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Growing green awareness gives eco-innovation a competitive edge

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece here in The Financial Times or enjoy below

🗞️ Driving the news: Research conducted by Princeton, London School of Economics, Insead and Collège de France indicates that climate-friendly actions by businesses, such as cutting emissions and setting net-zero targets, can boost shareholder value
• Consumers increasingly prefer environmentally conscious options, exemplified by the rising demand for electric vehicles

🔎 The context: The traditional view, associated with economist Milton Friedman, is that environmental concerns are outside the scope of businesses or are detrimental to economic growth 
• However, there is mounting evidence that integrating sustainability and innovation in products and services can provide a competitive edge

🌍 Why does it matter for the planet: Increased consumer preference for sustainable products drives businesses to innovate in clean technologies
• This, in turn, can lead to a reduction in harmful emissions and a positive impact on the environment

⏭️ What’s next: As consumer pro-environmental sentiment grows, companies are likely to continue investing in sustainable innovations
• Policymakers can capitalize on this trend by implementing educational programs and grassroots campaigns to further shift environmental attitudes, thereby encouraging the adoption of clean technologies

💬 One quote: "Given that some consumers are willing to pay more for greener products, companies might consider a new mindset. Rather than seeing climate mitigation as a regulatory burden, they should see it as an opportunity — environmentally friendly approaches can yield both profits and a competitive edge." (Ralf Martin, Centre for Climate Change Economics and Policy)

📈 One stat: A study conducted in 25 countries showed that in places where pro-environmental sentiments were on the rise, companies exposed to these markets intensified innovation in electric, hydrogen, and hybrid technologies and decreased innovation in combustion engine technologies

Click for more news covering the latest on Sustainable Finance

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