Sustainable Business Innovation – The No Regrets Moves

Sustainable Business Innovation – The No Regrets Moves

Innovation and Creativity has steered the development for human kind. The generation of millennials and before grew up in the teaching that, in innovation only the sky is the limit. While we can discuss about the true meaning of this statement, bearing in mind massive human potential, we also need to accept we we now know much more about HOW, this mighty and fragile system in which we live in - called NATURE, can sustain life for millions of years. That introduced us to a new perspective and gave innovation a frame. Innovation has to be able to sustain and nurture life.

Sustainable innovation involves making intentional decisions about company’s products, services, or processes in such a way that they are aligned and integrated with the ecological and social systems, that keep the whole system running in long-term.

Ok we get that, but how to get to that point of recognizing what needs to be done and how do you pivot from there?

Here are more insights on that, however the tools and process that we describe here today are not fully capturing the Complexity of the System Nature is. They give orientation, but going forward innovation and product development requires more transdisciplinary engagement to truly develop products and services that fit and not harm ecosystems.


CHECK IN

During our last frogeex Green Tech Talk we discussed this topic with our advisor Jef Teugels and he highlighted one particular paradox we may observe. It is the massive gap between pledges and action in terms of the ecological crisis. The fact that we carry responsibility for planet, people and profit seems to be not well understood. Regardless to the complexity and difficulty, it leads you to the one thing that drives any individual. Your Values. So, take a moment to check in with yourself. ?What do You care about? Is it innovation, is it quality work, is it justice or other? This is no esoteric, guru stuff, this is real. The topics which resonate with you are those that drive you. Once you have clarity on what counts for you, you can become active as leader, as a role model, as an influencer at any level. Same as we learned to value 24 collections of a fashion brand in one season , you can cultivate values in yourself, your environment and or your organisation.

It also connected to shift from mono to multicapitalism thinking. A business acting without regards to long term impacts is eventually rooted in monocapitalism. Monocapitalism values a single form of capital, financial capital, which is dominant and drives the economy, mostly short term. Multicapitalism, is integrated and understands that for it to exist it needs to be an equal part of the rest of the system, if we want to create resilience. The more symbiosis, the better. To shape this type of thinking, you can do whole lot of stuff, educate yourself, reframe the purpose of business, evaluate decisions based on their impact on various forms of capital, engage with stakeholders to understand their perspectives and priorities and more. Read about that in recent piece by Jef Teugels here.


LCA

Now, no great values will help to get where you ultimately want to go, without plan and people. To get clarity on the plan, we recommend you to start with LCA - environmental lifecycle assessment. Again, the deeper the understanding of the Complexity in Nature, the better predictions on positive and negative impacts of the product. Both organisational and a product LCA provide valuable insights to identify focus points for change.

Doing an LCA will enable you to

1.Innovate Sustainably – Make the right material and sourcing choice.

2.Cater Customer Needs - Numerous studies like Deloitte clearly show what customers are looking for, reference click here.

3.Respond to Regulation Quickly - CSRD first impact in 2024

Considering double Materialty is important. The CSRD includes the concept of 'double materiality'. This means that companies will report on how environmentally connected issues (example scarce water) might create financial risks for their business (financial materiality), but also on the company's own impacts on people and the environment (impact materiality.) For details re CSRD, check here .

4.Save costs - In principal if you look for available resources that are renewable, with a less complex supply chain, you will eventually save cost.


DOMINO EFFECT

For those of you that say CSRD is good thing, but it is still far away from now. I hear you, but consider this, when a bank falls under the regulation which most probably some of them will, the institution itself will have to implement measures that guarantee, they also comply with the standard. In case of bank, it may have the form of requirement for LCA, sustainable strategy to get better financing conditions or to qualify for financing in the first place, especially interesting for small and medium companies.

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10 TYPES OF INNOVATION

Once you pass that stage, you already know you are looking to innovate what you bring to the marketplace. For the facilitation of this process, I found the following graphics and approach helpful. The Ten Types of Innovation framework from Deloitte's innovation branch, Doblin. It is a useful tool to examine existing elements and process to identify the potential of these areas in the offering: Configuration (business model), Offering (product) and Experience (marketing).


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MHD consulting


CONFIGURATION

1.Profit Model. The way your business makes money. Instead of sell - rent, refill, pay-per-use models, Example: Rent the Runway - you rent a?designer look on a subscription. Result: $100M revenue, 8M customers.

2.Network. Collaboration to create value, by sharing or acquiring assets, it also secondary markets for by-products, like using waste in your process as the based for another business or product, Example: Toast-Ale -?beer from bread-waste in bakeries. Result: $ 600k+ pints in UK, 150k+ pints Globally 2019

3. Structure. Tangible and intangible assets, like apps, tool but also education optimising systems to reduce redundancies Example: LiquidSpace - to hire out underused space in offices. Result: $25M. $3.2M 2019 est. revenue, 109K+ customers, 6M transactions

4. Process innovation. Improving methods of creating the product, can include new tech, or software, reduction of waste. Example: Diageo -?uses grain by-products from the brewing processes to create renewable energy. Result: 50% of the distillery’s energy covered & saving est 10,000 tons of CO2 per year.


