Collaborating with competitors to advance sustainability

Sustainability challenges are among the most complex and difficult problems facing businesses today. These challenges involve many actors and interests and overlapping concerns, and addressing them requires significant investments and out-of-the-box thinking. Issues such as safety, supplier compliance, and product stewardship have something else in common—they matter to the entire industry, not just one firm.

As a result, businesses working on these issues increasingly find themselves doing something they never thought they would: working with competitors. This report provides research-based advice for creating successful competitor collaborations for sustainability.

Competitors come together to:
• reduce reputational risks that threaten an entire industry
• support new technology development by sharing uncertain returns and pooling knowledge
• develop shared standards for businesses within an industry
• communicate effectively with regulators on public policy

The competitor collaborations we discuss in this guide have two key characteristics:
• They include direct competitors that sell similar products and services.
• They address a sustainability issue, such as climate change adaptation for coffee farmers, worker and community health and safety, hazardous chemical discharge, or the market for sustainable products.

Often competitor collaborations include other stakeholders such as nongovernmental organizations (NGOs) and government (see NBS guide on multi-sector partnerships for more information on cross-sector collaborations). This report specifically looks at collaborations involving direct competitors. Despite their increasing popularity and success, competitor collaborations are not easy to form or to sustain.

Businesses in competitor collaborations face two main tensions:
• They need to balance their interests with those of their competitors. They must place themselves on a continuum from cooperation to competition.
• They need to balance accountability and flexibility. Companies want to maintain some independent decision-making while holding collaborators accountable for delivering on their commitments. They must decide how to structure the collaboration on the continuum of informal to formal structure. How businesses view these tensions shapes the kind of competitor collaborations they will seek.