The biggest sustainability challenge today isn’t a lack of enthusiasm. We observe many more business leaders every day who are eager to engage in sustainability efforts, driven by factors such as government regulations, societal expectations, stakeholder demands, or their own aspirations.
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The real challenge lies in effectively harnessing this enthusiasm to create meaningful results. This requires more than companies monitoring their own carbon footprint; sustainability thinking in business should go beyond climate change and carbon emissions. It requires strategic thinking.
Sustainability becomes strategic when enthusiasm evolves into a clearly defined set of priorities. To make a substantial difference, sustainability initiatives must be economical, benefiting society, customers, and the companies implementing them—a triple win.
However, there aren’t ready-made frameworks and tools to analyze and discuss sustainability opportunities from a strategic point of view. In recent years, new models for this purpose have been developed and applied to several business settings.
Executives need these models, tools, and best practices to identify key sustainability projects, prioritize them effectively, and integrate sustainability into their decision-making processes. Armed with these resources, they can become agents of sustainability.
The INSEAD Business Sustainability Awards were launched to recognize such agents of sustainability among the school’s alumni. The inaugural winners were FUL Foods, Eavor Technologies, GHGSat, and EcoVadis. Each of these businesses provides a valuable lesson on identifying the sustainability needs firms are best positioned to tackle and integrating sustainability into business propositions.
Steps toward organizational sustainability
Balance consumer demands with sustainability benefits
FUL Foods put sustainability at the center of its strategy from the very beginning. The three co-founders—Julia Streuli, Sara Guaglio, and Cristina Prat—started the company with the aim of promoting microalgae, one of the most resource-efficient and nutrient-dense substances on earth, as a food source.
The team knew that while consumers increasingly care about sustainability, the key drivers of consumer behavior remain the same: taste, price, and convenience. New food solutions must meet these core consumer demands in addition to offering sustainability benefits.
FUL Foods was motivated and well positioned to take on this challenge. The company began by baking sustainability into the core of its business model and mission. This means that the pursuit of profit and purpose are in alignment: The more microalgae they sell, the more effect they have on climate and human health.
Actively shape the environment for adoption
Eavor Technologies’ groundbreaking geothermal technology provides a scalable and reliable source of clean power. But it wasn’t enough to develop an innovative clean-tech solution, said president and CEO John Redfern. Apart from market challenges, Eavor had to dedicate considerable effort toward lobbying governments. Without the right regulatory environment, unaddressed negative externalities could have lead to a misalignment between business goals and societal needs.
Eavor also faced pushback from more entrenched competitors, not only from traditional oil and gas but also from renewables (wind, solar, and storage) and more conventional forms of geothermal, such as enhanced geothermal systems. Redfern says it’s imperative for your startup to navigate carefully to prevent competitors from tilting the playing field against you.
Tailor solutions to meet diverse customer needs
GHGSat’s mission is to leverage space technology to combat climate change. It does that by providing accurate and actionable greenhouse gas emissions data. CEO Stephane Germain explains that the most important challenge for any business is to clearly understand customer needs—in GHGSat’s case, specifically regarding customers’ greenhouse gas emissions.
Many of its customers are heavy industrials, and GHGSat quickly learned that their needs vary significantly by industry, country, and time. By carefully considering these differences, GHGSat can provide highly relevant data and insights that empower its customers to make informed decisions about emissions reduction. GHGSat’s focus on customization has been crucial, allowing it to tailor and scale its services to meet its customers’ different and increasingly urgent needs.
Change the narrative to get customers on board
EcoVadis is a universal sustainability ratings solution that guides companies to manage ESG risk, ensure compliance, meet sustainability goals, and drive significant performance improvements across their value chains.
CEO Pierre-François Thaler says that the company shifted the narrative to demonstrate that sustainability represents not just a cost center but also a wealth of opportunity. For example, it demonstrated that suppliers with good EcoVadis ratings could win more business from their key B2B customers.
The initial hurdle involved articulating the value of sustainability, using language that would resonate with various stakeholders, particularly procurement organizations and SMEs. This was achieved by developing metrics and ratings.
Seizing the momentum
A common thread among all four companies is that they started with the “why.” This served as their compass. In essence, transforming enthusiasm into concrete action starts with defining a specific challenge and exploring avenues to turn it into a golden opportunity. With commitment and ingenuity, positive change is an achievable reality.
Published Sept. 5, 2024, by INSEAD.
Listen to the podcast episode on how the INSEAD Business Sustainability Program can inspire leaders to drive sustainable practices across industries. You can also explore a full series of webinars about business and sustainability run by Karel Cool, and nominate INSEAD alumni for the INSEAD Business Sustainability Award 2024.
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