The world’s 50 most innovative companies are also leaders in sustainability

The productivity of the most innovative companies improves by up to 50%. They are committed to achieving net-zero emissions targets, but only one in five is ready to innovate the necessary solutions.

Two-thirds of companies that participated in the latest study on global innovation by the consulting firm Boston Consulting Group (BCG) say climate and sustainability (C&S) are among their top corporate priorities.

In this sense, more than half consider themselves innovative organizations and place both innovation and climate and sustainability among their top three priorities. However, only one in five companies is prepared to act in these areas, which requires incorporating these objectives as a priority in their innovation engines, having the right capabilities and being prepared to develop innovations in products, processes and business models.

In its 16th report on the most innovative companies, entitled “Are they ready for green growth?”, BCG asked for the first time about the importance of innovation for climate and sustainability. This study shows that, although there are large companies that almost daily announce their commitments to reduce their_CO2 emissions to zero, the gap between them and their real capacity to achieve this is becoming a problem.

“As sustainability moves up the board agenda, the importance of innovation increases proportionately. But that innovation, whether in products, processes or business models, is not an isolated function, but progress depends on the same human and technological capabilities that drive success in all spaces,” explained Carlos Paci, Managing Director & Partner of Boston Consulting Group.

He added: “And this includes collaboration, digitization, data utilization, creation of artificial intelligence, development of necessary human skills, and implementation of cross-functional teams and agile ways of working.”

The report measures innovators engaged in climate and sustainability with BCG’s Innovation Assessment Tool (i2i) targeting their innovation practices and platforms. Among these, 28% score 80 or higher (i2i’s perfect score is 100), which qualifies them as “ready” and provided with well-developed and worked innovation capabilities. This indicates that almost three-quarters of companies engaged in climate and sustainability still need improvement and that 80% of all companies face a steep learning curve.

On the other hand, many of the 50 most innovative companies on the 2022 list are also leaders in Climate and Sustainability innovation. In fact, a good number of them are among the first to adopt environmental, social and governance (ESG) principles, and establish decarbonisation commitments. Almost 80% (39 of them) are rated as the top innovators in climate and sustainability, according to global votes from their peers.

For the second year in a row, Apple tops the list. Microsoft climbs two positions to second place, Amazon advances one place to third, Alphabet falls three places to fourth and Tesla maintains its fifth position. Four new companies: ByteDance (No. 45), Nvidia (No. 15), Panasonic (No. 46) and Zalando (No. 25) join the top 50.

Also on this year’s list is a rebound in the automotive sector, as GM (No. 42) and Ford (No. 43) are back in the top 50; Tesla (No. 5) and Toyota (No. 21) maintain their positions; and Mitsubishi is ranked No. 49. In addition, this is number two in terms of the percentage of companies prioritizing CyS (a reflection of the industry’s commitment to electric and autonomous vehicles).

As in the last five years of the ranking, more than half of the companies on this year’s list are based in North America. But Asia-Pacific and China remain areas of growing innovation and companies from those regions increase their representation, from four and three in 2018 to eight and seven companies in 2022, respectively.

Biggest carbon emitters prioritize improvements in climate and sustainability

The report reveals that the sectors responsible for the highest emissions – durable goods (85%), automotive (78%), utilities (77%) and oil and gas (77%) – are precisely those that prioritize climate and sustainability the most. In addition, companies that already emit a lot of gases are 20% more likely than those that emit little to focus on the kind of technological solutions needed for substantial decarbonization.

Companies that made climate and sustainability one of their strategic priorities place stronger emphasis on a number of aspects of their innovation models than other types of innovators: they are more ambitious, identify areas to focus on, better manage their priorities and have clear performance targets; They also engage more actively with their partners and even their competitors.

Innovative companies also observed a positive impact on the productivity of their innovation and R+D activities. For example, 80% of the companies surveyed work remotely two or more days a week and 49% of climate and sustainability innovators say that the productivity of their innovation and R+D activities improved between 10% and 50% thanks to these new ways of working.

“There are no simple paths to decarbonization, most companies in many industries face complex and unclear processes, even for companies with strong commitments in climate and sustainability, which is why CEOs must plan and invest in technologies and solutions that drive addressing the problem at scale,” paci finished.

Source: Scope