforts allow companies to do what they feel comfortable doing, not what they need to do. As a result, the outcomes are typically unambitious and incremental at best. This is what I call sustainability-as-usual — an overall mindset that keeps businesses in a sandbox: one that might contain some good ideas and minimal discomfort, but offers no real pathway toward the deep, systemic change we urgently need.
Lesson #2: Moving beyond sustainability-as-usual is an elusive Holy Grail
I’m very interested in companies that take sustainability seriously and make a genuine effort to move beyond sustainability-as-usual. But what does that actually mean? In general, it means adopting a sustainability-first approach — prioritizing sustainability values even when it might come at the expense of short-term profits. Think of PR companies that refuse to work with fossil fuel clients, or companies that effectively promote repair options even if those are less profitable than selling new products Ultimately, this is about rejecting the outdated and unsustainable framework of shareholder capitalism.
In practice, however, it’s more complicated. A company may take bold action in one area while continuing to operate in a sustainability-as-usual way in another. They could, for example, invest in more expensive regenerative agriculture practices while still relying on wasteful, disposable packaging.
To make sense of these contradictions, here are four basic rules I encourage students to follow:
- Look at the forest, not just one or two trees — try to understand the full picture.
- Focus on materiality — look at what really matters, even if the company tries to downplay it.
- Check for major inconsistencies — for example, strong climate commitments alongside a failure to ensure living wages in the supply chain.
- Pay attention to signals of deeper intent — such as support for 1.5°C lifestyles (i.e. reduced demand for new stuff and improved utilization of what we already have), lobbying for stronger climate policy, or openness to radical, transformative ideas.
Ultimately, this isn’t hard science — it’s detective work. It’s about piecing together evidence to form a well-supported view of a company’s sustainability DNA and whether it’s making real progress toward moving beyond sustainability-as-usual. That’s why, rather than looking for a definitive answer, I prefer to assess where a company sits on the spectrum — how close it remains to business-as-usual, and whether there are signs it’s moving meaningfully away from it. Because with something as complex and evolving as this, simple yes/no answers are not only rare — they can be misleading.
Lesson #3: For SBMs to succeed sustainability should take the backseat
[If this lesson seems at odds with the previous lesson’s sustainability-first framing, hold that thought — we’ll come back to it]
One of the first lessons we explore when discussing sustainable business models (SBMs) is the challenge of finding the sweet spot among viability, desirability, and feasibility. Whether we’re talking about an existing company launching a new product or a startup building from scratch, this sweet spot is critical to the success of any SBM. All three elements matter and are deeply interconnected — but desirability consistently emerges as the most significant barrier to success.
Put simply, many SBMs are built around products, services, or experiences that customers still don’t find desirable enough to embrace — be it refillable packaging, sustainable fashion, or plant-based alternatives.
One key reason is that companies, even when designing sustainable business models, still need to create and deliver value to their customers. And here’s where it gets messy: too many companies assume that having a solution that’s better from a societal or ecological perspective will be enough. But if customers aren’t genuinely interested in what’s being offered — if it doesn’t meet a real need, address a painful pain point, or fit into their lives — it simply won’t work.
The hard truth is that many people still don’t prioritize sustainability as a primary decision-making factor. Instead of starting with a deep understanding of the jobs customers are trying to get done — whether functional, emotional, or social — and uncovering unmet needs that could spark compelling design opportunities, companies often lead with sustainability as the main (or only) value proposition. In other words, creating sustainable value isn’t necessarily synonymous with designing something people actually want.
This semester, we explored the somewhat limited potential of leading with sustainability, compared to the greater potential of leading with what customers actually prioritize — and letting sustainability take the backseat. One example we discussed was the Mill food recycler, which focused first and foremost on creating a delightful customer experience: minimizing the time and effort needed to manage food waste, increasing visibility into impact, and designing a sleek, beautiful bin that people are proud to keep in their kitchen — and even show off.
Let me be clear — putting sustainability in the backseat doesn’t mean deprioritizing it. It actually means helping it materialize — by meeting people where they are, and designing for real customers with real needs, not imaginary ones with wishful priorities.
Now, how does this align with the call for sustainability-first thinking? It’s not a contradiction — it’s a matter of context. Sustainability should guide a company’s vision, culture, and strategy. But at the product or service level, the customers’ jobs to be done and their priorities must shape the design process. If people don’t want what you’re offering, sustainability won’t materialize — certainly not at scale. And without scale, it can’t generate impact. The real goal is to embed sustainability deeply into the company’s DNA so that it sets the context for how value is designed and delivered — even when it takes a backseat.
