Launching Your Team's Climate Innovation Journey: The Strategic Planning Process
A step-by-step guide for capitalizing on sustainability trends and transforming your business into a market leader
I’m often asked from potential clients what a climate innovation project looks like. Although the details are specific to each client, step one of the process always looks the same:
Let’s figure out where we are.
Let’s figure out where we want to go.
Let’s figure out the optimal (read: most profitable) way to get there.
Is a stronger market position, better margins and a healthier business a destination your company might want to go to?
Then buckle up!
Where Are We?
Step one in any strategic process is figuring out where you are.
I got back into running recently, and step one was realizing I was no longer in shape to run half marathons (heck, 5ks were a stretch!). Acknowledging that, I built a training program that got me from where I actually was and built back up to the goal I wanted to achieve.
Like in life, in business. The first step in designing a climate innovation strategy—before you get to explore all the cool new technologies out there or how to incorporate them into your business—is figuring out where you are.
What is your business good at? What are you known for? Do you already have a competitive advantage in the market? What customer trends are going on that you should consider? Are there regulatory (particularly local or state) that you should consider?
Notice these are all just core business considerations — incorporating climate innovation into your business is about your business, not about the technology.
With a solid, objective understanding of where your business sits in the marketplace, we’d then determine what your environmental footprint looks like.
Critically, hyper precision isn’t needed here!
It’s enough to know what is generating carbon in your business that might be worth addressing and where you can make the biggest environmental impact—you can add precision later. (See my post on carbon accounting for more on this)
Where Are We Going?
With an understanding of where the business is today—both the business’s performance and the sustainability footprint—we can then ask the fun question:
What goal do we want to aim for?
Critically, this should be a business goal, not just a sustainability goal.
For example, maybe you’re a professional services firm. You have a highly educated workforce who are concerned about the climate crisis and their role in it. Employee turnover is a significant cost for you. Maybe one of your goals should be to increase employee retention by providing tools and opportunities for your employees to take action on sustainability issues.
Done successfully, you’ve accomplished two things—you’ve made your workforce more sustainable (a Scope 3 impact) while, critically, reducing your employee turnover and associated costs.
You’re having both an impact on your business while also having a climate impact—and that’s the point. Both must be done for any change to have long-term viability.
Maybe your goals are to reduce your packaging costs while reducing the carbon impact of your outbound transit. Maybe it’s to unlock a new customer segment by new net-negative carbon product. Maybe it’s to capture the brand space of environmental leadership in your industry.
Whatever it is, if you don’t have an explicit goal—a destination all your work is driving to—you’ll never get there.
How Do We Get There?
Now’s the fun part!
You know where you’re starting from. You have a destination in mind.
How do you get from A to B?
The recommendations here are 100% unique to your business, but tend to fall into a couple of categories:
First, is your chosen path bespoke—meaning only your business could implement it? Or is it universal—meaning it's something many others have already implemented?
I spoke recently with a vehicle manufacturer who was implementing recycled aluminum in their products to drive down their product portfolio’s carbon footprint. They needed a specific metallurgy footprint. Tensile strengths. Engineering things.
That’s very bespoke.
On the other end of the spectrum, I spoke recently with a consumer product company that’s concerned about the impact of their packaging. That’s pretty universal—if you make a physical product, at some point it probably goes in a package. A lot of off-the-shelf sustainable packaging solutions exist that can help.
Either bespoke or universal are OK paths!
Bespoke implementations can provide a stronger competitive advantage (only your company could implement it), but can be higher risk and more expensive. Universal solutions tend to be more “low hanging fruit”—low risk to implement, but unlikely alone to provide a competitive advantage because everyone can do it. And if everyone can do it, it’s hard to make that an advantage.
(For more on Universal Options, see “The Universal Playbook” here and here)
Second, do you need to build or buy?
If your path is highly bespoke (like my vehicle manufacturer trying to determine which recycled aluminum to use) you may need to build your solution. You’ll need to do the science or engineering (often in partnership with your suppliers) to bring something completely new to market.
The reward: Having “something new” is almost always a competitive advantage.
Need an example of someone doing this well? Take a look at Interface and the new carbon-capturing products they’re designing.
A slightly easier variant of completely building it yourself?
Build a platform solution based off a host of individual point solutions. Like Lego bricks, if assembled correctly, a handful of smaller innovations can create something unique for your firm—with low technology risk. (As an example, VendorX is trying to bring platform solutions to the climate tech startup space).
Lowest risk of all: Maybe you just purchase the innovation of someone else. If it’s a solution that’s particularly impactful for your business, it can also be an opportunity to invest in the startup supplier and participate in their upside.
Again, it just depends on what your goals are.
Artifacts & Other Shelf Art
If you’re thinking that this process looks a lot like a strategic planning & review process, you’re right—that’s exactly what it is. It’s just a strategic plan through the lens of climate & environmental sustainability.
Your team will generate key documents to track the process and make it a “living” one that you can keep current:
Sustainability Assessment. This captures the “Where Are We?” step above, and includes your carbon accounting data (if available). It also captures corporate goals & strategy, current initiatives that may be under way, and a competitive review of where your company sits in relation to your peers.
Sustainability Innovation Strategic Plan. This is both the “Where Are We Going?” stage above and a recommendation on “How Do We Get There?”. It captures key items like opportunities that may exist in the market place, new technologies that may impact your company and its products, a scorecard to evaluate current and future initiatives and opportunities, and other relevant material.
One-page Business Plans. For the top opportunities in the strategic plan, how are we going to implement and what’s the business case for it? What’s a rough pro forma set of financial projections look like? What’s the implementation plan & timing? Although it might be longer than a single page, the point is that it’s actionable, not encyclopedic.
What’s the Why?
“Wait,” you might be saying, “I know I want to do something sustainable—we’re going to update our packaging to reduce carbon and cut our packaging costs. Why do I need to go through this process at all?
I’m not a processes for processes-sake guy, but this is one instance where going through a formal review and planning process is critical.
Why?
It gets alignment on what you’re doing, and critically, on why you’re doing it. It also gets buy-in from across the organization.
Maybe fixing packaging really is the best opportunity for your organization—or maybe there’s a different initiative that can have a bigger impact while saving you more money. Isn’t it worth a few weeks’ attention to do the work correctly to know you’re spending your time and money on the right thing?
The Bottom Line
Climate innovation isn't about chasing the latest green technology or having marketing make empty sustainability promises. It's about methodically incorporating sustainability into strategic decision-making to make your business stronger. The most successful companies are already using this approach to:
Create and capture new market segments
Reduce operational costs
Strengthen their competitive position
Future-proof against coming regulations and market shifts
But they're doing it strategically, not tactically. They start with clear-eyed business analysis, define specific goals and then implement with precision. They know where they are, where they want to go, and have a clear plan to get there.
The companies that will thrive in the next decade are the ones preparing now.
Are you?