In a world largely governed by capitalistic tendencies, profit has been the major factor that pushes businesses to innovate. This profit-driven innovation, which in extremes, could be translated into greed has ruled the business world for quite a long time.
Luckily, the tides are changing and sustainability is now the key driver of business innovation, a move that will create a win-win situation for people, companies, and the environment. The quest to get businesses to walk the sustainability road has never been easy, with many executives citing cost increment without commensurate profit as the main reason why they don’t want to go sustainable with their companies.
If we look carefully between the lines, sustainability is the new child on the block that will drive business innovation. Below are some of the ways on how it can be accomplished.
Sustainability is the new competitive edge for businesses
Just like how the internet was the major factor driving business competitiveness decades ago, sustainability is now driving competitive advantage for businesses. This is how businesses are doing it:
Energy efficiency: As the world’s population grows, the pressure on energy consumption is increasing. In order to ensure that we don’t destroy our environment in trying to meet our needs, international bodies and government institutions have called for clean energy practices. These practices are focused on reducing greenhouse gas emissions, eliminate energy waste, and curb climate change among others.
As such, many businesses today are not just moving to energy efficient means of running their manufacturing, they are also designing new and innovative ways of generating energy efficient power, including solar and wind power among others. Governments and individuals are also using solar and other renewable energy sources
Sustainable business models: businesses today are also using sustainability to drive innovation by building and running sustainable business models that inculcate short and long-term goals for people and the environment.
These efforts have started paying off with businesses that rely on sustainability getting a more competitive advantage over their counterparts that do otherwise because these sustainable-oriented businesses are better positioned in the minds of today’s environmentally friendly customers.
Sustainability compliance is the new business regulatory opportunity
The fight between governments and environmentalists on one hand and businesses on the other has existed for a long time. Today, businesses are making efforts toward sustainability laws.
Not only are these businesses complying with existing sustainability laws, they are also changing their corporate structures to ensure that sustainability becomes a discussion topic at the top level.
These moves have created a lot of opportunities for sustainable-inclined businesses in the regulatory realm as governments and environmental advocates are happy about the efforts some of these businesses are making. Businesses that now want to innovate are inculcating sustainability measures to make sure they are on the right side of governments and environmentalists.
Sustainability as the new profit driving business innovation
While profit still drives many business innovation efforts, sustainability is now taking over. Many companies had the notion that sustainability only increases costs, does not bring revenue, and therefore, should only be done as a corporate social responsibility. Today, these businesses have realized the cash that comes with being sustainable.
Businesses that build sustainable products and services widen their revenue pools because they end up using fewer resources, which in turn reduces the cost of production. Since these goals (cost reduction and profitability) are paramount when it comes to a company’s survival, businesses are now waking up to realize that going sustainable is profitable and positions the business for long-term survival. This is undoubtedly driving business innovation fingered by sustainability.