Integrate Sustainability and Innovation to Find New Opportunities
Five common innovation practices can help leaders pursue sustainability as a growth strategy.
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Companies that think about sustainability as an opportunity for innovation and growth instead of a compliance problem find ways to overcome challenges in balancing performance metrics with environmental objectives. Five innovation practices can help: reframing sustainability as a growth opportunity, partnering with mission-aligned users, seeking new collaborators, thinking long term about future needs, and creating stakeholder coalitions.
A sustainability-focused business strategy often requires solutions that do not yet exist. The ambitious bets that companies make on the future, such as decarbonizing their operations, can seem out of reach and require innovation to make tangible progress.
Yet, sustainability-driven innovators face two interconnected challenges. First, innovation and product development teams are increasingly required to incorporate sustainability criteria without compromising product performance, particularly in terms of cost and quality. Second, many sustainability objectives involve complex changes to a company’s value chain — and to society as a whole — demanding solutions that extend beyond a single company’s immediate control.
As a result, leaders may struggle to connect their sustainability goals with the transformative changes needed to achieve them. To learn how others have done this, we studied a dozen companies in a range of industries that have ambitious sustainability objectives and have made them the driving force for innovation in their products and operations.
These companies start with practices that will be familiar to innovation leaders. First, they reframe sustainability as a source of strategic growth rather than a compliance problem. Then they collaborate to develop new products and processes with lead customers and trusted partners who share their commitment to sustainability.
However, achieving their aspirations requires more than the efforts of innovation and product teams, so these companies have changed how they plan, invest, and compete. They involve business functions such as finance in creating a long-term strategic vision for sustainability. Further, they engage additional stakeholders — including competitors, universities, startups, and regulators — in collectively transforming their industries.
Balancing Sustainability With Traditional Performance Metrics
Innovators face two core challenges to incorporating sustainability. One of the most immediate and persistent is upholding traditional business metrics such as cost, quality, and performance for new products. For example, the Fabrics business within W.L.
References
1. T. Carey and R. Antoshak, “Lessons From a Sustainable Fashion Bankruptcy,” Stanford Social Innovation Review, July 24, 2024, https://doi.org/10.48558/24DY-JX79; and C.H. Lizarraga, “How a Plan to Fix Fashion’s Waste Crisis Unraveled in Just 12 Months,” Bloomberg, April 12, 2024, www.bloomberg.com.
2. L.F. Monteiro and I. Visnjic, “Can Holcim Build a Sustainable Future for the Construction Industry?” Insead case no. 6972 (Fontainebleau, France: Insead Publishing, 2025).
3. Carey and Antoshak, “Lessons From a Sustainable Fashion Bankruptcy”; and Lizarraga, “How a Plan to Fix Fashion’s Waste Crisis Unraveled.”
4. H.W. Chesbrough, “Enel X: Driving Digital Transformation in the Energy Sector,” Haas School of Business case no. B5957 (Oakland, California: The Regents of the University of California, 2020).
5. L.F. Monteiro, A.-M. Carrick, B. Tanure, et al., “Suzano’s Innovability Transformation: The Next 100 Years,” Insead case no. 6897 (Fontainebleau, France: Insead Publishing, 2024).
6. Monteiro and Visnjic, “Can Holcim Build a Sustainable Future for the Construction Industry?”
7. “How to Set Science-Based Targets?” Science Based Targets Initiative, accessed May 29, 2025, https://sciencebasedtargets.org.
8. Monteiro and Visnjic, “Can Holcim Build a Sustainable Future for the Construction Industry?”
