UK business could secure £100bn in annual productivity gains generated by innovations designed to address environmental and social challenges, according to a new report by Accenture, the charity Business in the Community and Marks & Spencer.
The report, “Fortune Favours the Brave”, argues that companies must go beyond conventional corporate and social responsibility programmes and, instead, place sustainability at the heart of business strategies and operations to unlock the full commercial potential and sustainability benefits.
Based on primary and secondary research by Accenture and in-depth discussions with CEOs of some of the UK’s leading companies such as Kingfisher, BT Group and Jaguar Land Rover, the report suggests that scaling innovation in five categories – resource efficiency, the circular economy, new consumption models, shared value approaches and transparency and customer engagement – can improve competitiveness, grow revenues and better address changing customer needs.
Olly Benzecry, Managing Director UK and Ireland, Accenture said, “At a time of economic challenges and changing consumer expectations, there is an opportunity to make sustainable business practices a driver of growth and competitiveness. That requires companies to innovate and to embrace the disruption that new sustainable business models can create.”
Stephen Howard, Chief Executive, Business in the Community, said, “In today’s rapidly changing and increasingly resource constrained world – which will need to provide for 9 billion people by 2050 – it has never been more important for companies of all sizes to understand how and why sustainability is central to their long-term success and prosperity.”
Marc Bolland, Chief Executive, Marks & Spencer, said, “As customer values and expectations evolve, sustainable products need to be made more desirable to engage with customers and to develop a self-sustaining, circular economy. Everybody wants a racing car, but even a racing car can be fuel efficient. We need to make sustainability desirable, appealing and relevant, and by responding to customer wants, UK business will have more impact.”
The report provides details of the commercial potential and sustainability benefits of a range of innovation opportunities:
Resource Efficiency: Companies can generate annual savings of £61bn by scaling resource efficiency and energy efficiency initiatives and through the use of cleaner technologies, according to Accenture analysis based on data published by the Department for Business Innovation and Skills (BIS). For example, Marks & Spencer reduced its clothing delivery vehicle fleet by 25 per cent and improved fuel efficiency by 30 percent.
Circular Economy: The UK consumer goods industry could save £15bn to £18bn annually by closing the loop on supply chains, extending asset life, promoting re-use and designing products for disassembly, according to analysis for the report by the Ellen MacArthur Foundation. Accenture estimates that circular economy approaches can achieve a 50 to 90 percent reduction in a product’s environmental footprint.
New Consumption Models: Social media and other technologies are creating new ways of using goods and services and altering business models, including by extending the pay-as-you-live and sharing economy and enabling consumers to live more asset-light lives. Currently worth approximately one per cent of private sector turnover in the UK, this market involves consumers collaborating with each other to re-use, share, swap or barter goods and services. Brands can also offer products-as-a-service, whereby goods can be rented rather than sold outright.
Shared Value Business Models: Accenture estimates that businesses could generate cost savings of between £3bn and £29bn through ‘shared value’ models, whereby they support the communities in which they do business to help create a more active and engaged workforce and reduce recruitment and retention costs. Shared value models can also directly contribute to building customer trust and loyalty.
Transparency and Customer Engagement: Technologies that improve traceability and customer engagement regarding product origins can boost trust and loyalty, according to Accenture, which estimates that the UK manufacturing sector could also generate cost savings of £3 billion per year.
Business in the Community is calling on more businesses to embrace the opportunity of sustainability. To accompany the report, it will publish a new Sustainable Business Toolkit that provides practical guidance on how companies can create and test new innovative ideas that deliver commercial, environmental and social benefit. This can be found at sustainablebusiness.bitc.org.uk.
About the Report
‘Fortune Favours the Brave’ was based on primary and secondary research by Accenture and included data produced for the report by the Ellen MacArthur Foundation on the circular economy. Secondary analysis was based on research reports published by a range of organizations, including the Department of Business, Innovation and Skills, the Department for Environment, Food and Rural Affairs (DEFRA) and the World Economic Forum (WEF). Accenture also consulted with a range of CEOs from the UK’s leading companies.
Check the following link to read/download the Full Report:
www.accenture.com/gb-en/Pages/insight-fortune-favours-brave.aspx
Source: M&S.
