Sustainability as a Strategy: Leveraging Industry Research to Find Green Opportunities

We have seen sustainability transform from a peripheral concern to a central business imperative, driven by mounting environmental challenges and shifting societal expectations. Companies now recognise that integrating sustainable practices is not just a matter of corporate responsibility but a strategic approach to long-term success. As the pressure intensifies from consumers, regulators, and investors for greener, more transparent practices, businesses increasingly seek ways to align their operations with environmental goals while maintaining competitive advantage.

One vital way to uncover these opportunities is through targeted industry research. By analysing market trends, regulatory shifts, technological advancements and boiling sustainability risks, organisations can gain the insights needed to identify the green opportunities that will yield the greatest return. Industry reports provide a roadmap for businesses to navigate the complexities of sustainability, allowing them to pinpoint areas where they can innovate, reduce waste and optimise resource use.

The growing demand for sustainable practices is evident across multiple stakeholders. Consumers are more conscious of the environmental impact of their purchases, regulators are enforcing stricter environmental standards, and investors are prioritising companies with strong sustainability credentials. As a result, embracing sustainability is not only a means of risk mitigation but also a way to unlock sizeable economic, social and reputational benefits. Companies that adopt green strategies stand to improve their bottom line, enhance their brand image and foster stronger relationships with stakeholders.

How to identify emerging sustainability trends

Identifying sustainability trends requires a targeted approach, highlighting environmental, social, and governance issues that are most poignant to organisations across the globe. For example, comprehensive industry ESG assessments can help companies identify environmental risks, spot nascent trends and anticipate how these may shape their industry’s future, turning sustainability risks into sustainable opportunities.

Viewing ESG risk scores by sector allows you to gain a holistic view of where your industry sits in terms of sustainable transition. Once you have a better idea of what other sectors are doing well, you can dig a little deeper. For instance, an industry with a high ESG risk score may benefit from government investment to support green transition or succumb to increasing regulatory scrutiny, helping businesses determine where to focus their sustainability efforts for maximum impact, whether investing in green technology or the circular economy.

Industry reports can also accompany these insights with growth projections that allow you to assess the market potential of pursuing a green strategy. Are you operating in an industry with a high growth forecast and a soaring ESG risk score? Well, that might be your ticket to sustainable success.

Tracking key innovations

Tracking key innovations is another essential strategy for identifying sustainability opportunities. Advances in renewable energy are among the most significant drivers of green business strategies. Solar, wind, and clean technologies continue to evolve, with adoption rates rising as efficiency improves and costs decline. By monitoring these breakthroughs through industry research, businesses can position themselves as early adopters of renewable technologies, securing a competitive edge in energy-efficient operations. While this can lead to cost savings and improved brand reputation, it also drives new revenue streams as demand for sustainable energy solutions increases across the consumer and corporate markets.

The circular economy represents another sustainable strategy to watch out for, gaining significant traction in manufacturing, retail, and waste management. Businesses are shaping traditional business models by designing products for reuse, recycling, or remanufacturing. By studying companies' successes in embracing circular principles, businesses can adapt their strategies to reduce waste, optimise resource use, and drive efficiencies. Competitor analysis can stimulate new ideas! However, differentiation is key, and companies must carve out a niche that aligns with their objectives and principles.

Sustainable supply chains are also increasingly in the spotlight. With consumers and regulators demanding greater transparency, businesses must examine eco-friendly sourcing, ethical practices, and logistics optimisation. Research into sustainable supply chains reveals the growing importance of reducing carbon footprints, particularly within the transport sector, along with minimising waste and ensuring ethical sourcing of materials. Companies that prioritise these aspects within their operations mitigate risks and cater to the rising consumer demand for socially responsible brands.

Green technology remains an essential driver of sustainability. Innovations such as carbon capture, waste-to-energy solutions, and energy-efficient building designs are revolutionising industries ranging from construction to waste management. Businesses that track developments in green technology can identify new tools and solutions that can enhance their sustainability performance while reducing operational costs. By staying abreast of these advancements, companies can better position themselves as leaders in the green economy, benefitting from both the reputational advantages and cost-saving potential of cutting-edge, environmentally-friendly technologies.

How to evaluate the viability of sustainable opportunities 

To evaluate the viability of sustainability-focused strategies, strategists must consider their market potential, including the current market size, growth rate, return on investment, and assess the emerging risks associated with said investment.  

For instance, let’s say I am an electricity retailer, and I wish to change the mix of the electricity I supply to my customers from non-renewable sources to renewable sources. What is there to consider?

