Building a Sustainability Strategy Around Customers

HBR IdeaCast

Harvard Business Review

Business, Hbr, Business/entrepreneurship, Innovation, Strategy, Business/management, Management, Communication, Harvard, Entrepreneurship, Business/marketing, Leadership, Marketing, Finance, Economics, Teams

4.3 • 1.9K Ratings

🗓️ 31 March 2026

⏱️ 33 minutes

🔗️ Recording | iTunes | RSS

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Summary

For sustainability to be a core part of your business model, you might need to rethink how and why you incorporate sustainable policies and products. That's according to IMD Business School professor Goutam Challagalla, who explains that many customers don't want to pay a premium for sustainability. Instead, he argues that good intentions around sustainability can often lead to weak strategy and wasted investment. He explains how instead, leaders should think about sustainability as a way to create innovation and truly drive customer value, by doing things like reducing inefficiencies and creating affordable products. Challagalla is coauthor, along with Frédéric Dalsace, of the book Clean Winners: Sustainability Strategy That Puts Customers First.

Transcript

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0:00.0	A new digital reading experience from Harvard Business Review is here.
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0:37.3	I'm Adi Ignatius.
0:39.1	I'm Alison Beard, and this is the HBR Ideacast.
0:50.1	So, Alison, look, as you know, there has been increased scrutiny in the past year or two over sustainability efforts, particularly in the U.S.
0:57.1	Many companies have doubled down on their commitments, but some have deprioritized it under stakeholder and even political pressure and given everything else that they need to worry about.
1:06.7	Yeah, I think with all the geopolitical turmoil, economic uncertainty, and the rise of AI and everyone figuring out what they need to do about it, it does feel like many organizations have put ESG on the back burner, or at least they're not talking about it as much as they used to, even though it's obviously still very important and something a lot of consumers still care about.
1:27.3	So today's guest is a believer in sustainability, but thinks companies are handling it wrong.
1:32.2	I mean, look, I think about myself, I buy sustainable products.
1:34.8	I will pay a premium for them, you know, those products that are lighter colored and you
1:38.5	assume that they're better for the environment.
1:40.7	As his research shows, most people will not do that.
1:43.3	But he has a framework for thinking about sustainability, not as a constraint that we need to limit our mix of products or what they could do, but as a source of innovation.
1:52.2	It's sort of a new lens on sustainability work.
1:54.5	That seems really smart because I think the companies that do see the most gains from sustainability efforts really embed it into their strategy.
2:02.5	It's how they plan to win, right?
2:04.9	Absolutely.
2:05.8	So today's conversation will focus on how to be smart about sustainability and to ensure that it drives innovation and growth.
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