I just read an interesting Deloitte study linking sustainability with innovation inside corporations. According to the study, companies engaged in sustainability innovate more than their competitors. At the risk of sounding cheeky, I don’t find this hard to imagine. Companies that recognize the importance of sustainability tend to be those pushing for new ideas. And applying the sustainability filter to innovation efforts sparks new patterns of thinking — and fresh ideas.
But what happens with those fresh ideas? Sustainability is about whole-system thinking. ‘Fixing’ one element tends to reveal an array of new shortcomings. Frustration sets in.
“…I think you are underestimating the difficulty of applying McDonough’s Hannover Principles…because as our society gives increasing importance to commodification, it neglects other principles. Additionally our aggressive pursuit of instant results/gratification and the disposable nature of many things in our culture also reduce our ability for long-term planning and an appreciation for McDonough’s Hannover Principles.Not just that, but it’s also difficult it is to keep a company afloat, let alone successful in such a competitive market, without adding the additional burden of applying McDonough’s Hannover Principles, especially for a company making consumer products with investors demanding higher dividends.”
The CSO-CFO-IR Connection in Practice
Walmart EVP and Chief Sustainability Officer Kathleen McLaughlin will share a case study of successful multicapital collaboration in practice — at Integrate '20, Nov. 9-11.
Fortuitously, I had a conversation on this topic last week with Brian and Mary Nattrass, best-selling authors and international sustainability consultants.
They fully acknowledged the hump that companies hit when engaged in sustainability-focused innovation. As they said, “After you have picked the low-hanging fruit in eco-efficiency and made a real commitment to eco-innovation, you may be faced with harder, sometimes more costly calls — investing in people; exploring alternative, greener energy sources; and examining the life cycle of products and impacts across the entire supply chain. There are myriad hurdles involved in each, a universe of issues that increase complexity, and conventional ROI calculations can become more challenging. Authentically walking the talk takes commitment and perseverance.”
So is it an exercise in futility? Far from it.
The Power of Collaboration
The Nattrasses stressed the fact that the bar is constantly rising in corporate sustainability. Actions that represented sustainability leadership just a few years ago are the price of admission today. Continuous innovation is essential. For example, when the LEED green building standards came out, they were a game changer. Today it is increasingly the norm for companies to talk about their LEED-certified buildings. To take it the next step, Starbucks committed to constructing all of their company-owned stores around the world to LEED standards — raising the bar and upping the game for global companies.
Thankfully, companies starting down the sustainability path can take advantage of a growing phenomenon that will allow them to keep up: collaboration.
As the Nattrasses said about their client Nike, “They got to the point where they realized no matter how advanced their sustainability initiatives were, they couldn’t change an entire industry on their own. To really address systemic global challenges in their industry, Nike needed to collaborate with others. Today this collaborative work even includes sharing research that Nike has conducted in sustainable materials with their competitors. The intent of this collaboration is to raise the sustainability bar for an entire industry in order to make positive global change.”
As a result of collaboration, one company’s investment will be leveraged many times by hundreds of others adopting this technology. Competitors can ramp up their own green efforts without grinding through painstaking R&D. Sustainability-centric innovation has accelerated across the entire apparel sector.
It seems this new spirit of collaboration is giving companies fresh impetus to drive sustainability forward. As the Nattrasses point out, “When Patagonia and Walmart teamed up to spearhead the Sustainable Apparel Coalition (SAC), they opened the door to other apparel companies who also saw the limitations of going it alone. Savvy companies with deep engagements in sustainability like Timberland and North Face realized they could still be tough competitors in branding and style, but accelerate sustainability in the global sector by doing it together.”
Innovation isn’t the only reason for sustainability collaboration.
For one, it tends to be easier to convince your CEO to do more in sustainability if he or she knows the competition is pushing ahead. Secondly, these collaborations provide a way for companies to work together on sustainability challenges that impact their entire industry. Just a couple of examples outside the Sustainable Apparel Coalition — the Better Cotton Initiative and BICEP (Business for Innovative Climate and Energy Policy).
Tapping the New Momentum
If you’re frustrated with the pace of sustainability innovation in your company, this may be an opportunity worth investigating. Groups such as the SAC are being formed in many sectors, and informal alliances are sprouting up everywhere.
In other words, there’s a group of companies out there that will help push you over that innovation hump.
This post first appeared in the Huffington Post on November 12, 2013.