Innovation

31/05/2015
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Innovation is one of the key paths through which companies can drive toward a low-carbon economy. Targets to reduce greenhouse gas (GHG) emissions are the first steps in that direction and, to be met, they require investment on innovation.

Innovation is not just something new. In order for a process or product to be considered innovative, it should go beyond Research & Development, it should be implemented and show results.

Innovation = Idea + Implementation + Results

Now, sustainable innovation is different from traditional innovation, because, besides the introduction of new or significantly enhanced products and processes in the organization, it brings economic, social and environmental benefits, when compared to applicable alternatives.

Another distinction between traditional innovation approaches and sustainable innovation is that the former considers their impacts on a reduced group of stakeholders, such as suppliers, customers, investors and regulating bodies, while sustainable innovation considers a large list of secondary stakeholders, such as local communities and activist groups, etc. It is much harder to achieve, since it involves continuous innovation, because this is what characterizes an innovative organization.

Innovation as a strategy to mitigate climate change emerges from multiple combinations of those two factors:

a)  Strategic intention, which discusses the main goal to be achieved by mitigation actions conducted by the companies. In this context, the company strategy can be: (I) innovate, directly becoming the creator of new perspectives in climate change; or (II) explore existing compensation mechanisms, particularly the ones produced by the Kyoto Protocol, so the company can decide whether to 'buy' or 'sell' in GHG international market.

b)  Organization architecture, which indicates the level of cooperation and mobilization of agents within the organizations, in the chain the companies operate and beyond that chain. Thus, organizations can: (I) act individually; (II) explore a strategy for their industrial segment and the chain in which they operate; or (III) establish partnerships beyond their chain or industry, such as, for instance, involving non-governmental public organizations.

When the company's C-level team understands the direction they will be taking regarding climate change and related risks and opportunities, the company will have its positioning and strategies determined.  The higher the number of C-level executives who perceive climate change mitigation as an opportunity for the organization, the more the company will focus on innovation goals.