Lesson #4: Acknowledge and ignore reality at the same time
I like to think of an academic course as a ship sailing in the ocean. Throughout its journey, it operates as an independent space — shaped by the curriculum and the participants onboard. Yet, like any good system, a course doesn’t exist in isolation. It inevitably interacts with the world around it, whether we like it or not.
Sometimes, reality gives you tailwinds — like a couple of years ago when nearly every company was publicly championing the importance of addressing the climate crisis and taking sustainability more seriously. Other times, you face headwinds — like right now, as many companies walk back their commitments, revise their targets, or become very silent on anything related to climate or sustainability.
So, should a graduate course on sustainable business models ignore these shifting tides? Should it operate in a bubble and tune out the ocean around it — or try to make sense of what the waves are telling us? I believe the answer lies in the context we work within: strategic design.
Strategic designers learn the importance of changing the scale at which problems are examined in order to understand their context and determine which questions are relevant. It’s a bit like adjusting your zoom level: zooming out reveals the big picture, while zooming in brings specific details into focus. Similarly, when it comes to how we relate to the real world in class, I’ve come to see the most effective approach as interchangeably acknowledging and ignoring reality.
What does it mean?
It means the building blocks — or the core ideas this course is grounded in — remain largely intact regardless of short-term changes in the external landscape.. Having said that, these core elements still correspond with reality and are shaped by it, and as such, these interactions are valuable and cannot be ignored. What I find most important is to provide proper context that will ensure we can learn the right lessons.
Take, for example, how companies responded to the Trump administration. Their reactions served as a powerful reminder that sustainability in business is shaped not just by internal ambition but more so by external forces — regulation, policy, market dynamics, and social norms (what can be referred to as dark matter elements). These forces were in play long before that administration and will persist after, but the context made their influence especially clear.
My role, as I see it, is to bridge theory and reality — to show how they respond to and shape one another. It’s about helping students make sense of both without allowing the constant noise of current events to steer our ship off course.
Lesson #5: Develop a point of view that is both critical and optimistic
When it comes to advancing sustainability in business, it’s easy to fall into an all-or-nothing mindset. Are businesses simply shuffling deck chairs on the Titanic, failing to make a dent as we hurtle toward a 3°C world? Or are they making real progress — creating a legitimate path toward overcoming the climate crisis?
There are valid arguments on both sides. You can focus on the part of the glass that’s full or the part that’s empty. But reality is far more complex and nuanced. The answer isn’t black or white — it comes in many shades of gray.
That said, my goal in this class isn’t to identify the exact color tone of the moment. It’s to make the case that the future is still unwritten. While we operate within real constraints that can make change difficult, there remain multiple directions to explore — and we still have agency to pursue them.
I aim to equip students not only with a good understanding of business models and sustainability — and how to connect them effectively — but also, and perhaps even more importantly, with the tools and mindset to act. I want them to find their own agency, and use design, creativity, systems thinking, and storytelling to envision and develop new solutions that can make a difference.
But the starting point is criticality. As Alex Steffen puts it, “we are in a very real way fighting an old war as a new war erupts. And that, to some degree, those old practices, strategies, etc., have gone from being just ineffective to actively unhelpful to, in some cases now, I think actually making it easier for bad actors to do bad things.” This is very much the case with sustainability in business today. We can’t hope to make real progress without recognizing the need for new practices and strategies. Without that shift, we lose.
Still, recognizing what doesn’t work is only the beginning. This course — and the program it is part of (MS in Strategic Design and Management) — are not just about understanding the world; they’re about changing it. We want students to figure out not just how to navigate within the world as it is, but also how to shape it into a more desirable one. That means discovering your personal agency — and exploring your power as a creative, a designer, a communicator, a systems thinker, a norm entrepreneur — to move the needle.
This is why the course is both a professional journey and a personal one. The goal is to help students develop a point of view that not only understands the challenges we face and treats them with the seriousness and urgency they deserve — never ignoring the need for systemic change to truly make a difference — but also acknowledges the agency we each have, in different capacities, to make change happen at some level. This is true not only for the students, but also for me — and for each and every one of us.
Raz Godelnik is an Associate Professor of Strategic Design and Management at Parsons School of Design — The New School. He is the author of Rethinking Corporate Sustainability in the Era of Climate Crisis. You can follow me on LinkedIn.
