Can Green Process Innovation be the Future of Sustainable Business?

As global environmental challenges begin to rise, ‘going green’ is no longer a choice but a necessity. The government has adopted a stick-and-carrot approach to stimulate and accelerate the circular economy by incentivising organisations driving the green transition. Green process innovation (GPI) emerges as a powerful strategy for companies to align their practices with sustainability goals while leveraging consumer insights and fostering innovation.  

The Case for Taking Up GPI 

At its core, GPI tackles a company's production processes. It is a game-changer that introduces new or improved processes, even if they lie outside a company's traditional expertise. The power of GPI lies in its ability to significantly reduce environmental risks like pollution and resource waste. This focus on process optimisation leads to a double win: greater efficiency in resource utilisation and substantial cost savings.

For instance, one of India's largest IT companies achieved carbon neutrality in just 12 years and 30 years ahead of the timelines set by the Paris Agreement by focusing on their decarbonisation efforts. Their efforts resulted in an over 55 per cent reduction in per capita electricity consumption. The auto industry is also revving up its green efforts. A leading manufacturer is implementing GPI through its manufacturing plants, aligning product plans with net zero goals. Their approach includes using renewable energy sources and water recycling systems to achieve environmental and economic goals. This strategy also saw a positive impact on both brand value and profitability.

Today, organisations in each industry are facing lot of scrutiny from consumers, regulators and stakeholders to minimise their environmental footprint. From carbon emissions to waste generation to consumption of resources, businesses are being held accountable for their sustainable practices. It not only means a stricter regulatory regime but also allows companies to embrace GPI ahead of the curve, avoiding potential penalty and reputation damage.

Also Read: Ratan Tata's Emphasis on Green Business Practices: A Defining Aspect of His Legacy

Emerging Trends in GPI

AI, IoT [Internet of Things] and blockchain are some technologies used to monitor, manage and optimise processes for sustainability. Providing real-time data analytics, predictive modelling and automation allow businesses to make informed decisions towards becoming more sustainable while maintaining business value.

Consumers are now using their purchasing power to support sustainability leaders. Demand for green products and services continues to rise, compelling businesses to innovate and switch over to sustainable processes in order to offer what the market now seeks, while gaining business advantage at the same time.

Legal frameworks and regulatory pressures also significantly influence business practices. As environmental guidelines become enhanced, countries around the globe are enforcing more stringent environmental laws, forcing companies to comply with higher environmental regulations. These companies are reducing emissions and streamlining production, fighting for that uptick in their shareholder reactions.

The circular economy model primarily focuses on resource efficiency and waste reduction for the entire product lifecycle. GPI supports this shift through sustainable design adoption, minimisation of waste generated at every stage and efficient recycling. This approach improves not only one's environmental credentials but also boosts economic resilience and sustainability.

Collaborate for Sustainability

In an interconnected world, businesses understand that collaboration can change the world for the better. Collaboration involves the potential for system change through collective action by alliances within industries or partnerships between public and private sectors. Businesses, academia, NGOs and governmental bodies provide opportunities to seek knowledge transfer, shared access to resources and problem-solving.

Even policies and incentives by the government to promote research and development (R&D) and ultimately, implementation of GPI can contribute significantly toward sustainability goals. Best practices shared among businesses provide common resources that are pooled and co-innovated, which helps companies accelerate the adoption of green processes.

Overcoming Challenges

Attaining new technologies and processes can be expensive. However, long-term savings due to reduced waste and resource consumption, as well as incentives from the government, can offset the initial investment.

Second, integration of green practices requires very specific skills and training. Upskilling the workforce and collaborating with sustainability experts could help overcome this problem.

Finally, moving established processes often faces internal resistance. Good and transparent communication in the long-term helps business get a buy-in from employees.

To overcome these obstacles, businesses must invest in capacity building, incentivise sustainability initiatives and adopt a culture of innovation and experimentation.

The Power of AI

It is necessary for businesses to be nimble enough to demand for the imperatives of innovation, changing regulations and constant advancements in technology. AI technologies have unprecedented capabilities to analyse huge datasets to identify patterns and optimise processes in real time. It helps businesses improve their decision-making, predict future trends and prepare to respond proactively to environmental challenges. AI-based predictive analytics will further be used to identify innovation opportunities and improve sustainability performance.

GPI is not just about 'green responsibility'; it is a strategic imperative for businesses seeking long-term success. By embracing GPI, businesses can leverage a competitive advantage, attract green consumers and build loyalty towards the brand. In embracing such a journey, businesses are bound to not only thrive but also become custodians of environmental conservation, leaving a legacy for generations to come.

(The author is chief innovation officer and head of group services, Aditya Birla group. Views expressed are personal.)