Yet, sustainability-driven innovators face two interconnected challenges. First, innovation and product development teams are increasingly required to incorporate sustainability criteria without compromising product performance, particularly in terms of cost and quality. Second, many sustainability objectives involve complex changes to a company’s value chain — and to society as a whole — demanding solutions that extend beyond a single company’s immediate control.

As a result, leaders may struggle to connect their sustainability goals with the transformative changes needed to achieve them. To learn how others have done this, we studied a dozen companies in a range of industries that have ambitious sustainability objectives and have made them the driving force for innovation in their products and operations.

These companies start with practices that will be familiar to innovation leaders. First, they reframe sustainability as a source of strategic growth rather than a compliance problem. Then they collaborate to develop new products and processes with lead customers and trusted partners who share their commitment to sustainability.

However, achieving their aspirations requires more than the efforts of innovation and product teams, so these companies have changed how they plan, invest, and compete. They involve business functions such as finance in creating a long-term strategic vision for sustainability. Further, they engage additional stakeholders — including competitors, universities, startups, and regulators — in collectively transforming their industries.

Balancing Sustainability With Traditional Performance Metrics

Innovators face two core challenges to incorporating sustainability. One of the most immediate and persistent is upholding traditional business metrics such as cost, quality, and performance for new products. For example, the Fabrics business within W.L.