11/09/2023

Sustainability as a success factor: How planet-centred design and innovation leads companies to long-term success

Authors: Emily Eichenlaub & Cathleen Eberhardt

Planet-centred design and innovation are key drivers of sustainable business success, as they not only stand for environmental responsibility but also generate long-term profits. But how can these approaches create a profitable relationship be-tween growth and sustainability? Digital Strategist Emily Eichenlaub and Design Director Cathleen Eberhardt put the issue in perspective.

Strategy and design should be sustainable

The importance of sustainability in the digital service design process is undisputed in the face of climate change and other environmental challenges. Complementing user-centricity with planet-centricity is necessary to incorporate the needs of society and nature into the design process. A stronger orientation towards the planet not only offers companies the opportunity to stand out from the competition but also opens up new opportunities and business fields. So should companies suddenly save the world and realign themselves? Yes, a little bit.
And is it that simple? No, unfortunately not. But regulators are increasingly demanding this and thus creating direct incentives for change. International projects such as the Sustainable Development Goals (SDGs) often serve as precursors for national regulations. More and more companies are concretising their steps towards achieving the SDGs in their reports, such as their sustainability strategy. The situation is similar to the law on the implementation of the EU CSR Directive (Corporate Social Responsibility) or the National Human Rights Action Plan, which aims to make global supply chains more sustainable.

Sustainability in the design process

Large companies, because of their considerable influence, need to make a greater contribution to the implementation of the Sustainable Development Goals. How do governments ensure that they are actually working towards a more sustainable future?

Emily: In fact, it is in the interest of governments to involve large companies in the pursuit of a sustainable future. Due to their considerable influence, they can make a greater contribution to, for example, the implementation of the Sustainable Development Goals (SDGs) than small start-ups, despite having near-optimal sustainable business models. However, many ecological measures in the sustainable economy go hand in hand with economic benefits, as they often aim at efficiency gains, such as the recycling of raw materials.

Does green business equal good business?

Emily: Not exactly, the statement “green business equals good business” has often been used as a basis for arguing that sustainable business practices automatically lead to economic success. However, there are different perspectives on the relationship between sustainability and business success. Some argue that sustainability can lead to long-term cost savings, improved brand image and increased customer demand. Companies that are early adopters of sustainability can also benefit from regulatory advantages and position themselves as pioneers in their industry.
Being green is increasingly relevant for many companies in today’s world, but it is important to carefully consider the circumstances and impact on the particular business model to determine if it is indeed “good business”. In some cases, for example, the market is not willing to pay a premium for sustainable products or services.

Cathleen: Consumer behaviour is certainly promising. Three out of four consumers in a study by the Institute for Business Value say they want to do more to live a sustainable lifestyle, such as reducing water and energy consumption, recycling more, etc. About half of the world’s consumers say they pay on average 59% more for products that are labelled as sustainable or socially responsible. This shows that consumers are willing to support sustainability with their own money.

Many companies already consider sustainability as a top priority but at the same time struggle to successfully implement sustainability goals and strategies. What factors and positions do you think play a critical role in creating a sound business strategy that enables long-term value creation through sustainability?

Emily: That’s right, an IBM study found that more than 80% of CEOs expected sustainability investments to lead to better business results within five years. However, the nature of these results is still in question. More than half of CEOs cited unclear return on investment and economic barriers as the biggest challenges to achieving sustainability goals. Integrating these goals into broader strategic objectives from the outset can in turn help to clarify the business value created by sustainability.

Emily: In my opinion, the success of sustainable business practices depends on various factors such as the industry, market environment, business strategy and implementation. In addition, a shift to sustainable practices may also involve high short-term costs and challenges. Sustainable initiatives can impact a company’s core business and may require extensive changes throughout the value chain.
At IBM iX, we see sustainability as a holistic approach, for example by setting specific and measurable sustainability goals, engaging different stakeholders and sustainably designing digital solutions and processes.

What measures does IBM iX take to ensure that sustainability is considered holistically within the company?

Cathleen: We make sustainability a shared responsibility with clients. Putting the responsibility for sustainability on one person – whether it’s a chief sustainability officer or another executive – will not lead to the comprehensive change that most companies need to make to achieve their goals.

