Laetitia Gazagnes is an Expert and Coach in Sustainable Business Innovation & Marketing Strategy with a PhD in the Chemistry of Materials. We spoke with Laetitia about her experience at PUZZLE X and the importance of sustainability in the growth of materials companies.
Why is sustainable innovation an important part of any business development strategy?
On the one hand, the "time-to-market" of sustainability is taking place (i.e. when the demand for sustainable solutions becomes dominant in the market) due to increasing pressures in terms of climate disasters and impacts of pollution on living and working conditions. Stakeholders are increasingly demanding active participation in environmental protection and social responsibility and traditional price competition models are therefore becoming insufficient.
On the other hand, in contrast to common sustainability practices (common to companies in the same sector, such as optimizing energy use), strategic sustainability practices implemented by a company (i.e. company-specific sustainable innovations that allow it to stand out in its market), have a positive impact on its return on capital but also on the market valuation multiples. Thus, through the implementation of a sustainable innovation strategy, this company adopts a unique and innovative position, not only leading and influencing its market but also generating better revenues.
Which industries do you think are doing well in terms of sustainable innovation, and why?
Today, in the best industries in terms of sustainable innovation, we can find the ones offering some solutions to directly “clean” the planet like cleaning water for instance, because their main initial goal is to fix some environmental issues, they easily imagine some sustainable solutions to achieve their initial goal. But unfortunately, the model of the green economy is often used to build these sustainable innovations, creating some more expensive solutions most of the time. However, some other business models exist to implement sustainable innovations to create more competitive sustainable solutions in terms of price. These models need to be more well known and used. Because most of the time, the most sustainable solutions are the simplest and cheapest solutions.
Which industries do you think are falling behind in terms of sustainable innovation, and why?
As the solutions in the Health industry are focused on improving health and care, they "benefit" from a kind of joker in terms of sustainability: the industries in this field are therefore for the moment somewhat exempt from sustainable innovation. However, they will be necessarily impacted one day, as the time-to-market of this application area will inevitably arrive.
Other industries also have some issues engaging in sustainable innovation: for example, the consumer electronics industry offers products that are currently unsustainable and consume more and more data. However, the day that a company in this field implements a real internal sustainable innovation strategy and offers more sustainable products, competitors who are not prepared to do so will be hard-pressed to stay in the market.
Also, the fashion industry is one of the most polluting industries and has difficulties in becoming sustainable: the main problem is the monstrous and unjustified quantity of clothes generated and consumed each year. The industry is struggling to find new and innovative business models that could generate a responsible and sustainable industry. By taking up this challenge, they may also be able to change consumers' buying habits.
What can materials companies do to remain competitive in terms of sustainable growth?
One of the important points for this type of company in terms of sustainability is to keep in mind that all raw materials are in limited quantities on this planet. These companies, therefore, have the challenge of setting up a business model that will respect the natural capital by considering in their business plan the calculation of the volumes of materials produced and the rate of regeneration of the raw materials used.
Another important point, but not the only one, is that when proposing a new material on the market, it is essential to have previously studied the risks of toxicity to humans and the impacts on the environment in the use cases and beyond. Of course, companies will pass the standard tests, but it is also necessary to consider the long-term global consequences of the presence of this material in the environment if it is released into nature: how it degrades and how fauna and flora interact with the fragments/waste of this material for example. This should be considered in the building specifications for these companies.
What do you see as the biggest challenge facing sustainable corporate development?
There are two major points:
The first one is that most leaders and CEOs are convinced that sustainability erodes profitability. This belief comes from the 'green economy', which is a model where sustainable solutions are in general more expensive than non-sustainable solutions: 'I have to pay more if I don't want to pollute'. However, there are many other models that allow for cheaper sustainable solutions: implementing a sustainable innovation strategy that impacts the company at all levels will be one of the major keys to offering cheaper sustainable solutions and generating additional cash flow and therefore higher turnover. As long as the leaders of a company are not convinced of the value of implementing such a strategy, it will be difficult to implement impactful sustainable development for a company.
On the other hand, CFOs have been taught to think with a single cash flow and therefore have difficulties in conceiving and adapting to a business model with several cash flows. Yet this is one of the key elements in achieving zero waste for a company while generating additional cash flows and therefore a higher turnover.
Could you tell us about the co-creation session you led at PUZZLE X?
The topic of the session was “a sustainable attitude in R&D”. The goal of the workshop was to give some key elements to the participants to change their mindset when they imagine a new product and build the technical specifications during the development stage. The participants were split into 3 groups and each group imagined a frontier material-based product and co-created the value chain in thinking how their business model could be sustainable. The 3 groups were amazing, and they proposed very nice solutions! This session showed them how it is possible to create sustainable solutions, it is merely a change in mindset.
What were the key findings from your co-creation session at PUZZLE X?
When R&D/designers/innovation people take time to think about how they could imagine a product and its production chain to be as sustainable as possible, a lot of solutions emerge thanks to their creativity and imagination. This type of event shows that everybody has the capability to switch their mindset into a sustainable direction so that we can collectively do better: the solutions are already in our minds!
How do you think PUZZLE X can be leveraged to encourage sustainable practices in companies?
PUZZLE X can be a booster for companies that would like to initiate sustainable innovation or go to the next level of sustainability. PUZZLE X is a motivating place showing us that a variety of solutions is possible, and a lot of ideas are continuously emerging. PUZZLE X allows us to meet a lot of people so that we can find partners, advisors and experts we need for our project. It’s one of the most innovative places having the capability to build the future in a more sustainable way!