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Advantage Through Sustainability

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When it comes to sustainability, many companies first turn their attention to additional expenditures and extra costs, but hardly to strategic competitive advantages. This is risky and shortsighted.
Univ.-Prof. Dr. Marion A. Weissenberger-Eibl, May 28, 2018
Univ.-Prof. Dr. Marion A. Weissenberger-Eibl is head of the Fraunhofer Institute for Systems and Innovation Research (ISI) and holder of the Chair for Innovation and Technology Management at the Karlsruhe Institute of Technology (KIT).
Many companies only look at sustainability from the ecological perspective. This is important without a oubt, because the economy plays a key role in meeting national and international climate targets. However, the social and also economic component of sustainability is often forgotten. How closely these three dimensions interlink is well illustrated with the example of energy and resource efficiency: if companies consume raw materials and energy sparingly, this not only benefits the environment, but it relieves the financial burden and creates scope for investment and has major social impacts.

Research results from Fraunhofer ISI confirm that companies that know a lot about their energy and raw material consumption far more often deploy technologies for energy recovery or for recycling and thus save costs. Every third large company in the manufacturing industry and almost every fourth small and medium-sized enterprise (SME) now integrates energy efficiency in decision-making on future investment – such as the purchase of new machines and plants. And not least, smart energy management systems enjoy growing popularity as a means of accurately depicting material and energy consumption and thus optimizing entire production chains by utilizing knowledge of the material and energy flows involved. If companies deal with sustainability in a purposeful way, this also leads to advantages from a strategic viewpoint. For example, many manufacturing companies today are already dependent to some extent on the developments on the international raw material markets.
This dependency could grow in the future and force companies to handle energy and raw materials far more sparingly than before, to seek alternative suppliers or to consider substitution potential and recycling throughout the company. So if they are already doing this today by using resources sustainably, they can gain knowledge and competitive advantages, establish structures for reliable raw material supply, and they can help to make sure that technology-driven demand stimuli have less impact on raw material prices.
The responsible use of raw materials, in turn, has a positive impact on social structures. So the sooner companies tackle the field of sustainability and also take into consideration the social dimension of sustainability, the better they are prepared for the transformation to green economy in terms of society, economy and ecology.