Companies are setting ambitious sustainability goals at a time when many of the needed solutions do not yet exist. The firms that make real progress treat sustainability as an opportunity for innovation and growth, not a compliance burden. This shift forces leaders to rethink how they design products and run the business. It also exposes tensions between green goals and the usual measures of success.

To see how leading firms navigate these tensions, we studied a dozen companies across several sectors that treat sustainability as a central driver of innovation. Their experience points to two linked challenges. First, they must pursue sustainability without hurting product performance or raising costs beyond what customers will accept. Second, because many sustainability issues are systemic, they must work with and influence actors well outside their own organisation.

Our in-depth research shows these challenges can be overcome. We found five innovation practices that help firms turn sustainability ambition into practical results.

1. Reframe sustainability as a growth opportunity

Many organisations still see sustainability as a matter of compliance. The companies we studied took a different path. They treated sustainability goals as a source of new ideas, new products and even new business models.

Italian energy utility Enel offers a strong example. Clear sustainability targets encouraged the company to expand into new services. This led to the creation of Enel X, a smart-infrastructure unit serving homes, cities and public transport. Its services range from streetlight poles that carry sensors to integrated systems for electric buses. 

Brazilian pulp producer Suzano made a similar move when it developed Eucafluff, a pulp made from fast-growing eucalyptus. Its strong performance and smaller footprint have fuelled demand.

In these cases, sustainability sparked new growth rather than limiting it. 

2. Work with mission-aligned lead users

Innovators often work with lead users who are ahead of the market. In the sustainability context, the most valuable partners are those who share a commitment to green goals and are open to testing new ideas.

One clear example is the work between global cement maker Holcim and British property developer Canary Wharf Group. The developer wanted lower-carbon materials for a major London project. Its aims aligned closely with Holcim’s, which allowed both sides to test concrete mixes that used recycled aggregates and reduced emissions. 

Enel also found new lead users. It helped a brewery replace gas-fired systems with geothermal electricity to produce steam. The brewer lowered its emissions, and Enel gained a new use case for clean power.

Aligned customers create room for learning and help new solutions build early traction.

3. Build new partnerships when existing ones are not enough

Many sustainability challenges require skills that a company’s current partners do not yet have. Firms often need new collaborators who bring technical expertise, help share risk or support new business models.

Enel X and BYD, a Chinese electric-vehicle maker, joined forces to speed up the use of electric buses in Latin America. BYD brought manufacturing knowledge, while Enel offered insight into electric grids and city needs. They created a bus-as-a-service model that replaced large upfront purchases with monthly fees. This made it easier for cities to switch to electric fleets. 

In Morocco, fertiliser producer OCP Group partnered with global engineering and technology firms to develop green ammonia, which is essential for decarbonising fertiliser. Gore Fabrics, a performance-materials company, also looked beyond its usual network. Working with recycled-plastic start-up Bionic Yarn, it created textiles made from plastic collected from remote coastal communities. The partners found a niche group of customers willing to pay for premium products with strong green benefits. This led to an initial launch with Patagonia, an outdoor-apparel brand, and later work with other brands.

These cases show that leaders often need partnerships that did not exist before the sustainability agenda took shape.

4. Think long term and work backwards from the future

Companies that have made real progress on sustainability often began with a long-term view. They pictured the future they wanted to see, then mapped the steps needed to get there.

Enel used the United Nations Sustainable Development Goals as a guide. This helped the company define a purpose beyond short-term metrics and tied sustainability to long-term value. It then drew up a 10-year plan that linked its goals with growth opportunities and strategic risks.

Holcim followed a similar logic. After committing to net-zero emissions by 2050, its teams studied future technology trends and industry needs. They examined areas such as hydrogen, alternatives to limestone, as well as carbon capture. By breaking the work into stages, Holcim found ideas that could be viable in the near term, even though the wider market was still catching up.

This long-range view freed the companies from the limits of short planning cycles and revealed opportunities that shorter-term thinking would miss.

5. Create coalitions to tackle systemic challenges

Some sustainability goals exceed the limits of any single organisation or industry. In these cases, companies benefit from building coalitions that include competitors, researchers, regulators, start-ups and civil society.

Suzano helped form Biomas, a consortium that aims to restore millions of hectares of Brazilian forest. The project protects soils and habitats that Suzano depends on, while also restoring nature more broadly. As for Enel, it brought suppliers, start-ups and competitors together to reduce emissions from electrical grid cables. Shared demand encouraged suppliers to invest in greener products.

Holcim also relied on broad collaboration. It worked with a start-up, neustark, on recycled concrete that stores captured carbon, and with engineering firms on large-scale capture at cement plants. The company later co-founded All4Zero, a cross-sector initiative that brings together actors in fuels, aviation and steel to test new decarbonisation methods.

Global partnerships are also in view. Plug and Play, an innovation platform working with the Alliance to End Plastic Waste, created a global hub for corporates, start-ups, researchers and governments. With significant capital committed, this hub now helps develop new ways to tackle plastic waste at scale. 

These coalitions show how joint action can speed up progress on tough sustainability goals.

Turning ambition into results

When leaders make bold sustainability commitments, they are also calling for innovation. The companies we studied show that progress comes from reframing sustainability as opportunity and working with aligned customers. It also depends on developing novel partnerships, planning for the long term and forming coalitions that can influence whole industries.

Innovation becomes the bridge between ambition and achievement. When firms combine clear vision with strong collaboration, they are more likely to turn sustainability goals into concrete gains for their business and the wider world.

This is an adaptation of an article published in Sloan Management Review.