A FRAMEWORK FOR SUSTAINABLE INNOVATION
Innovators and investors in the US have a new template to guide them on creating sustainable innovation projects that exemplify ethical business practices. That framework is based on the EU’s new Sustainability Reporting Directive (Directive 2014/95/EU, an amendment to Directive 2013/34/EU), which will come into force in 2018. For the largest EU firms, financial reporting alone will no longer be enough. The new guidelines spell out minimum requirements for a report on material aspects of non-financial performance, related to environmental, social and governance (ESG) issues.
In these reports, firms will be expected to cover their policies, outcomes, and risks related to:
- Environmental matters
- Social and employee aspects
- Respect for human rights
- Anticorruption and bribery issues
- Diversity in their board of directors
Keep in mind that these categories represent only the bare minimum and some member states have more stringent guidelines. In addition to being responsible for their own actions, firms must perform due diligence to assure compliance by subcontractors and other partners within their supply chains. The goal is to prevent potential adverse impacts wherever possible and mitigate those that occur as soon as possible.
Although US firms don’t face a similar reporting requirements yet, this directive can serve as the basis of a competitive advantage for innovative companies in the US with mission statements centered around ethical goals.
Innovation and innovative thinking have become even more critical to the success of the modern organization as consumers and investors look more deeply into behavior of the brands that they support. Ethical, sustainable business practices are recognized with greater customer loyalty and long-term investment.
To solve the world’s greatest problems today, and navigate the uncertain future, companies are finding that innovative processes must work hand-in-hand with sustainability initiatives.
Innovation360 consultants and licensed practitioners can help firms with the strategic leadership and the change management required to bring about a culture of innovation in your organization. The true value of this work derives from the new business lines and disruptive models that result from hypothesis-based innovation practices. Our consultants can show you how to use the ESG reporting framework to generate sustainable innovation, streamline your internal operations and discover areas for business growth.
The reports can identify and address service gaps that lead to new value propositions, highlight underserved markets and assemble smarter supply chains, enhanced by the latest technology.
Our analysis of thousands of innovations, both successes and failures, indicates that companies thrive when they bring into alignment their capabilities, their culture and their strategic leadership. Otherwise, innovative concepts don’t have the resources they need to make it to prototype stage or the wisdom to adapt quickly enough to evolving market conditions. Innovation projects that do make to completion under these conditions never reach their full productive potential because their success is not repeatable and sustainable.
Take advantage of these new reporting directives to discover what your company does best, which capabilities you need to bring on board for the future, and precisely how innovative thinking can spur growth for your business amid the volatility of an evolving global economy.