Starting and sustaining your Sustainable Innovation…

To stay relevant in a future economy, organisations need to be financially viable, customer centric, and sustainable. Innovation and sustainability don’t just go hand-in-hand. In a world where stakeholders across the value chain demand people positive, planet positive, and business positive growth, innovation and sustainability are one and the same. Customers have never been more sensitive to – or invested in – environmental and social responsibility. In an economic downturn, a strategy that meets these requirements while generating returns is the difference between stagnation and success.

Sustainable innovation unleashes the power of people, insights, tools, ideas, and communities to tackle the climate crisis head on while meeting and exceeding commercial targets. It’s about positively impacting planet, people, and business in tandem. But when starting a new venture, it’s not always easy to reconcile sustainability with growth. How do you get started, move forward, and maintain momentum?

Getting started: define your ‘as is’ and ‘to be’

Most organisations say or think they are sustainable, but the reality rarely meets the expectation. Anyone can create a product or service and call it sustainable. To create truly scalable, sustainable products and services that meet consumer need, you’ll need to embed sustainability at the very beginning of your innovation process.

Work out your current sustainability situation. Where are you, right now, from an environmental (planet), social (people), and governance (business) perspective? This is your 'as-is' picture – it’s observational, not aspirational. While it’s difficult to be objective, methodologies like SWOT (Strengths, Weaknesses, Opportunities, Threats) can support critical assessment. Then, baseline your existing operations, products, and services so you know exactly where you’re starting from. This is your sustainable maturity level.

Once you’ve defined your ‘as is’ state, look at where you want to be. This is your North Star, and all actions should steer towards it. Consider external factors, such as current and incoming legislation and policy, to identify target areas. Set timeframes where possible, going deeper than ‘net zero by 2030’. Exactly what do you want to change, by how much, and by when? With your ‘as is’ and ‘to be’ in mind, you can understand how to bridge the gap. What are the most impactful initiatives to help you get there faster? Look to organisations within and beyond your industry for inspiration, identifying high-impact, high value opportunities.

Moving forward: prioritise and incentivise

Navigating towards your North Star is much easier when you know your starting point. From here, you can move forward with purpose, putting in place initiatives in line with your sustainable and commercial objectives. Remember that one goal is likely to impact others, and many will overlap.

When setting priorities, it’s important to be as specific as possible. However, broadly speaking, initiatives might include:

Decarbonisation – reducing your carbon impact through operational changes
Cost efficiencies – reducing energy demands and associated costs
People – attracting, retaining, and motivating your talent
Product – differentiating your product in the market
Customer – understanding and meeting your customers’ sustainability demands
Net zero – driving toward your organisation’s net zero commitments.

What you choose to focus on will depend on your ‘as is’ state, your ‘to be’ aspirations, and the resources you have available. Regardless of what you choose, it’s critical to communicate the value opportunity that comes from sustainable innovation and provide a rationale for your decisions. Your leaders must be on board to make this work, but the most impactful change comes from the top and the bottom. When your employees feel their actions make a difference, they’ll be inspired to work at their best. Learn, train, and upskill teams along the way, creating channels to share best practice across all functions and seniority levels.

To measure success, track progress against your baseline. Sustainable innovation differs from run-of-the-mill solution development. It’s easy to track the output, uptake, and profit of solutions. But what about the sustainable impact? Does it deliver planet, people, and business positivity? Support meaningful measurement by tracking scope one, two, and three emissions. Look to the UN Sustainable Development Goals and incoming disclosure laws like the EU Taxonomy and the Sustainable Finance Disclosure Regulation (SFDR) for recommended focus areas and metrics. Consider using sustainable accounting standards, such as the Sustainable Accounting Standards Board (SASB) and Global Reporting Initiative (GRI).

Sustainably mature organisations already disclose a range of data points voluntarily. If you’re not sure how or what data to gather, consider working with a partner or third party. Alternatively, build internal capability through upskilling, new hires, or mergers and acquisitions.

Maintaining momentum: incentivise and iterate

Sustainable innovation isn’t ‘one and done’. It relies on ongoing commitment, incentivisation, and iteration. To maintain momentum, create a sustainability governance structure to set expectations and ensure accountability across leaders and teams. Your sustainable governance structure should set clear sustainability principles that can be easily communicated and embedded to ensure sustainability is at the forefront of all thinking.

Create a plan for change implementation with named roles and teams, and identify sustainability champions who are empowered to accelerate progress. Reward engagement to encourage the right behaviours. Standardise sustainable responsibility, for example by adding sustainability clauses to job descriptions and employee goals. Continue to communicate openly and widely, inwards and outwards, and bring key stakeholders along with tangible benefits realisation.

For example, we helped The Warehouse Group (TWG), New Zealand’s largest general merchandise retail group, to ‘make sustainable living easy and affordable for everyone’. Our sustainability experts worked with a range of functions across the organisation to identify the gap between the group’s existing capabilities, current sustainability performance, and future ambitions. This gap analysis informed an investment strategy that was instrumental in defining the skills TWG required to rethink its end-to-end value chain, supplier engagement, and new untapped customer opportunities. TWG now has the confidence, capabilities, and roadmap to deliver on its ambition. 

Innovation can no longer be achieved without sustainability considerations. By understanding where you are, and being realistic yet ambitious about where you want to be, you can steer your entire organisation towards your North Star. It’s the most important change programme your organisation will ever undergo.