In the 2021 BEIS UK Innovation survey, nearly a quarter of businesses cited reducing environmental impact as a highly important factor in deciding to innovate. This is an increase of over 10% since 2015, demonstrating the increasing importance of green innovation for many businesses.
Below we explore what businesses told us on:
- How it started. Looking at business' drivers or triggers for innovating, to help you get thinking about your business’ green innovation journey
- How it’s going. Exploring the benefits businesses have experienced from innovating to decarbonise. Spoiler alert: green innovation results in ‘spillover benefits’ beyond what you might expect. This can help make the business case for further investment.
How it started....
Essential to meet environmental and net zero commitments
The UK was one of the first nations to set a legally binding target to achieve net zero emissions by 2050. The business community has rallied around this. Many businesses have set their own internal aims and targets, some more ambitious still, or signed up to the UN ‘Race to Zero’ campaign. Find out here how your business can get started on your decarbonisation journey by setting emissions objectives.
Achieving these ambitions will often require a complete shift in business model. As stated by Compass group, if the world’s food system, for example, isn’t transformed in the next 80 years, its’ emissions will be 3.5x greater than the global carbon budget for a 1.5-degree world, so they will need to completely transform the way they operate.
Top-down direction from CxO
Often the trigger for real investment in green innovation comes from the very top. CGI have appointed a Chief Sustainability Officer to drive forward activity on innovation and sustainability. And BT and Costain told us that CxO level commitment makes investment decisions easier, increases the business’s acceptance of risk, and has ensured innovation remains a top business priority.
Delivering green products and services is increasingly expected by customers, shareholders, and supply chains, driving businesses to innovate to meet this demand. In an IHG survey over 80% of respondents said it was important to them to choose a hotel brand that operates responsibly. And for Antalis their commitment to producing clean packaging solutions is vital to their customer base, which includes businesses with a strong environmental ethos.
Given the current geopolitical landscape, rising energy costs, and predicted rising carbon price in the next decade, there is an economic imperative for businesses to innovate to Be More Green. Carbon intensive organisations like Anglo American and TATA Steel recognise that their current business model will not be environmentally or economically viable in a net zero world, so they must innovate. And for businesses in sectors with small margins, like Compass Group, innovation will be particularly important if they are to decarbonise to without sacrificing their commercial model.
How it’s going....
Emissions and environmental impact
We have heard great stories of how innovation is already reducing environmental impact:
- Sainsbury’s integrated heating and cooling technology has reduced energy consumption in refrigeration by 30% and reduced need for gas heating boiler systems.
- Antalis has reduced carbon emissions across scope 1 and 2 by 75% since 2012 through delivering innovative low carbon products and making changes to the way they operate.
- Anglo American has started a private venture which will deliver 100% renewable power across their South African operations and have created a hydrogen-powered mining truck which will cut their use of diesel globally
- BT’s Green Tech Innovation Platform (GTIP) is on its way to delivering better air quality monitoring, smarter energy efficient buildings and remote diagnostics to reduce travel by public sector workers, delivering environmental benefits for their public sector clients
- Compass group have created a menu that reduced CO2 emissions per portion by 66%
- Costain will deliver low carbon solutions to every client on every project by 2023, for example using net zero building sites for their projects and lowering embodied carbon in concrete usage
- If successful, TATA Steel’s new solvent-free steel coat paint, will reduce its Shotton site’s carbon emissions by 70%
- Whitbread have rolled out new technologies such as Synergy chargrills that use 59% less gas, and EndoTherm heating system that saves 14% energy usage for heating hotel rooms.
- CGI are considering how to reduce emissions across five areas of their business: in energy consumption data, software development, transport, food waste, monitoring the environment.
Operating costs reduced
Switching to low carbon technologies and processes can reduce energy bills, helping tackle the cost of doing business. OnGen told us that cost savings of up to 60% can be achieved through adoption of the correct mix of onsite renewable generation. Similarly, many of the innovative technologies in our case studies drastically reduce energy usage, in turn lowering energy bills. For example, Whitbread’s new synergy grills use 59% less gas. The cheapest energy is the energy you don’t use.
Attracting and retaining talent is high on every business' priority list. Especially now. Innovating to be more green can help attract talent in an increasingly climate conscious society. Anglo American received feedback in interviews that their green innovation is a significant draw for prospective employees. Similarly, TLT’s innovative projects have generated career opportunities internally, helping them retain top talent.
Wider business awareness of sustainability and climate issues
Coupled with attracting talent, green innovation projects can generate excitement and awareness around climate issues within the business. BT’s staff Enterprise Sustainability Forum developed from GTIP, exploring how sustainability can be commercially relevant to the business. Compass Group catered COP26, creating an innovative low carbon menu. This has driven awareness of environmental and sustainability issues within the business, which they hope will inspire similar behaviour in their employees at home.
Brand sustainability credentials
With increasing public climate consciousness, innovating to be more green is building businesses’ sustainability credentials. Both customers and shareholders increasingly expect businesses to be acting in an environmentally conscious way. Sainsbury’s told us their green credentials increase their reputation with customers. Antalis has launched a green star system for their products, which rates them for renewable, recycled, and recyclable materials. Customers can make an informed choice, and in turn Antalis can monitor the increasing demand for the green options they offer.