OFFERING

5. Product performance. By improving the performance of the product to reduce emissions, resource intensity, or simplify product for circulation, Example: LUSH – a?part of the product range as “naked” of packaging to reduce plastic use, Results: US only 6.5 million shampoo bars sold & saved 19.4 million plastic bottles equal to 535 tons of plastic (weight of five blue whales). Turnover: £900M+

6. Product System. Let us look at a product as a system, how it works with other products in a?kind of complete offering, with more modular understanding of what a products’ purpose is. This offers much opportunity for re-think of design, real use-case for customers, and product longevity. Example: Gerrard Street ?- modular-designed headphone system for repair & replace. Current model of a linear industry wastes 15,000 tonnes a year of discarded headphones, usually worn or broken components. Results: Turnover €50K with 900 clients.

EXPERIENCE

7. Service. Improvements to touch-points around product or user communities and support systems. Example: RiverSimple - all-inclusive, simplified and clean mobility experience, subscription-based for approximately £370/mth includes everything - even fuel - so it pushes from own product improvement to save resources and costs. Pilots in progress.

8. Channel. Looking at how the product is distributed and delivered customers.?Can have many forms experience centres, flagship stores, direct channels or non-traditional channels. Example: Ecover - The eco-friendly household detergent re-fill rolling out to supermarkets M&S and Sainsbury’s are trialling in-store refill stations. Results: 2019 Ecover laundry detergent Sales growth 16% to £16million

9. Brand. How a brand positions itself to sustainability. Imperfect sustainability is still acceptable as long as it’s clear that there are efforts being made towards improvement and transparency and clear values are essential. Example: H&M - Transparency is a key driver for sustainable innovation, displaying steps taken and planned to improve social and environmental practices. H&M scored 73% in the Fashion Transparency index - the highest of clothing brands. They disclose the names of all their suppliers openly on their web, they received 29,005 tonnes of clothing through the customer reuse/recycling programme. Results: Net Sales 2019: €22 billion

10. Customer engagement. How you speak to customers. Personalisation, automation and a memorable, meaningful experience – strong identity, clear values and engaging customers to be part of something bigger. Example: Patagonia – They created a loyal base of customers through multiple actions. The “Cleanest Line” collaborative stories for thrill-seekers, controversial but impactful marketing campaigns asking people to buy less, or a tour of their Worn Wear repair truck and other catching attention, educating on sustainability issues, and contributing to growth. Sales 2019: $1 billion, 14% average growth with 3,000 employees globally. If you need help on your Innovation journey reach out to Maria Halse Doloquin here .

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SUSTAINABILITY IS A JOURNEY

The examples above have many imperfect eco-innovations, where an improvement in one area may increase emissions in another through rising demand, manufacturing and delivery. Many advances could be seen as “green-washing”, too small as effort compared to the massive impact of waste, deforestation or fracking.

All in all, to build a?viable business in the long run means it has to be ethical in its conduct. Many times, it is not the product itself but the ways we choose to use it. Same as you cannot have a?hospital serve patients without single use plastic items. But it is a totally different thing to use it everywhere and dispose it the way we do now.

Based on some of the cases shared here, it is also obvious that some innovations are often repackaged “past-generation” services. We are in the beginning of making Sustainability the back bone of how we do things and this is why we need to cooperate, exchange on knowledge, get a deeper understanding of our Adaptive Complex Ecosystem and build this into how we make personal and business decisions.


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This article was produced in cocreation with our partners at Dr Julio Campo, Ecological Economy expert and Diego Romeiro, Researcher in Sustainability, Ecology, Biotechnology, all valued members of frogeex network advising companies, municipalities and organizations to be eco-logical and efficient. ?

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Discover more on sustainable building and living at www.frogeex.com .

Sachin Pyasi

Deputy General Manager - Projects at Birla Corporation (M.P. Birla Cement group)

1 年

Sustainable development is referred to as the idea that human beings should sustain by meeting their basic needs, while also making sure that the future generations are able to meet their basic needs. In other words, it is a way of organising the society by which it can exist for a long duration without compromising on the availability of resources for future generations. For sustainable development, factors such as preserving the environment and natural resources along with maintaining social and economic equality need to be followed. This concept is not new, it has been followed by many cultures over the course of history with an aim of maintaining a balance between man and nature as well as economy. The concept of sustainable development can be also referred to as environmentally sustainable economic growth. Sustainable development looks to create a balance between the economic, environmental and social Product innovation, cost control, new technology adoption are major focus factors

Joseph Hess

Smart World in Green?

1 年

Sustainable and motivating entrepreneurial approach. Very welcome, to the point in the critical aspects and very useful. Thank you very much.

Alireza Jahanandish

Climate Change, Business and Sustainability Specialist

1 年

Cogent, timely, and to the point. Thanks Jana for sharing this. ?? I believe #BusinessEthics is not an oxymoron. Nonetheless, it seems to me as well that to keep a?viable business in the long term - as highlighted in the article, an ethical conduct must be having maintained. #Purpose #AdaptiveComplexEcosystems #Values

Martin Breyl

Executive director of BoD | ESG and Sustainability leader | Project & Product Manager financial sector and fintech | Expert in strategy, digitalization and business transformation

1 年

I like the article very much as it is describing sustainability in business from business perspective on the first place. And this is how we should approach the sustainability before we started to be "scared" from current and comming regulation frameworks.

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