Future thinking: Why sustainability is the next frontier in innovation
Consumer awareness of environmental issues has been growing steadily in recent years, but the pandemic has driven a new wave of interest in sustainability. After witnessing the upheaval caused by Covid-19, many will have reflected on the wider challenges posed by climate change and resolved to do more to limit their own impact.
Demand for a particular kind of product translates into new innovation activity on the part of business, and it is no different when it comes to sustainability.
“I’ve seen a definite shift toward disruptive innovation around sustainability since Covid,” confirms Michael Todd, VP of innovation at Henkel. “Consumers are waking up.”
This consumer interest is motivating businesses such as Henkel to build on the progress they had
already made around sustainability.
According to new research, around half of businesses say they are using innovation to rethink their practices and improve their environmental performance, and 56% believe they will grow market share by making their products more sustainable.
Challenge consumer assumptions
How should businesses innovate their product lines, to make a real and lasting difference? Addressing consumer preconceptions around what is and isn’t impactful is a good place to start.
“You need to understand consumers' perception of products,” explains Uwe Bergmann, head of sustainability management at Henkel. “Consumers see smokestacks on a shampoo factory and assume that that’s where the energy is used. They don’t realize that most of the energy used by the shampoo product is in the use of water and heat in the home shower. So, dry shampoos can make a difference, but consumers may not recognize why at first.”
Open the process
Attaining sustainability in innovation calls for a perception shift within the business as well as among consumers. New ideas and knowledge systems are required, which often means embracing the open innovation models that, until now, some businesses have been reluctant to adopt.
“The more perspectives you have, the better the chances of bringing new ideas into the innovation process,” says Bergmann. “You need suppliers, service providers and customers working together on sustainability, solving challenges in our different sectors. It’s the only way.”
Build a sustainable culture
Innovation fails when businesses do not have a culture that is supportive of, and open to, new ways of thinking and doing. “You can't steer all innovation and all progress centrally, but you can create a culture where people drive it”, notes Bergmann. “It helps that employees already care about sustainability and want to support it. Our finance team, for example, saw the opportunity to link sustainability and our revolving credit facility. We were the first corporate in Germany and the first company within its sector.”
With that in mind, Henkel runs a Sustainability Ambassador Program to encourage staff to share their knowledge across the company, as well as with customers, suppliers and other third parties. Its success relies on the active involvement of each function in the business.
Brands cannot achieve sustainability overnight, but innovation – driven by strong leadership, diversity and tolerance of risk – will be key to success. In the wake of the pandemic, there has never been a better time to motivate the workforce and make positive change.