ESG Sustainability Strategy: Your Guide to Mindful Innovation Management
The effects of your innovation practices may be most tangible within your industry, but their impact is global. Remember the Peter Parker principle? With great power comes great responsibility. In the case of innovation management, sustainability is your greatest responsibility. An environmental, social, governance (ESG) sustainability strategy not only preserves resources for your company but our planet as well. After all, what good is changing the world if the world is on fire?
How is ESG Related to Sustainability?
ESG stands for Environmental, Social, Governance. In short, the ESG is a means of measuring an organization's commitment to protecting the earth, its resources, and the communities that depend on them. Investors commonly use this set of standards to screen potential investments and partnerships, and these days investors are more and more interested in viable, sustainable investments. The principles of ESG can be highly valuable for strategizing your approach to innovation management. The chart below provides a brief description and example of each component of the ESG.
The commitment to conserving resources for both the company and the environment.
Example - Do you take the necessary steps to reduce harmful and costly energy waste?
The quality of the relationship between the company and its employees, shareholders, clients, and community.
Example - Does your company concern itself with employee morale and community involvement?
The transparency of internal control methods, auditing methods, and the diversity of your board members would fall into this category.
Example - Are wage disparities or conflicts of interest present in your business?
Sustainable Innovation vs. Sustainability in Innovation
If you had to do a double-take on that heading, you're not alone. Despite being variations of the same word, "sustainability" and "sustainable" can mean two different things in the realm of innovation management:
- Sustainability acknowledges our responsibility to weave social and environmental consciousness into our businesses.
- Sustainable innovation refers to innovation practices that focus on creating and maintaining value for the long term.
Thankfully, you can address both of these concepts at once by implementing an ESG sustainability strategy. It identifies areas of improvement within your business model, including those that make innovation processes more sustainable. In other words, you can feed two birds with one scone! Killing birds with stones doesn't exactly align with ESG standards, so feel free to use that gentler remix of an old proverb.
Why Do Innovation Leaders Need an ESG Sustainability Strategy?
Innovation practices require a significant amount of resources—all of which are finite. Innovation leaders are tasked with the management of these resources. Thus, they’re the first line of defense against avoidable asset loss and unnecessary harm. Accordingly, the endurance of innovation hinges on the attention we pay to sustainability. Whether your motivation lies with morality or the preservation of company resources, the benefits of an ESG sustainability strategy remain the same.
Creation of Value
People choose organizations that align with their values. This sentiment applies to B2B, B2C, and investment opportunities. Embracing strategies that are good for the planet (and those who live on it) is essential to building a trustworthy brand image and growing a consumer base with strong environmental and social values. Additionally, conscious labor practices ensure protection against restrictions and fines imposed by regulatory authorities.
Retention of Value
When your company aligns with ESG standards, a variety of losses can be avoided—for example, employee turnover costs and the waste of resources due to inefficient business processes.
Many people have the misconception that sustainability practices can complicate workflow. In contrast, an ESG sustainability strategy streamlines business processes by shifting focus towards feedback and reflection.
3 Tips for Implementing an ESG Sustainability Strategy
Innovation leaders typically have three primary responsibilities. To successfully implement an ESG sustainability strategy, you must weave each of ESG's standards into the responsibilities below.
- Cultivate innovation culture - In a company, change happens from within. Therefore, your employees will determine the success of any approach your company takes towards environmentalism, social awareness, or proper governance.
An innovation management solution that addresses employee engagement is key.
- Create processes that move ideas through the innovation pipeline - Flaws in business processes contribute enormously to unnecessary asset waste. Suppose an employee proposes a solution that never makes it to the right person's desk. Not only will the employee fail to receive validation of their idea, but the time and resources it took to create the pitch will have been in vain.
A clear and accessible innovation process rewards employee motivation and seals the cracks that allow resources to slip away.
- Support innovation with the necessary tools and software - Sometimes, the problem lies in the lack of supportive technology and support rather than the process itself. A successful innovation pipeline requires reliable analytics. Innovation leaders must be able to view data and translate that insight into something actionable.
A platform that maintains and presents information in an easily-digestible format is essential to collecting feedback, measuring success, and identifying areas for improvement.
Share the Results of Your Efforts With ESG Sustainability Reporting
Studies show that investors and consumers value ESG standards more highly than ever before. As a result, companies that adhere to ESG standards typically want to disclose the data that supports that narrative. ESG reporting not only showcases your company's efforts to lessen its negative impact on the world, but it encourages others to do the same.
Reporting methods differ from company to company. The best way to approach ESG sustainability reporting is to examine the reporting methods of peer businesses. It is best to review reporting methods as early as possible. Researching the ESG criteria of similar enterprises will pinpoint the metrics you'll need to monitor within your own company.
rready’s Solution for ESG-Conscious Innovation Management
The goal of an innovation initiative is to tap into a company’s distribution of knowledge. Placing such an immense responsibility on one person’s shoulders would be contradictory. Instead, rready facilitates company-wide participation in the entire innovation process. With this sentiment in mind, we developed an innovation management solution that simplifies ESG awareness—The rready KICKBOX.
Empower the People
The KICKBOX harnesses the power of gamification to engage employees and enrich company culture. Gamification incentivizes employees to participate in company goals by appealing to their playful (or competitive) side. It rewards creativity with tangible milestones, making innovation accessible and, well, fun. By nature, this approach strengthens your company's relationship with its employees. And, with more complex concepts like ESG, standards become more tangible with a gamified innovation process.
Enhance the Process
Engaging employees is step one. Step two is guiding them through the innovation process. KICKBOX coaches employees through company initiatives by putting a roadmap in their hands. No, literally, the KICKBOX comes complete with a roadmap from idea validation to prototype development.
In part, this element of the KICKBOX is what sets rready apart from innovation solutions that rely heavily on consulting. We believe that consulting alone isn’t enough to conquer innovation management. To maximize results, methodology must be coupled with material direction.
Provide the Technology
Innovation technology should do two things:
- Support business processes
- Enhance transparency
Many times, innovation is a series of trial and errors. rready’s platform serves as an interactive data hub that organizes the nonlinear processes that ideas tend to have and allows others to track their progress. This transparency encourages participation and makes it easier to strategize and collect feedback.
Achieving Sustainable Innovation for All
rready specializes in helping companies realize their innovation goals. Don’t take our word for it, check out one of our Case studies to see us in action.