On the one hand, the "time-to-market" of sustainability is taking place (i.e. when the demand for sustainable solutions becomes dominant in the market) due to increasing pressures in terms of climate disasters and impacts of pollution on living and working conditions. 

The need to address these issues will grow, and companies prepared to do so will see their business grow significantly. Those who are not prepared will be too late in the time-to-market to respond to this new need and paradigm and their businesses will not survive.

We can already observe today stakeholders are increasingly demanding active participation in environmental protection and social responsibility and traditional price competition models are therefore becoming insufficient.

From this perspective, sustainability-driven innovations will have to become the new core of companies' innovation strategies.

On the other hand, there are two types of sustainability practices implemented within companies: common and strategic practices [1]. The first ones are those that companies in the same sector eventually all set up over time. These only impact on market valuation multiples: they are therefore necessary conditions for survival without being a competitive advantage. These are often the adoption of waste, water or energy management systems or the implementation of environmental standards for example.

Strategic practices are those practices that do not converge over time for companies in the same sector, i.e. they are specific to the company that has implemented them: these practices directly impact both the return on capital and the market valuation multiples. These practices correspond to sustainable innovations and so to the implementation of a sustainable innovation strategy for the company: through this strategy, the company adopts a unique and innovative position, not only leading and influencing its market but also generating better revenues.

Thus, without common sustainability practices, on the one hand, a company's chances of survival become complicated and, on the other hand, without a sustainable innovation strategy, its chances of standing out in its market and becoming a leader will also be difficult.

Sustainability therefore creates innovation and even becomes the main driver of innovation:

However, many companies are convinced that the more environmentally friendly they become, the more it will erode their competitiveness. They believe that it will increase costs and not produce immediate financial benefits. Managers behave as if they must choose between the social benefits of developing sustainable products or processes and the financial costs involved. 

But this is simply not true. Ram Nidumolu, C.K. Prahalad and M.R. Rangaswami [2] have been studying the sustainability initiatives of 30 major companies for some time.

Their research shows that sustainability is a source of organizational and technological innovations that generate both turnover and EBITDA. Becoming environmentally friendly reduces costs as companies end up reducing the inputs they use. In addition, the process generates additional revenue through better products or allows companies to create new businesses. In fact, as these are the objectives of the companies' innovation strategy, the authors find that smart companies now see sustainability as the new frontier of innovation: they have fully adopted a sustainable innovation strategy.

Indeed, the quest for sustainability is already beginning to transform the competitive landscape, which will require companies to change the way they think about products, technologies, processes and business models. The key to progress, especially in times of economic crisis, is innovation. Just as some Internet-related companies survived the crisis of 2000 to challenge the companies already on the market, sustainable companies will emerge from the current crisis to disrupt the status quo. By making sustainability a goal today, the pioneers will develop skills that their rivals will find difficult to match. This competitive advantage will serve them well, as sustainability will always be a global part of development. There is no alternative to sustainable development. Sustainability becomes the main driver of innovation.

In addition to lowering their costs and increasing their revenues through the achievement of environmental goals, those companies that choose a sustainable innovation strategy gain real competitive advantages and the ability to become market leaders at the time of the time-to-market of their market segment.

Because that’s the main challenge of this century, the Impuls’Innov [3] company gave itself the mission  to support companies and organizations in their sustainability innovation strategy, in imagining and building up the concept of global sustainable innovation based on 3 principles covering all the aspects of sustainability: change your mindset in reconnecting with Nature to innovate in a clever way and with long term, think about your activity globally as an ecosystem and consider interactions with all stakeholders of your environment as a puzzle. This concept is actionable into a strategy to set up for every company or organization: it’s a pragmatic method to set up a global sustainable innovation strategy step by step. Impuls’Innov will be really pleased to help you to reach this target for your organization.

References:

1. Yes, sustainability can be a strategy, I. Ioannou & G. Serafeim, Feb 11, 2019, Harvard Business Review
2. Why Sustainability Is Now the Key Driver of Innovation, Ram Nidumolu, C.K. Prahalad, and M.R. Rangaswami, September 2009, Harvard Business Review
3. https://impulsinnov.hubside.fr/sustainable-innovation