Create Focus Areas Around Your Organization’s Sustainability Goals to Drive Breakthrough Innovation In a Stakeholder Economy.

Get the Customer Hooked

I love scotch. Or whiskey in general, whether it’s rye, bourbon, Irish, or Japanese, you name it. Of course, you’re not reading this to learn about my penchant for whiskey, but it sets the context for the following story.

Recently, I came across a peculiar bottle during one of my online whiskey shopping exploits. The bottle in question, a single malt, was simply called “Rhino Whiskey”. It certainly piqued my curiosity. As I inspected the bottle more closely, I noticed an equally peculiar slogan: “Distilled in Scotland and Giving Back to Africa.”

Hmm. As someone who is familiar with marketing tactics, I don’t usually fall for this stuff, and sure enough I didn’t — at first. But, the bottle left an impression on me. It’s not much, but it’s an important start: I’m hooked on the idea, so much so that it inspired me to write this article!

Give the Customer a Stake

I love rhinos, too, and now I have the opportunity to support their well-being through my love of whiskey? Apparently so, as the distillery behind this unique scotch made it its mission to highlight the plight of the African Rhino by pledging 5% of all sales to the rehabilitation of baby rhinos, orphaned due to their mothers being killed for their horns, according to their website.

rhinos

“As much as your customers are looking forward to the next big thing, it might not be enough to win over their loyalty, let alone their attention.”

Is it the most innovative idea since sliced bread? Not exactly, but it definitely stands out in the world of whiskey. And, as trivial as my story may appear on the surface, it is nonetheless emblematic of the consumer-brand relationship in a stakeholder economy.

The thing is, as much as your customers are looking forward to the next big thing, it might not be enough to win over their loyalty, let alone their attention, as people grow increasingly  conscientious of their purchasing decisions. Case in point: 76% of consumers will discontinue their relationship with companies that treat the environment, employees, or the community in which they operate poorly, according to PwC’s 2021 ESG Consumer Intelligence Series.

Investors are also taking note. According to Morningstar, environmental, social and governance (ESG) investing funds have more than doubled in 2020 compared to the prior year, capturing a total of $51.1 billion of net new money from investors. The focus on sustainable development is stronger than ever, especially since everyone has a stake in the future.

Upgrade Your ESG Strategy

Put simply, ESG made its grand debut in the mainstream long ago, and organizations that refuse to take a hint might be left hanging high and dry.

At the core of an ESG strategy for some of the world’s largest companies is the United Nations’ 2030 Agenda for Sustainable Development, which, in a nutshell, is a blueprint for organizations to effect meaningful change for society and the environment.

Our latest report, Executive Insights for Innovation Teams, shows that organizations ready to deliver value for — and benefit from — the economic, social, and environmental dimensions of the 2030 Agenda are those with a systematic, enterprise-wide approach to innovation:

In fact, these organizations are 2 to 5x more likely to tap into the opportunities of the 2030 Agenda compared to those that have a departmental and unstructured approach to innovation, respectively.

Set New Focus Areas for Your Next ESG Initiative

A good place to start is to frame ESG initiatives around the sustainability goals of the 2030 Agenda, specifically:sdgsThink of these as your Focus Areas. Identify the ones that align with the business strategy and engage your community of stakeholders in helping your organization create solutions that benefit people, the planet, and profit. Sounds simple enough, right? Right? Easier said than done, but you have to start somewhere at some point.

“A deep dive into the targets of each sustainability goal could reveal untapped opportunities.”

Let’s say our Focus Area is Life on Land, the goal of which is to promote the sustainable use of our ecosystems and preserve biodiversity.

sdg 15

At first glance, this may sound like a distant, abstract goal far beyond the reach of your organization, but remember that (a) a deep dive into the targets of each sustainability goal could reveal untapped opportunities and (b) the challenge is not yours alone to solve. Our 2022 Data on Sustainability report reveals that 16% of organizations use the UN’s targets as KPIs (key performance indicators) to measure and track their progress towards sustainability, while 38% use these in combination with their own.

With that in mind, let’s frame this challenge to get your creative juices flowing:

  • Business Outcome
    • To align our core offering with the values of our company and customers while making positive contributions to life on land.
  • Challenge Statement
    • How can we raise awareness for the preservation of our biodiversity?
    • How can our product positively impact wildlife?
  • Questions for Participants
    • How does your idea align with the values of our company and customers?
    • Does it address a specific sustainability target?
  • Review Criteria
    • Does the idea:
      • Make a significant impact on wildlife?
      • Align with customer aspirations?
      • Create a competitive advantage?
      • Build brand reputation?

