The collective business case of sustainability: when does it pay to be sustainable?

The business case of sustainability is a popular explanation for the motivation of companies to contribute to sustainability. From this perspective companies will contribute to sustainability if it is directly advantageous to them. Unfortunately, many sustainability problems we face are ‘common goods’; solving these problems would benefit all, while the costs are incurred by individual companies. Consequently, the business case as it is known today does not incentivize companies to address these problems. Using a lens of evolution theory, we develop the collective business case and show, counter-intuitively, that it can be economically rational for companies to contribute to common good sustainability problems even at a net cost to the company.