Building a Sustainability Strategy Around Customers
3/31/202632 min
For sustainability to be a core part of your business model, you might need to rethink how and why you incorporate sustainable policies and products. That's according to IMD Business School professor Goutam Challagalla, who explains that many customers don't want to pay a premium for sustainability. Instead, he argues that good intentions around sustainability can often lead to weak strategy and wasted investment. He explains how instead, leaders should think about sustainability as a way to create innovation and truly drive customer value, by doing things like reducing inefficiencies and creating affordable products. Challagalla is coauthor, along with Frédéric Dalsace, of the book Clean Winners: Sustainability Strategy That Puts Customers First.
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First 90 secondsAlison Beard· Host0:00
[on-hold music] By twenty thirty, finance could harness hindsight, insight, and foresight to elevate your function from necessary cost center to value creator. Explore Deloitte's Future of Finance publication to shape your team's impact. Visit deloitte.com/us/futureoffinance.
Adi Ignatius· Host0:17
[on-hold music] I'm Adi Ignatius.
Alison Beard· Host0:33
I'm Alison Beard, and this is the HBR Idea Cast.
Adi Ignatius· Host0:37
[on-hold music] So, Alison, look, as you know, there has been increased scrutiny in the past year or two over sustainability efforts, particularly in the US. Many companies have doubled down on their commitments, but some have deprioritized it under stakeholder and even political pressure and given everything else that they need to worry about.
Alison Beard· Host1:01
Yeah. I think with all the geopolitical turmoil, economic uncertainty, and the rise of AI and everyone figuring out what they need to do about it, it does feel like many organizations have put ESG on the back burner, or at least they're not talking about it as much as they used to, even though it's obviously still very important and something a lot of consumers still care about.
Adi Ignatius· Host1:21
So today's guest is a believer in sustainability but thinks companies are handling it wrong. I mean, look, I think about myself. I buy sustainable products. I will pay a