While being able to set, measure and monitor sustainability standards across your value chain is vital, it’s only part of the story. Many challenges can only be resolved through working together and sharing responsibility with a wider business ecosystem.
What do we mean by a business ecosystem? Essentially, a grouping of organizations that come together to create higher value collectively than they could individually.
When focused on sustainability initiatives, the positive effect of such alliances can be several magnitudes greater than if the companies acted alone. What’s more, their collective nature builds bigger scale and therefore higher financial viability.
Harnessing the power of combined expertise …
Clearly, there are challenges to building ecosystems. Almost half (46%) of consumer-facing companies don’t prioritize the role of ecosystems in innovation. And when they’re asked why collaboration with other organizations fails, 39% point to a focus on low-value or non-core initiatives and 38% a lack of strategic alignment.
But overcoming these hurdles pays dividends. While a common problem might appear insurmountable for one company, the ability to solve it could exist within a broader ecosystem. If one company commits to meeting a sustainability target, progress may be difficult and the overall impact negligible. But if a consortium of companies aligns on the same standard and works together to resolve it, then the path is easier to navigate, and the final impact is exponentially better.
So, when looking to identify the root cause of an issue, think about which players are impacting all the levers involved and engage with them. And don’t limit yourself to your value chain: be ready to bring in competitors, governments and other third parties too.
What’s more, when reaching out, look to collaborate with other consumer-facing companies; you’ll often get a warm reception. EY Reimagining Industry Futures research shows that 44% look to ecosystems to access new skills, knowledge and competencies, and 42% to accelerate innovation.
… by making collaboration work
However, delivering against common goals requires more than being in the same room. It also demands a common commitment to making collaboration work. This means sharing tough problems, choosing like-minded collaborators, and building trust between all the parties.
All of this is already happening. Over the past few years, there’s been a tidal wave of alliances, each rapidly accelerating its membership. By the end of 2020 the number of international environmental organizations worldwide was approaching 200, with most counting many global consumer products and retail giants among their members.
What’s clear is that companies are increasingly accepting they can’t solve systemic sustainability challenges on their own. They’re realizing that the goals they’ve set for 2025 or 2030 will require a degree of scale only achievable by pooling resources.