DISCUSSION Building BRICs: Sustainable Innovation

by Yolanda Villafuerte _______17th June 2013
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by Alex Rubin

Sustainable innovation in emerging economies

From blue chip FTSE 100 companies to SMEs, sustainable innovation clearly has a place in the economies of the developed countries. However, it is within the emerging economies where companies are increasingly influencing a sustainable future – combining environmental, social and business sustainability.

Brazil

In Brazil, the positive impact companies are having on the environmental and social landscape is staggering. Natura Cosmeticos, an organic cosmetic producer and distributor is a key illustration of this development where close links with a number of local stakeholders has led the way to a sustainable business model. In particular, the company’s strong relations with NGOs, local government and local inhabitants have provided vital expertise for this model. Through local knowledge and trust, Natura Cosmeticos has gained an abundance of information concerning the natural resources it extracts to provide the company’s raw materials. This has enabled the company to create a sustainable and responsible model of plant extraction – unlike larger MNCs – without placing an enormous pressure on the country’s ecological resources.

What’s more, relations with local companies in Sao Paulo have also provided the company with sustainable expertise in packaging. Natura Cosmeticos’ relationship with Braskem, a local Brazilian company, has led to the development of a ‘green’ plastic bag. This is a bag produced from sugar cane which is set to reduce the company’s greenhouse gas emissions by 70%.

Influencing sustainable social development has also been a feature of Natura Cosmeticos’ business model. The creation of jobs for the local community and embedding individuals within the company’s culture (the need to continually innovate and be resource efficient) represent just two of the unique features of Natura Cosmeticos’ sustainable social model.

As a result, Natura Cosmeticos’ business model of sustainability has provided the company with a USP (unique selling point) and strong brand image. This has enabled the company to compete with multinational corporations due to its inclusive, green and organic approach to the cosmetics industry.

India

Electrical power in India is in short supply so the necessity for improved technology and efficiency is imperative. Suzlon, a former textile business, and now one of the largest global wind turbine producers is fulfilling this role to a large extent. It provides some 17,000 megawatts of wind power energy across twenty eight countries, but its main aim is to provide local domestic customers with sustainable access to power who have previously been without it. This involves vast amounts of R&D research in identifying geographic inefficiencies and local power scarcities with the objective of supplying wind power to these areas of the country. A particular example of Suzlon’s work is its windmill project – a windmill that produces electricity but also uses the air to produce drinking water and agricultural irrigation.

Suzlon’s sustainable innovation doesn’t stop there. It seeks to continually expand its R&D and collaborate with European partners across Germany and the Netherlands. At the company’s headquarters, there is a zero-waste policy which includes recycling of all the used water. Low energy air conditioning is an additional sustainable practice contributing to an inexpensive capital investment project. On job hirings, again, Suzlon aims to foster social innovation which fits with its own unique culture. At an international level, the company employs Indian engineers, technicians and management personnel to keep these values alive.

What both of the above examples highlight is the ability of corporations to implement, educate and promote sustainability in fast-paced economically developing countries. This is definitely an area of expertise and business modelling which countries such as the UK could learn from and innovate within various industries.

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