13 Feb Sustainable innovation through partnership
In today’s fast-paced business world, corporations are under immense pressure to not only deliver financial results but also to demonstrate their commitment to environmental, social, and governance (ESG) issues. As consumers, staff and investors become increasingly aware of the impact of corporations on the world around them, ESG / Sustainability has become a critical factor in building brand reputation and creating long-term business value.
While the many Boards have approved, and CEO’s announced, inspirational ESG objectives, the majority lack a true strategy around HOW they plan to achieve their targets. In 2023 stakeholders are highly critical of companies that say one thing and do another. The risk of accusations of Greenwashing are real and companies are rightfully scared of such accusations. So how do you turn ambitions into action?
One company that is setting an example for the rest is Coca-Cola Europacific Partners (CCEP). CCEP has committed USD250million over the next three years to support the achievement of their ESG goals. The Asia-Pacific Ventures Team has partnered with sustainable innovation specialists EarthTech to find and engage with solutions that will help decarbonize their supply chain.
Katrina Edillor, the Head of CCEP Ventures Australia, Pacific and Indonesia, believes that large corporations, with their prominent brands, need to take immediate action to prove to their stakeholders that they are committed to transforming their business towards sustainability. She believes that this will ensure the prosperity of people and planet.
Anthony Moorhouse, CEO of EarthTech, expressed his pride in partnering with CCEP in their aggressive steps towards making their entire supply chain sustainable. He emphasized the importance of embracing sustainable innovation for corporations to achieve their ESG goals and create a better future for all.
Sustainable innovation is crucial for companies that want to achieve their ESG goals for several reasons. Firstly, it helps to address environmental and social issues such as climate change, waste reduction, and social inequality. Secondly, it can provide a competitive advantage by positioning companies as leaders in their industry. Finally, it can help to build brand reputation and increase consumer trust, which can translate into increased sales and profitability.
Incorporating sustainable innovation into a company’s strategy requires a shift in mindset and culture. It requires companies to think beyond their traditional business models and to embrace new ways of doing things that prioritise environmental and social impact. For example, companies may need to develop new products and services that are more environmentally friendly, reduce waste and emissions, and promote sustainable sourcing.
However, while the why and what is obvious, the how is more complex. Companies that choose to rely on status quo business practices and procurement systems to transform their value chain into a sustainable one are unlikely to move fast enough to stay on the right side of stakeholders. To transform fast enough, companies only have 5 levers to pull.
- Retreat. As the risk of Green Washing increases, companies with an ESG / Sustainability agenda, but no tangible action plan could choose to turn back and reduce or remove their sustainability ambitions. It would be a big call for a company to make in the current market, but better in the long run than sustained accusations by stakeholders or regulators of Green Washing.
- Internal Innovation: Companies may choose to generate innovation internally, utilising the skunkworks strategy. Generating innovation internally has the benefit of engaging existing talent to reimagine a company’s value chain, by people who truly understand the company and its systems, culture and stakeholders. However, for companies who do not currently have an innovation-centric culture that embraces change, risk and failure-as-a-lesson, relying on internal innovation may prove disappointing.
- Pilot Programs / Fast Tracked Procurement. What is most impressive about the CCEP Ventures case study is that the business realised that their traditional procurement processes would struggle to achieve the required rapid transformation and were challenging for early-stage innovators to navigate successfully. CCEP has therefore embarked on an ambitious program with EarthTech to carry out pilot programs with cutting edge innovation and fast-tracking procurement systems for suppliers who can help them achieve their ESG Strategy.
- Mergers and Acquisitions. M&A is often the preferred method of boosting capability and capacity aligned to corporate strategies. However as most of the best innovation in the ESG space is not yet at scale, few M&A targets exist. Further, so many M&A transactions fail because large corporates buy and then bury the true value of the acquired company via bureaucracy and risk adverse decision making.
- Corporate Venture Capital. Corporate VC, particularly in the ESG sector is booming, with corporations willing to invest in innovation, without the need to own the innovations outright. This gives the innovators the capital and clients that they need to grow, without killing off their entrepreneurial spirit.
In conclusion, it is essential for large corporations to embrace sustainable innovation if they want to achieve their ESG goals. By partnering with experts in the field, corporations like CCEP are leading the way in creating a sustainable future for all. It is time for other corporations to follow suit and take tangible steps towards a greener and socially responsible future.