Two-thirds of tech and innovation firms rank climate and sustainability as top corporate priorities, yet only one in five actually have the capabilities in place to put these commitments into action through innovation, fresh global research released today suggests.
The research, based on a poll of 1,500 innovation executives alongside a benchmarking study carried out by Boston Consulting Group (BCG), points to a significant gap between the commitment and readiness to act on climate change and net zero.
While two-thirds of survey respondents said their firms viewed climate and sustainability as top priorities, and more than half said their firms were committed to green innovation, BCG found that only around a fifth are ready to develop the product, service and business model innovations to support these aims.
Some of the top ranking climate and sustainability innovators included in the research included Apple, Amazon and Tesla, all of which scored highly in BCG’s study.
But more broadly, the management consulting giant warned that, with more and more companies announcing net zero pledges, the innovation readiness gap between commitment and capability presented an “existential problem” for laggard companies that risk falling behind as the net zero transition gathers pace.
“While many companies talk about sustainability and make net zero emissions pledges, far too few of them have truly done the work of integrating climate and sustainability priorities into their innovation engines and producing tangible results,” said Justin Manly, global leader of BCG’s growth and innovation segment, who co-authored a report on the research published today. “At the same time, investors, regulators, customers, and shareholders are all looking to big companies and their CEOs to take the lead in making real progress against global warming.”
The research measured committed climate and sustainability innovators in the survey against BCG’s ‘innovation-to-impact’ (i2i) benchmarking framework – a tool created by the consulting firm to help companies determine their innovation strengths and weaknesses. These were cross referenced to assess the readiness of the companies’ innovation practices and platforms, he explained.
Among committed climate and sustainability companies, 28 percent scored 80 or higher on the i2i framework – where the highest score is 100 – and were therefore deemed “ready” and equipped with well-developed and practiced innovation capabilities, BCG said.
But the firm said these findings showed that nearly three-quarters of committed climate and sustainability innovators in the research needed to “raise their innovation game”, with 80 percent of companies all facing “a steep learning curve”.
Among the companies which scored highly enough to qualify as the top climate and sustainability innovators were tech giants Apple, Amazon and Tesla. Apple ranked highest on the list for the second year running, while Microsoft climbed two positions to second place and Amazon moved one up into third. Google owner Alphabet fell three places to fourth, meanwhile, and Tesla remained in fifth position, according to the report.
Four new companies made it to the top 50 including ByteDance, Nvidia, Panasonic and Zalando, the report shows. A number of automotive companies also made the top 50, with GM, Ford, Toyota and Hyundai all joining Tesla as committed climate and sustainability innovators. Automotive also boasted the second highest percentage of companies prioritizing climate and sustainability in the report, thanks to the rapid industry-wide growth of electric vehicles, BCG explained.
Continuing a now five-year-long trend in BCG’s annual research, more than half the companies in the top 50 list are based in North America, although representation increased this year for companies in Asia-Pacific and Greater China.
Elsewhere, the research also found that companies and industries producing the highest greenhouse gas emissions tended to be more likely to prioritize climate and sustainability innovation. High-emitting companies were found to be 20 percent more likely than low emitters to target the kind of deep tech solutions needed to substantially decarbonise, BXG said.
“As sustainability moves up the agenda in boardrooms and C-suites everywhere, the importance of innovation rises commensurately,” said Michael Ringel, BCG’s global leader for innovation analytics and research and co-author of the report. “But innovation – be it in products, processes, or business models – is not a siloed function and does not take place in a walled-off lab. Progress depends on innovation being embedded throughout the organization, with the same human and technological capabilities that drive success on other topics.”
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