We recently published a new edition of the report, “Introducing the Lux Sustainable Innovation Model,” updating an approach we first took in 2021. The Lux Sustainable Innovation Model is designed to help executives structure and prioritize their sustainable innovation efforts — ensuring they are addressing the full breadth of opportunities and have the tools needed to succeed — and I’d encourage you to check it out and let us know your questions and feedback. But I wanted to take this opportunity to reflect on how the sustainable innovation landscape has changed over the last couple of years.
For one, sustainability has proved, contrary to some cynical expectations, to be a pretty resilient trend, even though it has been a pretty turbulent period in the macro business environment. There’s been some backlash against the buzzy “ESG” trend in investing, and firms know they need to be cautious about opening themselves to claims of greenwashing, but sustainability consistently remains a key driver and priority for innovation leaders we speak with at our clients.
There is definitely a growing trend in understanding that, as we wrote in 2021, “Sustainability alone is not a value proposition” — sustainable innovations need to have a clear business impact as well, and those pursuing them need to be able to make a financial case, not just an ecological one (see my colleague Ujwal’s upcoming webinar “Making Sustainability Irresistible: Unlocking the Desirability Formula” for some provocative thoughts on how to do so). But even this trend I think is a sign of the maturity of the field, an indication that companies are making bets with concrete stakes and pursuing real business opportunities.
The more challenging story for sustainable innovation is another point we made in two years ago: “Already inefficient innovation processes will struggle to incorporate sustainability.” Evaluating public policy, consumer insights, environmental and social impacts, and novel business models often still aren’t core skills for innovation teams, which can be painfully apparent when it comes time to try to make that essential financial business case.
The good news is we’re seeing a lot of recognition of these needs — our two reports on the Lux Policy Compass have been among our most-read research publications of the year (and you can learn more in our webinar “Decarbonization Policy Global Outlook”). We’re continuing to work with clients on developing tools and frameworks to help innovation teams build those competencies. No doubt there will still be twists and turns in the business landscape, but the importance of sustainable innovation, and of making the business case for it, are going to be constants.