Sustainability Drives Innovation and Generates Returns

Sustainability is a key driver of innovation which in turn provides meaningful returns. Innovation affords an opportunity to rethink and improve a product or service to create value and enhance brand appeal. In addition to being good for consumers, sustainable innovation has environmental and social benefits. This can boost a brands reputation and translate to improvements in brand equity (trust, awareness, regard, and esteem). One of the most powerful bottom line benefits of sustainability comes from innovation that reduces costs and enhances consumer appeal.

Sustainability leader Unilever offers a great example of how sustainability and innovation partner well together. For example, Unilever created a cleaning product that is a fraction of the size and weight of similar products and uses far less resources than its predecessor. This product provided a powerful competitive advantage while at the same time reducing costs for resources and transportation.


The relationship between sustainability and innovation has been studied for more than a decade. In 2009 research conducted by Ram Nidumolu, C.K. Prahalad, and M.R. Rangaswami demonstrated that sustainable innovation is an important way of increasing profits. Their research showed that “sustainability is a mother lode of organizational and technological innovations that yield both bottom-line and top-line returns.”

These researchers have suggested a five stage process:
1. Seeing compliance as an opportunity
2. Making value chain sustainable
3. Designing sustainable products and services
4. Developing an new business model
5. Crafting next practice platforms

While sustainability is a catalyst for innovation, to succeed businesses must be prepared to embrace change.