UK business could secure £100 billion in annual productivity gains generated by innovations designed to address environmental and social challenges, according to a new report by Accenture 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.
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 £61 billion by scaling resource efficiency and energy efficiency initiatives and through the use of cleaner technologies, according to analysis based on data published by the Department for Business Innovation and Skills. For example, Marks & Spencer reduced its clothing delivery vehicle fleet by 25 percent and improved fuel efficiency by 30 percent.
Circular economy: the UK consumer goods industry could save up to £18 billion 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.
New consumption models: Currently worth approximately one percent 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 £3 billion and £29 billion 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 and customer engagement regarding product origins can boost trust and loyalty, with estimates that the UK manufacturing sector could also generate cost savings of £3 billion per year.