Little known brands from India, China, Egypt and Costa Rica are putting sustainability at the heart of their business to benefit people and the environment
The new sustainability champions aren’t just from the Bric nations, there are also innovative examples in nations such as Costa Rica Photograph: Kent Gilbert/AP
The big green global brand names that go beyond regulatory compliance to operate in environmentally responsible ways are already known, but who are the fast-growth companies from emerging markets looking very sharp in terms of their environmental and social initiatives?
The World Economic Forum and the Boston Consulting Group (BCG) have identified a group of companies that share a unique mindset and set of practices that enable them to grow fast while actively tackling environmental and social challenges in their regions. These companies — we call them new sustainability champions — aren't just from the Bric nations (Brazil, Russia, India, China). There are also innovative and highly successful examples in nations such as Costa Rica, Egypt and the Philippines.
The forum, in collaboration with the BCG researched companies from emerging markets to identify those who create innovative and profitable solutions to drive growth while positively influencing their regions' sustainability. Together, they analysed more than 1,000 companies on the criteria of sustainability, innovation, scalability, geography, and size. They interviewed 200 regional, industry and subject experts and directly engaged chief executives and chairmen of 50 top-performing emerging market enterprises.
The result show that innovation of all kinds is burgeoning in emerging markets — the very regions where the pressures of resource depletion will be felt most keenly.
There's Shree Cement which, when faced with limited access to low-cost energy, developed the world's most energy-efficient process for making its products. The Indian company has become the global benchmark: leading cement companies from around the world visit Shree to learn from its innovations.
In China, Broad Group, a large producer of air chillers, uses alternative energy sources such as waste heat from buildings to power its range of non-electric air-conditioning units. This accommodates a key constraint in China: many people still live "off-grid," and for those who do use electricity, grid supplies are not always reliable.
And Sekem, an Egyptian organic food producer, takes a holistic view of environmental and social development. The company uses organic farming as a way to reclaim desert land, producing food for the local market and reinvesting the profits in the community. Sekem also has a highly unusual business model. It shares profits with the smallholder farmers in its network.
The achievements of companies like these are especially laudable because they (and their emerging-nation peers) must continually contend with a host of problems — from substandard infrastructure and weak environmental regulatory regimes to acute talent shortages and poor governance practices.
The new sustainability champions share three broad sets of characteristics:
1. They continually invest in innovation to turn constraints into opportunities. The champions typically eschew expensive research into new technologies in favour of making current products cheaper, more widely available or better suited to local production processes. They also stand out for their ability to turn constraints in delivery channels into opportunities. For instance, they may identify alternative production methods to get products to market more directly.
2. They embed sustainability in their company culture. They are aware that deep and sustained impact requires demonstrable commitment from the entire organisation—not only from the top management team and certainly not solely from the chief executive. The best intentions can flounder, or be subverted, if they are being implemented by a sceptical or indifferent team. Conversely, an engaged and proactive staff can be a constant source of new ideas for products, services, delivery mechanisms, talent development, supply sources, and more.
3. They proactively shape their own business environments. They recognise that maximum impact cannot be achieved only within the boundaries of their own organisations. They understand that it requires engagement with the wider business ecosystem of regulators, competitors, suppliers, customers, and other stakeholders.
Why the new sustainability champions matter now
The cumulative performance of these companies matters because emerging markets in total are set to contribute more than three quarters of global growth — and because those markets will likely feel resource scarcity most. By 2050, the world's population is expected to be about 30% greater than it is today. By 2025, Brazil, China, India, Indonesia, South Korea, and the Russian Federation together will account for more than 50% of the world's growth.
We're convinced that these champions are more than just symbols. They're in the vanguard of the businesses working to solve fundamental environmental and social challenges and to reshape business landscapes. Collectively and one by one, they are becoming inspirational models not only for their emerging-market peers but for companies worldwide.
Jeremy Jurgens is senior director at the World Economic Forum and Knut Haanæs is a partner at the Boston Consulting Group. For more information visit: Weforum.org/nsc and Bcgperspectives.com
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