Green growth: innovation to drive change for a sustainable future
As global populations grow and we continue to deplete the earth’s natural resources, there’s a major opportunity for innovative businesses to mastermind solutions, help repair the damage and empower consumers to make sustainable choices.
Every glass of water we drink, every pair of jeans we buy, every train journey we take is eating up resources that the earth is unable to replenish.
In the first seven months of 2018, according to recent research, humans consumed an entire year’s worth of the planet’s resources, based on metrics such as the ability to absorb carbon and renew fresh-water supplies. This is a deficit we run year in, year out. Every year it gets wider. We are currently using the resources of 1.7 earths.
The ultimate cost of poisoned oceans, barren forests and lost species is the planet’s collapse. There is an urgent need to reverse our course if we are to bequeath to future generations a world that has coral reefs, virgin forests and Serengeti wildlife.
Businesses today can play a pivotal role in saving the planet through innovation.
Facing the stats
The smartest companies will see sustainability not only as a duty but as an opportunity to develop imaginative solutions to present challenges. Enterprises have it within their power to forge powerful approaches to meeting the UN Sustainable Development Goals by 2030 – a globally-endorsed framework for achieving a sustainable and inclusive world. “The potential for business to have a positive impact in this space in some of the largest challenges we are facing is huge,” says Ioannis Ioannou, associate professor of strategy and entrepreneurship at the UK’s London Business School.
“No human technology can fully replace ‘nature’s technology’, perfected over hundreds of millions of years in delivering key services to sustain life on earth.”
- Marco Lambertini, director general of WWF International
To be sure, there’s a limit to humankind’s role. As Marco Lambertini, director general of WWF International, wrote recently, “no human technology can fully replace ‘nature’s technology’, perfected over hundreds of millions of years in delivering key services to sustain life on earth.” Yet we are capable of repairing nature’s technology. The consequences of shirking this responsibility are terrifying. Killer storms and other climate-related disasters caused nearly $400 billion in damage last year alone. And around 170 million hectares more forest will be lost by 2030 – greater than the area of the Gobi Desert.
Business, but not as usual
Smart technologies are the vehicle by which enterprise can contribute to the mission of leaving a healthy planet for tomorrow’s children. Advanced recycling solutions, for example, can replenish the earth’s resources. Renewable energy will help mitigate climate change. Water scarcity can be tackled with innovations that turn seawater into freshwater, as more than two billion people still have no access to safe drinking water. Pioneering health and hygiene technologies could help usher in a more inclusive world.
For what businesses do best is identify problems – be they unmet needs, a gap in the market or ecological imperatives – and develop scalable solutions to overcome them. And this will also help them grow. “A handful of standout companies are demonstrating that sustainability can be a driver of innovation, efficiency and lasting business value,” according to a study by MIT Sloan Management Review and Boston Consultant Group.
Studies consistently show that commitment to responsible business practices is an enabler rather than an impediment to business success. A paper by the London Business School’s Ioannou and Harvard Business School’s Robert G Eccles and George Serafeim found that “high sustainability companies significantly outperform their counterparts over the long term, both in terms of stock market as well as accounting performance.”
Japan’s Toray sees business growth and social wellbeing as two sides of the same coin: “We believe that by tackling global issues such as climate change, energy resources and health and wellbeing, and leveraging cutting-edge materials and core technologies, we can carve out new markets and generate new opportunities,” the company says. “Our mission is to provide essential solutions to the various challenges the world faces by developing innovation technologies and advanced materials and to grow while contributing to global sustainability."
Empowering employees and consumers
One key reason is that businesses that have sustainability built into their corporate DNA are also able to attract and foster the best talent. Research shows that the new generation of graduates is gravitating toward companies with a genuine commitment to environmental stewardship – and that translates into innovation for positive change. “If you motivate and inspire your employees to work on this problem, and you also give them the resources and the trust to do it,” says Ioannou, “then you have an innovation miracle happening at the other end of the process.”
On the demand side, consumers are increasingly motivated to purchase products that are shown to minimize harm across the value chain. Sustainability is a key factor in building brand loyalty. “Consumers will actively choose brands they trust,” says Deloitte in a report. “And belief in the positive contribution a business makes to wider society is an important component of this trust.”
The bottom line is that it is in everyone’s interest to live in an environment that allows life to flourish. “There is no business on a dead planet,” Rick Ridgeway, vice-president of environmental affairs at outdoor clothing company Patagonia, said in a recent speech. Also a founder of the Sustainable Apparel Coalition, in which Toray participates, Ridgeway says: “The real key performance indicators of our business are the KPIs that measure the health of our planet.”
The earth’s fate is in the balance. Innovation ecosystems can restore natural ones to guarantee a sustainable future for all.