We're following all the latest trends live from Davos. Below, we discuss how sustainability is key to growth. Read our other insights from the World Economic Forum, including what purpose means in the post-digital era and four ways to address pressing challenges, and watch our wrap-up of the week.
At the 50th World Economic Forum (WEF) in Davos, countless leaders told us they needed to embrace disruptive innovation urgently to drive radical growth. This desire for action was the central theme of the week-long gathering of business and political leaders. But accompanying every mention of innovating for growth was the question of sustainability. Thankfully, we know this is no longer an either-or question. Today, sustainability drives growth.
The urgent need to accelerate progress towards achieving the UN’s Sustainable Development Goals (SDGs) was clear at Davos. Leaders now understand there must be a change in gear if we’re to achieve the 17 goals by the 2030 target. And doing so won’t be a cost to business that sees no return – the innovations needed to reach the goals represent a $12 trillion annual opportunity.
It’s time to get serious about sustainability – to unlock trillions of pounds worth of commercial opportunities and create a positive human future.
Two of the key principles behind unlocking this growth are relatively easy to describe. They come up in most conversations these days: the importance of purpose and making sustainability your starting point. Get those two things right and some of the hard stuff is out of the way.
It takes bravery to make the changes needed to grow through innovating for sustainability. You may find your approach challenges the existing core business and faces resistance from vested interests. That’s where purpose helps.
Purpose is the lighthouse. A purpose that you can clearly articulate, that everyone embraces and that’s intrinsic to the business will guide you and your teams. It won’t tell you tactically which way to go, but it’s an indicator when you’re heading in the right direction.
Radical change is only achievable when a purpose and purposeful leadership drive the business. That’s certainly been the case with Dutch energy company Ørsted. Once powered almost exclusively by fossil fuels, Ørsted made their purpose becoming the world’s leading sustainable energy company. And then set about fundamentally transforming the business to meet this goal. They’re on track to be entirely carbon neutral by 2025.
Purpose also powered efforts by US-based Milliken & Company. As a leading producer of additives that give plastics their colour, transparency and toughness, Milliken wanted to create a more sustainable future for plastic packaging. As experts in helping organisations become more sustainable, we teamed up with the company and developed a robust strategy to mitigate the environmental impact of single-use plastic packaging.
Consumers aren’t looking for superficial sustainability credentials. That makes sustainability key to winning and keeping customers and driving innovation. So, the right approach is to build sustainability and circularity into the business, rather than overlay them.
For example, we advised a leading financial institution to design a consumer product that people could return after using it. Our client could then re-manufacture pats of the product into new units. The approach was not only good better the environment, but it reduced the cost of materials, allowing the company to increase their margins.
And when we designed a recyclable pouch with Dunnet Bay Distillers, we foresaw that people would be more likely to re-order from the company if they knew they were going to re-use the initial premium bottle, rather than throw it away. Now that’s become the defining characteristic for this young business to thrive in a crowded and competitive marketplace.
Re-orienting your business to take advantage of the sustainability opportunity will mean innovating in new and exciting ways. Whether you’re a multi-national financial institution, a global consumer goods company, or a start-up, your customers will demand to know what you’re doing to make the world more sustainable. Define your purpose, then discover innovative ways to bake sustainability into your business model. Do that and you’ll be able to take advantage of the profound opportunities to grow your business and create a positive human future.