How to Drive Sustainability and Innovation Through Uncertain Times

Risk often elicits reactionary behavior; it’s our evolutionary lizard brain kicking into overdrive, compelling us to avoid risk and seek safety at any cost. And it works much the same in organizations as they strive for steady ground and shift focus to immediate needs when volatility and uncertainty are high. In this article, we provide five suggestions for how organizations can navigate complex risks in an ever-evolving landscape while driving innovation and delivering on the Sustainability Imperative.

So, indeed, as the world grapples with these increasingly volatile and uncertain times, initial instincts may be to figuratively bunker down, fortify business as usual, and protect existing customers, workforce, and cash flow.

However, this approach can lead business leaders to lose sight of the big picture when it comes to executing innovation pipelines and sustainability agendas—leaving a company and its customers far worse off in the long run.

No one ever achieved growth or inspired a following from a defensive crouch. Yes, an organization’s survival and success are determined by its capacity to mitigate risks—but also to identify opportunities, mobilize the required resources for action, and innovate for a more sustainable future.

In the following, we outline five ways organizations can drive sustainability and innovation through times of uncertainty:

1. Move from business as usual to beyond compliance

Business as usual is the easy path, free of change or disruption. While perceived by many as security, in reality, it likely signals complacency and inaction. Business as usual represents the continued pursuit of profits and growth on current trajectories, often at the expense of natural resources, the environment, communities, and future generations. Beyond the toll on planet and people, business as usual also inhibits growth and vision; there are few opportunities to innovate along the path of least resistance.

Alternatively, the most innovative companies of our time are those that embrace uncertainty and are unafraid to fail, defining and forging their own path forward. It is no coincidence that they also tend to be leaders in sustainability as they exhibit a culture of approaching constraints with creativity, questioning the status quo, and valuing new ideas. Here is where we see companies striving to go Beyond Compliance, engaging in meaningful Brand Activism and ESG Investing, and, ultimately, ensuring that their business activities have a net positive effect on the environment and society.

Inspiration: Patagonia pledges all future profits to fight the climate crisis.

Clothing company and environmental defender Patagonia is the embodiment of the net-positive philosophy. In late 2022, Patagonia founder Yvon Chouinard announced that all future profits, in perpetuity, will go toward helping to fight the climate crisis. Chouinard explained, “Instead of ‘going public,’ you could say we’re ‘going purpose’...Instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of all wealth.”

2. Embrace radical transparency

Transparency is upheld as a pillar of good corporate citizenship and sustainability. Organizations looking to embrace transparency may often do so to align with growing consumer demands. Discerning consumers are quick to scrutinize, reject opaque business practices, and spot greenwashing. Research shows that 64% of Gen Zs are willing to pay more to make sustainable choices. And making these sorts of informed choices starts with verifying the authenticity of a product’s sustainability claims, Tracing Origin, and providing Evidence-Based Value.

Organizations that embed Radical Transparency throughout their value chain also see benefits that go far beyond consumer trust and loyalty. Transparency plays a crucial role in promoting resilience. By understanding the stakeholders, inputs, outputs, and impacts involved at every stage of the value chain, decision-makers can better anticipate and adapt to potential risks, challenges, and changes.

Inspiration: The Miles Consultancy promotes ESG transparency in corporate mobility

Business mobility solutions provider The Miles Consultancy is set to launch its Mobility iQ app in 2023. As a sort of “mobility Fitbit” targeted at corporates and their employees, the app enables comprehensive transparency in all ground transportation programs, commuting, and fleet car carbon emissions data. By centralizing often-fragmented mobility data, firms can monitor, mitigate, and report on their carbon footprint. Mobility iQ will initially be available across Europe, just as the EU’s new corporate sustainability reporting directive (CSRD) mandates ESG transparency.

3. Foster a culture of open innovation

When risk levels rise, business leaders may feel the urge to turn inward as they seek to strengthen their figurative defenses, i.e. grasping full control of the innovation process and protecting intellectual property with the aim of creating additional competitive advantages. However, for many organizations navigating uncertainty, open innovation may, in fact, result in better outcomes for all stakeholders, including the environment.

Open innovation incorporates external ideas by, for example, tapping into the Creator Economy and creating a framework for Facilitated Co-Creation. Through this approach, organizations can access expertise, technologies, and solutions that they may not possess or be able to develop internally. It enables sustainable innovation that is more inclusive, financially viable, and effective.

Moreover, a culture of open innovation can help organizations first define and then deliver on their sustainability goals. Inherent in the shift from closed, profit-driven innovation models to open and purpose-driven is the participation of all stakeholders. This is the foundation of Stakeholder Capitalism which creates long-term, shared value that is linked to environmental, social, and governance (ESG) factors.

Inspiration: One Planet Business for Biodiversity coalition demonstrates stakeholder capitalism

The "One Planet Business for Biodiversity" (OP2B) coalition is made up of 25 major companies, including Danone, Nestle, and Unilever, who have committed to setting ambitious targets and taking action to protect and restore biodiversity within their operations and supply chains. OP2B is also collaborating with farmers, NGOs, and governments to develop innovative solutions that will benefit all stakeholders, including the environment. Solutions range from new financing models like impact investing and green bonds to regenerative agriculture practices and promoting alternative proteins.

4. Integrate systems thinking into decision-making

Sustainability issues are inherently systemic. Responding to them represents a complex adaptive challenge for organizations, full of unknowns and exacerbated by global economic, legal, and societal forces. To overcome these challenges, organizations can adopt systems thinking—a holistic approach that considers the full range of direct and indirect impacts that sustainability interventions may have, as well as the implications for innovation.

Systems thinking allows the identification of opportunities for innovation that address multiple aspects of a problem, rather than just focusing on isolated components. And it promotes sustainability by encouraging a long-term perspective, rather than just focusing on short-term gains. Compelling examples of systems thinking in action include trends like Circular Economy, Green and Lean, and Automating a Greener World.

Inspiration: Apple automates material recycling to achieve greater circularity

5. Get equipped with the tools to succeed

With risk levels high and the stakes sometimes higher, it is essential to equip your organization with the right tools to succeed. The ITONICS Innovation Management Software is an all-in-one solution for turning your sustainability and innovation strategies into action and, ultimately, into long-term value for you and your stakeholders.

The Innovation OS enables your teams to monitor potential threats and opportunities on the horizon or periphery of your business environment, crowdsource ideas, gain consensus on innovation projects, and future-proof your strategic portfolio to support a more sustainable and prosperous future.

Get started by creating your own trend, technology, and risk radars, or explore the Sustainability Imperative megatrend preset filter available in the Innovation OS. This megatrend encompasses more than 70 trends and technologies that demonstrate cross-industry, systems-level responses to sustainability.

View these drivers of change on the Sustainability Imperative Trend Radar and Sustainability Imperative Technology Radar.

In the video below, our continuous foresight expert guides you through the steps on how to kickstart your innovation journey on the ITONICS Innovation OS.

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5 Ways to Drive Sustainability and Innovation Through Times of Uncertainty