Sustainability can be a strategic driver of growth for companies that know how to internalise it.
The biggest sustainability challenge today is not 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.
The real challenge lies in effectively harnessing this enthusiasm to create meaningful impact. This goes beyond companies monitoring their own carbon footprint; sustainability thinking in business should go beyond climate change and carbon emissions. It requires strategic thinking.
However, there aren’t ready-made frameworks and tools to analyse and discuss sustainability opportunities from a strategic point of view. In recent years, one of us (Karel Cool) has developed new models for this purpose and applied them to several business settings.
Executives need these models, tools and best practices in order to identify key sustainability projects, prioritise 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 was launched to recognise 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.
1. Balance consumer demands with sustainability benefits
FUL Foods put sustainability at the centre of their strategy from the very begninning. 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 behaviour remain the same: taste, price and convenience. New food solutions must meet these core consumer demands in addition to offering sustainability benefits.
FUL Foods were motivated and well-positioned to take on this challenge, and started their company by baking sustainability into the core of business model and mission. This means that their pursuit of profit and purpose are in alignment – the more microalgae they sell, the more impact they have on climate and human health.
2. 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 cleantech solution, explains President and CEO John Redfern. Apart from market challenges, Eavor had to dedicate considerable effort towards lobbying governments. Without the right regulatory environment, unaddressed negative externalities may 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. As a startup, Redfern says it is imperative to navigate carefully to prevent competitors from tilting the playing field against you.
3. Tailor solutions to meet diverse customer needs
GHGSat’s mission is to leverage space technology to combat climate change, and they do 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, and in GHGSat’s case specifically with regards to customers’ greenhouse gas emissions.
Many of their 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 their customers to make informed decisions about emissions reduction. Their focus on customisation has been crucial, allowing them to tailor and scale their services to meet their customers’ different and increasingly urgent needs.
4. Change the narrative to get customers on board
EcoVadis is a universal sustainability ratings solution guiding companies to manage ESG risk, ensure compliance, meet sustainability goals and drive impactful performance improvements across their value chains.
CEO Pierre-François Thaler explains that the company shifted the narrative to demonstrate that sustainability represents not just a cost centre but a wealth of opportunity. For example, they 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 organisations and SMEs. This was achieved through the development of 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.
