Companies shape global value chains and influence consumption patterns. They can develop resource-efficient, and climate-friendly technologies, products and services for the growth markets of today and tomorrow. They can also reduce the pressure on the massive construction and expansion of infrastructures that is necessary worldwide, and thus reducing the global and local demand for raw materials and energy – if they are designed in an ecologically intelligent and socially innovative way. Therefore, transformation through innovation for climate protection and sustainability can only be designed with businesses and their core competencies.

Against the background of major societal challenges, companies face high expectations when it comes to designing their strategy and transformation processes. Pressure from external stakeholders for sustainable corporate management is increasing. Politicians are introducing new regulations and verification requirements. Consumers and financial market players are increasingly taking sustainability into account in their purchasing, financing, and investment decisions. They call on companies to quantify their impact on the environment and society and to disclose it in a reliable manner. In order for a company not only to assert itself against the competition in this dynamic, but also to play an active role in shaping it, a new entrepreneurial self-image combined with courageous and innovative strategies supported by a change in corporate cultures is necessary. This requires suitable framework conditions and individual transformation concepts that support companies in their change processes.

As an independent institute, the Wuppertal Institute conducts research on both the political-regulatory framework for economic transformation and the necessary transformation concepts for companies – such as sustainability assessment, strategy and roadmap development, qualification, and communication.

The sustainability transformation can only succeed if companies allow themselves to be guided by an expanded (system) innovation concept. In order to test appropriate innovations, companies will need their own development "laboratories", so-called real-world laboratories in which they can better understand the impacts of "sustainable and transformative products and services" and where internal company innovation processes are supported. For the Wuppertal Institute, the focus of its company-related research is on industries of particular relevance to emissions or resources and on "enabler" sectors/organisations, such as the education sector, the finance and insurance sector, information and communication service providers, logistics, and plant and mechanical engineering.

One of the biggest and most important current environmental issues is solving the climate problem. This requires far-reaching efforts by society, politics, and business. 50 per cent of global emissions are attributable to raw material extraction – which is why, in addition to the necessary structural changes in industry, a rethinking of the linear economy towards a circular economy is also necessary. This means that we need a systemic way of thinking – and new forms of cooperation and business models need to be developed. Further information on this can be found on the circular economy topic page. The Wuppertal Institute can offer companies targeted support on this path.

The energy-intensive basic materials industry – in particular, steel production, basic chemicals, the aluminium industry, glass, paper, and cement production – plays a central role in drastically reducing global energy and resource consumption. After all, these industries produce the basic materials for infrastructures, buildings, machinery, and consumer goods. The Wuppertal Institute shows the way forward with energy system and scenario analyses, analyses of resource flows along the value chains, and the specific innovation systems of the industries involved.

Financial market players shape capital flows needed to finance the required transformation towards a climate-neutral and sustainable economy. The European Union's New Green Deal is accompanied by a set of new rules for financing economic transformation – such as the EU Sustainable Finance Taxonomy, Climate Risks in Non-Financial Reporting, and the Green Bond Standard. These affect not only financial market actors but also multinational companies and, indirectly, small and medium-sized enterprises in the real economy. The Wuppertal Institute supports this process in its role as an impact-oriented think tank. It examines sustainability criteria and quantifies the impact of financial products, investments, and business strategies – especially with regard to the Paris climate goals. The focus is on the transformation of the "grey" economy, i.e. on changing from conventional production methods and markets towards a climate-friendly, ecologically compatible, and socially equitable way of doing business.

28 per cent of resource consumption and 17 per cent of greenhouse gas emissions can be attributed to Europe's food industry. Changing dietary habits, such as increasing out-of-home catering and industrial manufacturing, provide a challenging starting point for sustainable change. The Wuppertal Institute provides the basis for a transformation in the food industry with comprehensive analyses of food production and processing along the various links of the supply chain and by identifying central ecological and social challenges.

Markus Kühlert can be contacted regarding sustainability at companies and Dr. Henning Wilts for questions relating to the circular economy.