Subscribe, a business model for a more sustainable world?

While companies have long been slow to take on the environment, some have increasingly radical goals. Watch the initiatives of the GAFAMs that reduce or eliminate, one by one, carbon emissions by 2030 to 2040. If this sounds daunting from an economic point of view, it seems that the GAFAMs on the contrary think that this will allow them to achieve profitability. But then, why and how have attitudes changed so much in terms of the environment?

Data centers are now the cornerstone of our digital system. These are physical locations that aggregate all the facilities (servers, storage bays, etc.) in which all of our data is stored and processed. These have continued to proliferate in recent years to meet the growing needs of an increasingly connected world. However, they are energy streams. For example, in 2017, the combined electricity consumption of GAFAM was equivalent to that of New Zealand. Faced with this observation, and to meet the growing consumer demand, GAFAM has taken radical positions on the carbon footprint, even though the environment is often considered a cost.

Google has pledged to run all of its data centers with carbon-neutral electricity by 2030. In 2020, Facebook cut carbon dioxide emissions by 59% compared to 2017, and supported 86% of its activities—data centers and office activities—with renewable energies. Apple is now powered entirely by renewable energy and has promised to be carbon neutral by 2030. Amazon promises net zero emissions by 2040. Microsoft plans to be carbon negative by 2040. By 2030, which means it will remove more carbon dioxide from air which will be produced.

But in the face of all these initiatives, no one doubts that they have given up on the goal of profit maximization, on the contrary. Apple, for example, topped $100 billion in quarterly revenue for the first time in 2020. However, the latter seems to be finding it more economically efficient to run on green energy, and the fact that they have to pay for these infrastructures has something to do. That – the price of fossil fuels is bound to go up.

The subscription business model generates an environmental virtue

Behind this seemingly innocuous update, there has been a radical change in the business model of large companies in recent years: they are gradually moving from the status of product sellers to the status of service providers about use. Thus Apple and Google offer cloud hosting service and thus support maintenance of servers that are no longer with their customers. These companies now have to bear the costs of ownership, so the sustainability of their products is in their financial interest. Why resort to planned obsolescence if you own a smartphone? With this in mind, the French company Denkii offers all kinds of electrical appliances for rent (game console, connected clock, hair dryer, etc.). The company takes care of fixing every device, allowing the user to enjoy a device without owning it, thus promoting the sharing economy while contributing on its own scale to the reduction of e-waste.

Moreover, the economy of use also creates an environmental virtue on the part of the consumer: it avoids excessive consumption and the waste inherent in possession. Thus, initiatives are being developed in all sectors of activity. In ready-to-wear, for example, brands like Le Closet allow you to subscribe to chests to replenish your wardrobe daily. The goal is to reduce your consumption of clothing and thus reduce textile waste which, let us remember, is the second cause of pollution in the world after oil. Finally, customer satisfaction increases because their use of the product aligns by definition with their needs. Following this principle, the Quechua brand has launched a new service: camping equipment rental. Target ? Facilitate practice discovery without the need for investment, while reducing production and therefore equipment waste.

The common point of all these companies is that it is no longer the customer who owns the product but the company. The latter therefore has an interest in providing high quality products and maintaining them in good condition, in order to ensure regular income from rental or subscription, and to create and maintain a relationship of trust with the customer. The first lesson seems to be emerging: We don’t know if sustainable development has a business model, but if there is, it probably does.

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