Why business matters - from sustainability to competitive advantage
Business sits at the heart of the transition to a flourishing economy. For years, sustainability has often been positioned as a corporate responsibility, a reporting exercise or a compliance requirement. While these efforts have delivered important progress, they have rarely been enough to transform how organisations compete and grow.
Our research identifies a different motivation - that companies creating the greatest long-term value are often those that use sustainability as a catalyst for innovation, new products, new business models and organisational transformation.
What we've discovered
Drawing on our GOLDEN Dataset of more than 2.6 million sustainability initiatives across 23,000 companies worldwide, we've found that not all sustainability effort creates economic value. Organisations that make unusually large investments in innovation and organisational transformation consistently outperform their peers, with measurable gains in return on assets, return on equity and profit margins in the years that follow. Symbolic or compliance-driven activity alone does not produce the same effect.
Sustainability creates the greatest value when it becomes a driver of innovation, not simply a mechanism for reducing harm.
The journey to systemic value
Organisations evolve through stages of maturity, mapped in our Business Impact Maturity Model. At first, sustainability is treated as a risk to manage; over time, it becomes integrated into operations, strategy and decision-making.
The most advanced organisations go further still. Beyond a certain point, the relationship inverts: purpose expands to include the genuine creation of value for others, and profit becomes the means by which the organisation generates resources to maximise positive impact, rather than an end in itself.
Our Business for Impact goal
We want to help organisations move beyond compliance and towards a future where creating positive societal and environmental impact drives corporate decision-making as a source of enduring competitive advantage.
The flourishing economy begins with businesses that create value for both shareholders and society.
Our Business for Impact Pathway is led by Leonardo's Business Impact Lab, with contributions from Data, Systems and Modelling, Social Impact and Impact Finance Labs.
