Industry is always changing – influenced by everything from world events and life changing innovations to customer opinion and the flavour of the moment. One of the most impactful modern changes to industry as a whole, has been sustainability. This hasn’t been a fast process and wasn’t always met with a positive reception – back in the early 1980’s for example, figures on the world stage such as (then) Prince Charles of the UK were seen as somewhat eccentric (at best) for championing sustainable and eco-friendly developments, as it was, at the time, believed to be a fringe fad that wouldn’t gain traction. As we’ve seen though, these people were ahead of their time, and now sustainable industry has become one of the most important considerations for businesses who want to succeed in the modern world. So how is sustainable innovation changing industry?
How Are Companies Reacting to the Need for Sustainable Innovation?
67% of companies have started using more sustainable materials, and 66% are working to increase their energy efficiency, however there is still a lot to do and a need to do it faster – companies who continue to pace their emissions reductions as they did between 2010 and 2019 are unlikely to meet the 2050 target for overall reductions, with only 9% expected to reach the goal.
Because of this need to do better and quicker, sustainable innovation has become a key driver for businesses across all areas of industry, and it’s not just to reduce the environmental impact, there has been a huge rise in the demand for sustainable goods, and consumers are more conscious of what businesses are doing – so the effect on profits and the bottom line cannot be overstated.
Where is Industry Innovation Coming From?
Along with tighter restrictions and regulations being developed across the globe, businesses are looking at financial opportunities such as the EU’s ‘Green Deal’ which is forecast to make 1 trillion euros available in investment.
Investment in sustainability is on the increase. In 2019 it was found that 86% of business owners said that a more sustainable energy usage approach gave them a competitive advantage, and now it’s estimated that one in every three dollars of global assets under management, is already invested in a fund or strategy that integrates Environmental, Social, Governance (ESG) considerations with the capital inflows expected to increase.
Creative technology is being developed to aid in reducing the time and cost incurred by changing infrastructure to a more sustainable framework.
What Examples Are There of Sustainable Innovation, What Industries are Leading the Way?
This drive to improve sustainability and operate more effectively with eco-friendly alternatives have been seen across every industry in the planet. Some of the most notable innovations include:
- Eco-friendly biofuel
- Solar glass
- Edible cutlery
- Smog vacuum cleaners
- Green Buildings
In 2020, Capital on Tap analysed sustainable corporations and start-ups and found that the most sustainable industries were:
- Electrical Equipment
- Semiconductor Equipment
- Food and Beverage
- Industrial Conglomerates
The countries that were noted as having the most sustainable businesses were:
- USA – with 71 leading sustainable corporations
- France – with 35
- UK – with 33
- Canada – with 21
- Japan – with 19
- Germany – with 17
- Finland – with 16
- Sweden – with 15
- Netherlands – with 12
- Denmark – with 11
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How is Sustainable Innovation Expected to Continue?
The push for sustainability isn’t going to slow down or go away, and businesses of every level and size will be expected to do their part to create a cleaner, greener future.
In 2022, some of the most popular trends for sustainability included:
- Increasing renewable energy sources and encouraging alternative power to vehicles and buildings (other than fossil fuels).
- Developing clean air initiatives and reducing carbon emissions.
- Disclosing carbon emissions and sustainable data with ESG Reporting and aligning with global initiatives (such as the UN Sustainable Development Goals).
- Aiming for net-zero emissions.
There is still a lot of work to do, and for companies to thrive, grow, and become industry leaders – the expectation is that ESG and Sustainability will become a core principle. Customers are voting with their wallets, and actively choosing to support businesses who are transparent and clearly active in their environmental activities – even if it means they are paying more. Becoming a sustainable business is not an over night accomplishment, and it does require careful planning and strategy, but those that don’t take on the challenge, and become more eco-friendly will find themselves left behind, and losing their customers, investment opportunities, and reputations.