Emily: That being said, I think it starts at the top, with those leaders taking more direct, collective responsibility for the sustainability agenda. There are already signs that companies are adopting this approach. For example, CIOs named sustainability as the area they expect to have the biggest impact on technology in the next three years.

Cathleen: By the way, sustainability is also gaining importance among (potential) employees. Studies show that the majority of applicants prefer sustainable companies as employers. At IBM iX, we are also observing a change in values among young professionals/Gen Z. They want to play a positive role in shaping the future and therefore also want their employer to be innovative and aware of sustainability.

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Which sustainable design opportunities are there at IBM iX?

Cathleen: On the one hand, there is a group in the company that is working on making our everyday life as an agency more sustainable. Employees can get actively involved here. In addition, we offer regular training sessions in which our employees learn to use design thinking methods specifically for the development of sustainable products. These trainings enable us to help our customers to act more sustainably and thus in a way that is fit for the future. The training is not only of interest to designers.
From technical architects to project leads and colleagues from our people team – employees from a wide range of professions take part. This is great because it shows that we also understand sustainability as a collective, multidisciplinary topic for which everyone can take responsibility.

How does IBM iX help companies address sustainable transformation?

Cathleen: The biggest challenge is the lack of insights from data, as well as technological barriers. Digital technologies such as AI, Cloud or Blockchain can help companies access the data and insights they need to run sustainable operations and drive innovation. Advanced data management capabilities supported by open standards and interoperability also play a major role in improving sustainability outcomes. This is where IBM iX comes in as an experienced consulting partner.

Emily: By the way, AI also enables more efficient use of resources and energy. By analysing big data, AI can help identify and optimise inefficient processes. The combination of data analysis, machine learning and IoT technologies makes it possible to develop environmentally friendly strategies for energy efficiency and optimisation of logistics chains. This contributes to the reduction of CO₂ emissions and supports sustainability goals at the same time.

So is digitalisation the panacea for sustainability?

Cathleen: Digital products and technologies themselves are not free of negative impacts on the environment and society. However, since these impacts are often not part of the objective of a digital product, they are not collected and thus remain invisible. And this brings us back to the question of how sustainability is anchored in the company. If companies take sustainable business seriously, then this must also be lived out in the digital world.
Not only the conversion rate must be right, but also the CO₂ emissions from the operation and use of digital products must be reduced to a minimum. After all, the internet causes 1.6 billion tons of greenhouse gases per year. In the future, it cannot be ruled out that – similar to the issue of accessibility – there will be regulatory requirements regarding the sustainability of digital products. Against this background, companies should also deal with this issue.

What contribution can design make?

Cathleen: Designers can work at different stages of the design process to ensure that environmental and social impacts are considered alongside business and user goals. 80% of the environmental impact of a product occurs in the design phase, i.e. at the beginning of a project, when it is decided what kind of product should be created in the first place. Here we work with a Design Thinking framework that is designed to find not only user-centred but also sustainable solutions to problems.
The framework is based on IBM’s Enterprise Design Thinking. It helps teams to look at challenges, user behaviour, ideas and solutions not only through a user lens but also through a sustainability lens, making them visible and discussable. And even at a later stage, when an idea is already being developed, design can contribute to a more sustainable digital product – incidentally without significant additional effort – by following simple design guidelines. Often, other quality features such as accessibility, usability and loading times are also optimised.

IBM Design for sustainability

Future viability only through sustainability

In the interview with Cathleen and Emily, it becomes clear how urgent it is to promote sustainable practices in companies and society to achieve long-term value creation and a positive impact on the environment. This interview is not only meant to be thought-provoking, but also to encourage us to take concrete steps towards sustainability. Each of us can contribute, be it through more conscious consumer behaviour, sustainable business or by contributing ideas and innovations.

About the interviewees

Cathleen Eberhardt is a Design Director with more than 15 years of experience in Experience Design and leads the Design for Sustainability working group at IBM iX.
Emily Eichenlaub is a Digital Strategist and Business Designer with a strong focus on sustainability. She focuses on designing sustainable strategies and integrating them into business processes and projects. Among other things, the two together give the internal “Training for Sustainable Enterprise Design Thinking” and “Lunch & Learn Sessions” on the topic of sustainability.

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