Companies around the world, large and small, are responding to global challenges that threaten their business, the environment, and society, by setting bold sustainability goals and targets.
This includes ambitious aims related to ESG, Scope emissions reductions, sustainability certifications, and the UN-SDGs framework, among others. It also includes increasingly important social commitments to the empowerment of women, local community involvement in decision-making, and participation of underrepresented stakeholders.
Given the complexity and interconnectedness of these challenges, companies across industries are also recognizing they cannot meet their sustainability, sourcing, and business goals by going it alone.
Instead, making significant and meaningful progress on more systemic issues — from climate change and human rights — to targeted problems such as local access to the digital economy and innovations in AG or natural resources, requires companies to collaborate and cooperate with a wide range of stakeholders, including other companies.
Pre-Competitive Partnerships Lead to Greater Sustainable Impact and Business Results
It’s easy to acknowledge the need for companies to work with other stakeholders, but what does that mean? What does it look like? And how do companies know which stakeholders they should partner with?
The answers to these questions depend greatly on the problem you’re trying to solve and who needs to be on board to help solve it.
We write a lot about cross-sector or private-public partnerships, which unite companies in collaboration with donors, civil society, foundations, and others, to take on shared challenges and pursue aligned opportunity.
But sometimes, what’s especially needed is for peer companies to come together to address a problem side-by-side.
Pre-competitive partnerships have emerged as a powerful collaboration model for forward-thinking companies looking to address systemic challenges.
So, what is pre-competitive collaboration? Pre-competitive collaboration involves two or more companies operating within the same industry, coming together to address a shared problem or pain point that doesn’t impact direct business competition or contribute to unfair advantage. Such partnerships can also be between companies sharing a supply chain ecosystem (e.g., companies that source from the same regions, farmers, or factories, or that hire from shared labor pools).
Pre-Competitive Collaboration for Corporate Sustainability Goals
There are times when competition between private sector companies drives innovation; other times, it creates redundancies or inefficiencies.
Pre-competitive partnerships work exceptionally well when focused on addressing a shared social impact or sustainability challenge like human rights or water allocation—or when companies hope to advance systemic change.
Here, pre-competitive partnerships offer corporate sustainability teams a chance to collaborate with competitors and peers, collectively pooling and channeling resources, expertise, and information to coordinate and scale more impactful solutions that help each partner better meet their business and sustainability goals.
Let’s examine sustainability in the food and beverage sector, for example. Here, we benefit from greater collaboration between companies for several reasons:
- Data and knowledge sharing expedites experimentation, helping companies better determine what works in climate change adaptation across agricultural inputs across the supply chain, for example, one of the most pressing and complex sustainability challenges in the industry.
- Taking a systems approach breaks down false silos around individual supply chains, allowing companies to recognize overlapping interests and get to solutions more efficiently that deliver sustainable impact.
- Setting clear standards across an industry makes it easier to regulate practices that can be harmful to people and environments.
- When cohesion is possible, companies can work together in partnership or as part of collaborative associations to influence other suppliers to make changes or innovate as well, ensuring sustainable impact across the entire supply chain ecosystem.
- Working collaboratively helps companies champion innovation, processes, and even policy solutions that emerge through these partnerships that are industry or sector-specific best practices to larger governing bodies, certification programs, and institutions.
How Are Pre-Competitive Partnerships Structured?
Pre-competitive partnership models typically form via two avenues:
1. Advocacy Based
Companies can join or create consortiums within industries that work on specific challenge areas like human rights, reducing plastics, or water availability. Action from these groups often focuses on lobbying for policy change, hiring research institutions to delve deep into shared challenges, and/or convening to share insights or make public commitments to increase awareness and accountability.
The Platform for Accelerating the Circular Economy (PACE) is one model for how companies—including competitors—have joined forces for deep collaboration and partnership to transform global systems for electronics, plastics, capital equipment, textiles, and food.
2. Project Based
Some companies may supplement advocacy efforts with more project-based models. The action from these efforts focuses on mobilizing resources on the ground within a specific region or sector. At Resonance, we work with companies to help them activate their sustainability goals through contextualized partnerships.
By establishing projects within a specific supply chain or region, company partners can solve specific shared challenges, test new solutions or approaches, and also drive concrete action to further bigger-picture goals.
Pre-Competitive Collaborations Have Enduring Capacity-Building Value.
Although the primary goal of pre-competitive collaboration is to develop and implement solutions, the process of collaboration itself has tremendous long-term value beyond the immediate challenge.
Projects often become relationship-building conduits, enabling colleagues from across the industry to develop closer working relationships that may prove valuable down the road when new challenges arise.
This kind of capacity-building often results when collaborating companies recognize that the convergence of diverse company-level perspectives, capabilities, and approaches may be even more enhanced through additional partnerships or even expansion of an existing partnership to include new partners and stakeholders.
Moving Forward With Pre-Competitive Partnerships
When it comes to achieving sustainability and business goals, there is no “one-size-fits-all” partnership model; only what’s best for your specific challenge and context. Before jumping into a consortium or building out regionally-specific projects with another company, it’s important to evaluate if this partnership model is right for your business.
If you're ready to engage in a pre-competitive partnership, ask yourself these three key questions to determine when pre-competitive collaboration is right for your company.