Sustainability meets Innovation
During the last couple of years, Sustainability has become a more and more present topic in our lives. Not only in everyday language but also in governmental discussions, company communication strategies, and even financial institution agendas.
The importance of climatic change and the scarcity of resources showed us the need for new approaches looking at operations and services.
But what does it mean to make our companies and investments „Green“? What role does Sustainability play in our economy and how can we achieve true and transparent results?
The driver of Sustainability is Innovation. Through new technologies and the willingness to challenge the status quo and conventional wisdom, we can develop new business models and explore alternative operation practices. The current ways need to be questioned in order to foster Innovation, as history shows. The challenge „how can we fly like birds?“ pathed the way towards airplanes, an Innovation we now see as something normal, but hasn’t been for most of our existence.
There are many such questions we need to ask to develop sustainable or even regenerative alternatives. Optimizing, rethinking, exploring, and having the bravery to go new ways, are the practices that bring Innovation and therefore Sustainability.
Talking to companies about the need for Innovation is very common, but connecting it with Sustainability sounds expensive and not exactly financially beneficial. Therefore the reaction is often to postpone their implementation. However, it is an opportunity to become industry leaders, explore new markets, increase the reputation and attract employees. Sustainable Innovation means the development of new entrepreneurial solutions, which are effective, successful and create not only environmental and social but also economic value. Additionally, companies that have realized the positive connotation between Innovation, Sustainability, and Performance are more likely to be drivers of similar processes within their supply chains. They set an example showing that implemented innovations can generate net economic, social, and environmental benefits for all members of the value chain. It serves multiple goals helping to meet business goals like managing risks and opportunities in an efficient manner, meeting mandatory or voluntary standards, and attracting investors. These are looking for ESG related investments given the growing concerns over climate change and social inequality.
Companies with sustainable innovation practices are more resilient than their competitors and show elevated performance, which makes them attractive for investors. The investments can then be used for further improvements and new innovations. This is how a circular sustainability model works.
From a company’s perspective, the mentioned benefits can mean a significant opportunity within their production and existing market. Including now national and international efforts and investments regarding Innovation and Sustainability shows us how urgent the need for matter is and how beneficial an implementation for companies can be. Last year the Glasgow Alliance for Net Zero Financing committed $130 Trillion of private capital into net-zero projects and in the same year, over 2000 companies followed the call for emissions reduction by the SBTi, implementing their targets and starting reporting on their emissions.
Other companies and especially young startups are dedicating their business models to the ultimate goal of a sustainable tomorrow and innovative projects as the driver. The innovators are eager to develop new ideas, products, services and market them and consumers, especially the younger generations, are just as longing for real change-makers. Companies have recognized sustainable Innovation as a valid business case and are consolidating innovative startups in their strategies to reach carbon neutrality and other set targets. The need of disclosing data on ESG performance by governmental and supra-governmental organisations and financial institutions puts pressure on the players to find solutions to problems that have been detected quite some time ago (Paris Agreement as one example). Back then many have already committed to different Agreements but had not successfully met their objectives yet. Now that true and meaningful data is needed, the industries start to move and Innovation in the Sustainability sector is more requested than ever.
The ultimate objective of sustainable Innovation is making a true and meaningful change towards a more sustainable direction, rather than producing even more things that create issues in the long run. It’s a question of balance between our consumer society and the carrying capacity of our planet, finding the most efficient meeting point between economy and environment.
Humanity won’t ever stop their producing and consuming habits but the shift towards sustainable and regenerative production using Innovation could be seen as a light on the horizon that otherwise would be invisible due to the permanently working smokestacks.
for YEX INNOVATION MONDAY