- Strategic planning needs to place social and environmental growth at the core.
- Collaborative efforts with stakeholders, partners, employees, and consumers must be implemented to achieve business, community, and ecological growth.
- Benchmarking sustainability will become essential through greater momentum in regulation, policy, and transparency initiatives.
- Driving change at scale will require a renewed commitment to innovation.
Strategic planning needs to be more agile than ever. Creating solid connections from stakeholder to supplier that can withstand jarring circumstances is necessary for resilience, and is empowering for both individual and organization. Strategic direction will be built on a solid understanding of how change can alter our course. Some of the most significant changes we have had to come to grips with recently include new ways of working, economic and supply chain limitations, and renewed scrutiny from global consumers. Institutions have been probed from various directions, with leaders, stakeholders, and employees alike now being measured against increasingly high social and environmental standards.
→ Success Story: Innovation & Sustainability at Market Leader Fletcher Building
Social and environmental responsibility have to be reexamined. Where strategy, policy, tools, and technologies do not measure up to meet degrees above baseline compliance, organizations must strategize and recommit. Collaborative efforts with stakeholders, partners, employees, and consumers have to be implemented to achieve business, community, and ecological growth. Strategic goals will have to meet internal and external organizational objectives, and crucial consideration should be given to achievable and forward-facing plans.
The UN Development Program estimates that one out of every three dollars spent on development over the past 30 years has been lost to climate events, amounting to a loss of some $3.8 trillion.
How Innovation Can Power Strategic Sustainability Goals
Climate resilience has become one of the most crucial considerations for strategic direction. Investors and end-users alike will expect thorough and diligent analysis and long-term commitment to meet international climate guidelines. As climate concerns become more urgent, sustainable innovation will pave the way to addressing economic, social, and environmental challenges. Innovation should be an explicit focus if organizations are to extend product and process life cycles and build competitive advantage. Key questions around organizational innovation should interrogate where innovation can be encouraged and how it can shape strategy—as well as which types of innovation should support strategy.
Guidelines such as the UN Sustainable Development Goals (SDGs) and investment taxonomies exist to help organizations plan and implement strategies that are aimed at meeting climate change targets. While many national and regional taxonomies are still in development, the EU technical experts group on sustainable finance (TEG) has recently published its report on EU taxonomy—the world's first-ever "green list."
International Imperatives for Sustainability
The EU taxonomy regulation acts as an organizing system for sustainable economic activities. It aims to create standardized language and sets out requirements for investors and businesses for all investment and business activities. Listed companies will have to meet disclosure obligations that include presenting annual reports, sustainability reports and revealing the extent of their taxonomy-aligned activities. The EU taxonomy aims to create enabling conditions to meet the Paris Agreement goals, outlined in the 2030 Agenda for Sustainable Development. The classification framework was developed to bridge the gap between the Paris agreement goals and investment and business activities.
The 197 countries that have adopted the Paris agreement will put measures in place to limit global warming. These measures will include economic and social transformations, and countries will need to submit their plans, known as nationally determined contributions (NDCs). Both the Paris agreement and the United Nations 2030 Agenda for Sustainable Development signal a paradigm shift that takes a top-down approach. Corporate action will be crucial to achieving these sustainability targets, and strategic frameworks will have to align to global and local roadmaps.
The SDGs set out by the United Nations encourage governments and organizations to acknowledge that facilitating economic prosperity and ending poverty goes hand-in-hand with strategies that reduce inequality, improve health and education, and drive economic growth – while taking action against climate change and endeavoring to preserve the natural environment.
Benchmarking sustainability will become essential through greater momentum in regulation, policy, and transparency initiatives. Examples of other frameworks that act as systemic paradigm shift catalysts include the International Platform on Sustainable Finance and the Chinese two sector-based taxonomic frameworks—the Green Industries Guidance Catalogue and the Green Bond Endorsed Project Catalogue.
Although the International Platform on Sustainable Finance (IPSF) does not act as a regulating body itself, its work aims to pave the way for global standards and taxonomies to scale climate change efforts. The Green Industries Guidance Catalogue and the Green Bond Endorsed Project Catalogue intend to act as guidance systems to prioritize climate change projects. Frameworks will likely differ across countries, but goals remain the same. And to achieve these at scale will require innovation as part of strategic mapping.
"Next-practices" are those that evolve existing paradigms; introducing better ways to synthesize and network capabilities to produce shared value."
Innovation Aligned with Sustainability Goals and a Driver for Growth
In a conversation between ITONICS and Fletcher Building Limited, the leading construction company acknowledges that the industry has to realign itself. Major investments in the public sector, particularly in hospitals and other medical facilities, are pushing many construction companies towards rethinking and innovating, and emerging industry drivers such as sustainability and green investment are shaping new conditions.
In the future, leading organizations transition from disjointed corporate social responsibility (CSR) initiatives to integrated sustainability-focused innovation.
As the largest vertically integrated building and construction company in New Zealand, Fletcher Building Limited employs over 15,000 people across 30 businesses and spans Australia and the South Pacific. As a global leader in construction, the company needs to be aligned to meet climate change targets and be positioned to weather any arising crisis storms. Setting company-wide innovation as a strategic goal sets the foundation for dominating the local industry as a sustainable market and innovation leader in the future.
The Fletcher Building Limited innovation initiative needed to create company-wide synergies, generate evidence and transparency, and align with its mission to fuel growth opportunities and company-wide collaboration. The ITONICS innovation platform was integrated into the company's objectives and positioned to support its ambitious goals.
It was necessary for the construction company's new innovation culture to be anchored in a fit-for-purpose innovation platform that could incorporate an initial situational analysis with growth objectives.
Leading innovators such as Fletcher Building leverage new conditions to shape mindsets, processes, and opportunities through innovation. Being a bold innovator is a commitment, and innovation systems that deliver growth opportunities are paramount. Supported by the ITONICS platform, the Fletcher Building Innovation Team now steers an innovation agenda that aspires to meet international imperatives for sustainability across the company.
Driving change at scale has to be deliberate, and to spearhead transformation, organizations need to do more than generate countless ideas. Innovation-led growth needs to be embedded cross-company. Innovation is directly referenced by the UN’s SDGs as a pivotal piece of the puzzle towards positive change. Therefore, organizations that promote innovation top-down as well as bottom-up, will become leaders in accelerating climate change efforts.
To read more about how Fletcher Building Limited approached and met some of their innovation challenges, download the case study here.