Granted, this is a simple example of a Horizon 1 (Incremental) Innovation, which isn’t exactly earth shattering, but starting small is a good way to generate momentum for your ESG campaigns. 

Conversely, real, impactful change comes about the moment you step into the big leagues of Horizon 2 (Adjacent) and Horizon 3 (Transformational) Innovations. These will naturally require more resources, collaboration, time, support — more everything, really. The good news though is that breakthrough innovation can be more satisfying than you think. 

Our report shows that organizations with an enterprise-wide approach to innovation are 2 to 6x more satisfied with their Horizon 2 and Horizon 3 results compared to those with a departmental and unstructured approach, respectively:

satisfaction with H2/H3 results

“Imagine what your organization can achieve in the aim of delighting customers beyond their material needs.”

Pledging a portion of sales to charity is a far cry from the game-changing impacts of Adjacent and Transformational Innovations, but Rhino Whiskey’s story serves as inspiration nonetheless. If they can do it, just imagine what your organization can achieve in the aim of delighting customers beyond their material needs.

Leverage Partnerships to Create ESG Solutions

Creating ESG solutions is as tough as a rhinoceros’ hide. Just like baby rhinos need their mothers, your organization needs, well, not a mother, but let’s say brothers and sisters. As previously stated, the challenge is not yours alone to solve. The complexity of the sustainability goals is such that your employees can’t be expected to have all the answers, which means you’ll have to go beyond the traditional boundaries of internal collaboration by tapping into the collective brain power of your innovation ecosystem. 

Pop quiz: who’s doing it best? As expected, organizations with an enterprise-wide approach to innovation, as per our report:

innovation ecosystem contributors

Looking at the 2030 Agenda, the goal that comes to mind here is Partnerships for the Goals. You know the saying there is strength in numbers? Well, building strong relationships can accelerate technological innovations that have the potential to reduce the cost of ESG solutions and the timeline for delivering them. In fact, 70% of the 169 sustainability targets of the 2030 Agenda can be directly supported by technology innovation, according to the World Economic Forum’s Unlocking Technology for the Global Goals.

sdg 17

And, considering that an enterprise-wide approach yields a higher level of satisfaction with Horizon 2 and Horizon 3 results, ESG efforts can greatly benefit from innovation activities that engage a broad set of stakeholders — especially as they pertain to the prosperity of everyone involved.

So, what’s the advantage of all this? Let’s just put it this way: 49% of revenues of the 1,200 largest global companies are generated in business activities that support the sustainability goals of the 2030 Agenda, according to The State of Green Business 2021 Positive Impact by S&P Global Market Intelligence.

Use Quantitative Metrics to Uphold ESG Commitments

A quick glance at the Future-Fit Manifesto will shed light on the organizational mindset required to effect meaningful change in the world of sustainable development, but the seventh principle of the manifesto is the one that really stands out:

“Innovative solutions that realize stakeholders’ aspirations are the primary measure of progress.”

That’s a tall order to fill, of course, but one that makes sense in an economy that increasingly rewards organizations engaged in values-based innovation. Interestingly, when it comes to measuring innovation effectiveness, our report shows that the bottom-line isn’t the only thing that matters:

innovation effectiveness metrics

The key takeaway? Organizations with an enterprise-wide approach to innovation use quantitative metrics (such as customer satisfaction, among others) just as much as financial metrics — a practice that could help foster a corporate culture that is more in tune with and supportive of the organization’s ESG commitments.

“I Am Stakeholder”

As far as satisfaction goes, this customer is delighted. Indeed, I ultimately bought a bottle of Rhino Whiskey. I just couldn’t help myself.

rhino whiskey

On that note, here’s a review of the very scotch that inspired this article, because why not.

Nose: Soft and sweet, orange marmalade spread on graham crackers. Hints of charred oak come through, reminiscent of a crackling campfire against the backdrop of a dark desert plain.

Palate: Caramel develops on the palate. Creamy vanilla envelops rich notes of malt, balanced by subtle hints of tropical fruits that linger like an elusive leopard stalking from afar.

Finish: Sweet and long, like a warm African summer night.

Overall: Rhino Whiskey charges at you with flavor, while getting us to think about how we can use innovation to take our ESG efforts up a notch. Or maybe it’s just the alcohol talking.


Lucas Potasso-Justino

Chief Editor for the Future-Fit Manifesto and Content Marketing Specialist at Planbox. I write stuff that inspires front-line innovators on their journey towards an impactful innovation program. Follow me on LinkedIn.