• What is the cost of transition to renewable electricity generation? What are the differences in wholesaler prices between renewable and non-renewable electricity?
• What is the potential increase in customer base from sourcing renewable electricity? Are consumers going to be willing to pay more for renewable electricity?
• What are the future regulatory costs if I don’t switch to renewable electricity? Perhaps the company could benefit from tax incentives and long-term cost savings if it made a strategic switch.
• What are the risks associated with only using renewable electricity? Supply constraints, lack of upstream energy storage capacity and cheaper imported electricity spring to mind.    

Using industry research in evaluation

Now for the practical steps: how can you use industry research and expert analyses to gather data on green opportunities? Firstly, business environment profiles allow you to stay on top of consumer trends, whether total electricity consumption or total use of renewable energy sources, allowing you to assess the customer readiness for green transition. Industry regulatory analysis can also highlight key regulations or tax incentives that may incentivise the go-to-market strategy, like the UK Electricity Market Reform (EMR) or the UK Emissions Trading Scheme (UK ETS).

From an industry perspective, a SWOT analysis allows you to prioritise sustainable trends that align with your company's strengths and goals. Is your industry receiving high and increasing levels of assistance? If government grants or subsidies exist, that might be your cue to jump into sustainable change. You can even leverage AI tools to dig deeper and highlight some of the key sustainable trends and opportunities facing companies in the industry in which you operate.

ESG risk assessments are the perfect place to go if you want an idea of some of the most pressing issues facing businesses from a sustainability point of view. How can you use this information? Synthesizing some of the inescapable shifts in downstream business and consumer preferences could accelerate diversification, setting the foundations for opening new revenue streams that align with sustainable outcomes. Want to lower carbon emissions? Well, maybe you should look to liquify some of your existing carbon-emitting assets and re-invest in low-emission technology, keeping regulators and businesses happy while boosting your long-term revenue prospects.

How to conduct a competitive analysis of sustainable business opportunities 

How do we understand the evolving sustainability landscape? ESG assessments highlight how companies have overcome challenges related to key sustainable issues, whether it be mounting consumer pressure or a changing regulatory landscape. This research sheds light on the top ESG issues for major companies in an industry and reports on how the companies have responded, providing a roadmap for further strategic change.

For instance, if a competitor has implemented energy-saving measures but hasn't yet addressed sustainable packaging, your business could stand out by focusing on that area. Analysing the effectiveness of these strategies from a customer's point of view allows you to avoid your competitors' pitfalls, something you would miss without industry research. It's important to keep an eye on the industry leaders—those setting benchmarks for sustainable innovation. They often pioneer new technologies and practices that can help you stay ahead of the curve.

In terms of tools for analysis, company SWOT analysis can be particularly useful when assessing competitor positioning in the sustainability space, providing a clearer picture of where your business fits in the overall competitive landscape. Company benchmarking and case studies are invaluable resources for gaining actionable insights from those already succeeding in sustainable practices. These tools allow you to measure the effectiveness of sustainable strategies from a financial point of view. Are your competitors benefitting from an increased profitability or market share due to a sustainable strategic shift? The answer lies in market research.

Strategically, there are also a few ways to differentiate your business. One of the most effective is addressing unmet market needs or setting more ambitious sustainability goals than your competitors. Another approach is to form strategic partnerships with suppliers or stakeholders who are equally committed to green initiatives, thus building a unique and impactful sustainability ecosystem. It’s essential to communicate your efforts effectively to enhance your brand reputation. Today’s consumers are more environmentally conscious than ever, and transparent communication can greatly earn their trust and loyalty.

Case study: Pact Group Holdings

Take the success of Pact Group Holdings, a snazzy packaging and recycling firm. They initially set out to be a leader in the circular economy, wanting to stay ahead of the sustainability curve and ensure they overcame challenges related to plastic waste management. They wanted to create smarter ways of reducing waste through reusing and recycling resources, keeping them in circulation well into the future.

Using industry research, Pact Group identified emerging opportunities in sustainable packaging while actively avoiding the threat of increasingly stringent packaging regulations in Australia. Company reports also allowed them to identify and examine the potential for strategic partnerships with downstream retailers, maximising customer exposure and their social impact.

The company saw potential long-term cost savings through more efficient resource use. By lowering emissions and fostering upstream partnerships focused on using recycled content in their packaging, they catered to increasing public concern over environmental issues and recycling.

Spurred by forecasted industry trends, Pact Group has outlined several targets for 2025, including boosting its recycling capacity to recycle up to 120,000 tonnes of plastic annually. The group is currently building two recycling facilities in Melbourne and is also in the planning phase for an additional three. The result?

By continuously seeking innovation through sustainable strategies, they fine-tuned their goalposts, reducing packaging waste and improving packaging design. They stayed ahead of the curve and built a packaging brand adored by eco-warriors. Their adaptability showcased their commitment to sustained impact, earning them high praise from stakeholders and a loyal customer base.