Sustainability is increasingly recognised as a fundamental and critical business practice. More and more businesses are setting targets and taking action to maximise sustainability. For example, over a third (34%) of the world’s largest companies have set public net zero targets, Accenture research shows. Meanwhile, over 4,000 companies have joined the Science Based Targets initiative supporting corporate climate action. What many businesses are discovering on their sustainability journey, is that real growth and progress requires partnerships and collaboration.
Many businesses are now striving to improve sustainability. However, there are many challenges these businesses can encounter, such as:
- Lacking required competencies and knowledge in-house.
- Significant financial investment and higher risk taking when solutions are not readily available and require innovation and additional cost.
- No industry standards and common playing field to help align expectations and requirements with end-customers.
In other words, no one business can solve every single challenge that emerges. Sustainability partnerships and collaboration enable businesses to work with supply chain partners and suppliers to pinpoint issues, develop solutions and drive shared agendas. These collectives can start with one partner and extend to include more businesses, startups, research organisations as well as non-government organisations (NGOs). They can happen at different levels, starting with a common vision and going all the way to shared roadmaps and industry standards. They can also stretch across industries and beyond. Examples of initiatives working to achieve change through sustainability partnerships and collaboration include the First Movers Coalition to decarbonise the heavy industry and long-distance transport sectors, the World Economic Forum’s Alliance for Clean Air bringing business leaders together to measure and reduce air pollution, and the Getting to Zero Coalition between the Global Maritime Forum and the World Economic Forum. There are also partnerships focussed on business commitments such as the United carrier’s sustainable aviation fuel (SAF) program.
Why are partnerships important for sustainability?
For many businesses around the world, sustainability has become a corporate imperative. An EY survey found 90% of global institutional investors consider environment, social and governance (EGS) criteria when investing, while IPSOS found 75% of global customers said they feel better about businesses that make changes to improve sustainability. However, achieving real progress with sustainability requires navigating issues that are often complex and multifaceted. The benefits of working with other businesses, sectors, and organisations are wide-ranging and include:
- Combined strengths – partnerships can allow businesses to bring together diverse expertise, resources, and perspectives. The Getting to Zero Coalition, for example, unites more than 200 organisations, including 160 businesses, and is supported by key governments and Intergovernmental organisations (IGOs). It plans to use the collective strengths of the group to reduce greenhouse gas emissions from shipping. Currently, shipping transports close to 80% of global trade and accounts for 2-3% of global emissions. Through close collaboration and collective active, the coalition wants to reduce these emissions by at least 50 per cent by 2050. To do this, the coalition is bringing together the knowledge and resources from the maritime industry, energy sector, financial sector, and governments and IGOs. Working together, they are better equipped to support each other to think outside the box and identify opportunities to improve sustainability.
- Risk sharing – improving sustainability requires businesses to reframe their strategic perspective. It may also require changing ways of working and a financial investment, plus time and resources, all of which carries risk for businesses. Entering a partnership or collaboration allows a business to risk-share. For example, Road Freight Zero was born out of the realisation that urgent action is required to meet targets to decarbonise the sector. It brings together industry leaders with the goal of developing solutions together and ‘de-risking the decarbonisation pathway.’ The stakeholders agree on a shared goal, but also to shouldering the risks that emerge together. The First Movers Coalition is also helping business share the risk of developing and adopting new technologies and mobilising collective demand.
- Drive innovation and growth – partnerships are key to creating value and unearthing new opportunities for sustainable innovation and growth. Businesses can collaborate with their partners to develop new technologies, products, and business models that are more sustainable and, therefore, more resilient. They can also overcome roadblocks around governance and regulation. To this end, several partnerships are in place between different businesses to help advance the production of methanol fuel with the potential to produce lower greenhouse gas emissions from shipping. There is also the MODI Project, a cross-border initiative to accelerate the development of connected, cooperative and automated mobility (CCAM) solutions to improve European logistics and supply chains. Meanwhile, the Swedish freight company Einride is partnering with businesses and startups to advance its mission of electrifying freight transport. By coming together, businesses can accelerate progress.
- Facilitate knowledge sharing and learning – partnerships allow businesses to share best practices, lessons learned, and insights. This information can be used to develop effective solutions that are tailored to local contexts and needs. Without this, each individual business would have to develop solutions from scratch. A good example of this is LG Energy Solutions, a company which specialises in manufacturing and supplying electric vehicle (EV) and energy storage system (ESS) batteries. The business has set a goal of achieving net zero by 2050 and is using renewable energy to advance towards its goal. It joined the RE100 global corporate renewable energy initiative to share its experience of using renewable energy.
How do you create a successful sustainable partnership?
To achieve change through sustainability partnerships, there are certain questions businesses should ask to maximise the success and impact of their collaboration. These may differ from business to business, but could include:
- Do you share the same vision as the other members of the collaboration or partnership?
- What role do you want to play? Which commitments are you ready to make and how does it fit to your strategy (e.g., being a first mover or a follower)?
- What value do you want to create from this sustainability collaboration or partnership?
- Will you have a clear governance framework, which includes an escalation mechanism?
The number of sustainability partnerships and collaborations is growing as businesses realise their potential to solve problems and achieve progress in ways that would be much harder, or near impossible, alone. While many partnerships are still in the early stages and yet to reach their full potential, they bring together diverse perspectives, resources, and expertise to address complex sustainability challenges and forge new paths. Sustainability is no longer an option. The nature of sustainability partnerships and collaborations may vary, but when businesses sign up, they are bolstering their ability to enact meaningful change.
