November 1, 2023

Role of Sustainability in Innovation

Sustainable development is a business approach spread among companies nowadays, it is no longer an option, it became the driver to innovation, and a way to make the business grow stronger. When companies take the decision to adopt a sustainability innovation, they have to rethink their operations, products and business models.

However and even though the companies are convinced that the more environment-friendly they become, the more the effort will erode their competitiveness. They believe it will add costs and will not deliver immediate financial benefits.

They also think that making their operations sustainable and developing “green” products places them at a disadvantage vis-à-vis rivals that don’t face the same pressures. Sustainable manufacturing will demand new equipment and processes; and customers will not pay more for eco-friendly products during a recession. That’s why most executives treat the need to become sustainable as a corporate social responsibility, separate from business objectives.

Some executives behave as though they have to choose between the largely social benefits of developing sustainable products or processes and the financial costs of doing so. But that’s simply not true. Research shows that becoming environment-friendly lowers costs because companies end up reducing the inputs they use and generates additional revenues from better products.

Therefore, the quest for sustainability is starting to transform the competitive landscape, which will force companies to change the way they think about products, technologies, processes, and business models. The key to progress, particularly in times of economic crisis, is innovation.

Enterprises that decided to become green go through five distinct stages of change. They face different challenges at each stage and must develop new capabilities to tackle them.

1. Viewing Compliance as Opportunity – Most companies start with compliance to legal regulations while some choose to follow sector-specific codes of conduct.

2. Making Value Chains Sustainable – Keeping pace with regulation makes companies more environmentally aware and more attentive to their resource consumption habits. They look inward to reduce consumption and waste in their operations and workplace environments; and then outward to their supply chain and other external partners to drive efficiency through every link in the value chain.

3. Designing Sustainable Products and Services – With an increased focus on efficiency and newly acquired skills like life cycle assessments, companies can redesign their offerings and tap into growing consumer demand for more eco-friendly products and packaging.

4. Developing New Business Models – As companies view current business models through the lens of sustainability, they will inevitably rethink these models, especially with the advent of new technologies and the shifting landscape of customer expectations.

5. Creating Next-Practice Platforms – A sustainability focus also allows companies to build on their existing competencies to develop next-practice platforms and new paradigms.

In the light of the growing concerns over climate change and the stricter government regulations as well as the environment friendly consumer expectations, businesses are forced to change. To be able to follow up on the latest advancements, businesses are adopting green measurements in all aspects of their work and are yielding remarkable results. Let’s hope we reach a day where all businesses become green in every single aspect of their operations, thus contributing to making the world a better place!



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