The real challenge is how companies respond to rules and regs, says leading innovation strategist Barbara Salopek.
Sustainability regulations often arrive with a familiar chorus from business leaders: more reporting, more paperwork, more rules that take time away from actually running the business.
For many organisations, new environmental requirements feel like yet another burden added on top of already stretched resources. The instinct is to see them as hurdles that slow things down.
Yet something interesting happens when we examine companies that genuinely excel in innovation and long-term performance.
Many of them do not treat sustainability regulations as a barrier at all. Instead, they use regulations as a strategic trigger that sharpens their focus, accelerates their innovation process, and creates competitive advantage.
So, are sustainability regulations really a threat to innovation? Or are they the spark that pushes organisations to think bigger and act smarter?
The challenge is not the regulations themselves. The real challenge is the gap between what regulations require and how organisations respond.Many businesses still operate with short-term thinking and siloed structures. Sustainability becomes a compliance task rather than a strategic lens.
Teams scramble to gather data for reporting, but they never tap into the transformative potential that sits behind the numbers. Regulations feel overwhelming because the organisation is not set up to handle complexity, learn quickly, or innovate with intention.
This leads to three common problems.
Innovation becomes reactive
Companies rush to meet minimum requirements instead of exploring opportunities. This limits creativity and reduces sustainability to a checklist exercise.
Internal resistance increases
Employees often see sustainability as an “add on” to their busy schedules. Without psychological safety and clarity, they stick to old habits and avoid taking risks.
Leaders underestimate the opportunity
Regulations are often viewed through the lens of cost and obligation instead of strategic differentiation.
The result is frustration on all sides. Sustainability feels heavy, and innovation stalls.
To shift this mindset, we must understand what sustainability regulations actually do inside organisations. They introduce clear constraints. And constraints, when understood correctly, are one of the most powerful engines of creativity.
This is not only theory. It is grounded in decades of research in innovation, and it mirrors what I see in real organisations across Europe. Constraints force teams to think differently. They limit the easy choices and compel companies to search for new pathways. When used strategically, constraints can steer organisations away from old routines and toward more inventive solutions.
The leaders who excel in sustainability innovation do three things differently.
First, they connect sustainability to the organisation’s purpose and innovation strategy.
Instead of viewing regulations as rules, they see them as early signals about the future of their market. Regulations tell us what societies value and where industries are heading. Leaders who recognise this use regulations as strategic foresight.
Second, they invest in the innovation culture.
This includes psychological safety, diversity of thinking, and experimentation. Without these cultural foundations, no regulation will produce innovation. With them, regulations become a powerful source of focus and direction.
Third, they develop the capacity to work across individual, group, and organisational levels.
Innovation does not happen in one place. It is shaped by individual habits, group dynamics, and organisational structures. Sustainability regulations influence all three levels, which is why they can be such a strong catalyst when leaders embrace the full system.
When people understand the purpose behind sustainability, when they feel safe to question and experiment, and when structures support learning instead of punishing deviation, regulations become a forcing function for better ideas, better processes, and better results.
So how can organisations turn sustainability regulations into a catalyst for innovation rather than a barrier?
Here are four practical strategies:
Translate regulations into strategic questions.
Instead of asking, “What must we do to comply,” ask: “What opportunities does this open for new services, better processes, or new customer segments?” These questions shift the mindset from compliance to exploration.
Build innovation capacity, not just reporting capacity.
Compliance requires data. Innovation requires creativity, curiosity, and collaboration.
Strengthen the behaviours that drive innovation: questioning, observing, experimenting, and working across diverse perspectives.
Strengthen psychological safety.
Teams need space to challenge old assumptions without fear. Sustainability challenges how things have always been done. If people do not feel safe speaking up, innovation will fail before it starts.
View sustainability as a long-term capability.
Regulations will not decrease. If anything, they will intensify. Treat them as part of your long-term competitive advantage. The companies that win the future are already investing in skills, systems, and cultures that integrate sustainability into their innovation engines.
Sustainability regulations can feel heavy, especially for companies that see innovation as something abstract or optional. But when leaders use regulations as a framing device for strategic development, they create clarity, direction, and urgency. These are the very conditions innovation needs.
Regulations do not stop innovation. They force it. They create constraints that sharpen creativity. They push organisations to align purpose, culture, and process. And they help companies build the internal capacity needed to succeed in a world where sustainability is no longer a trend but a foundational expectation.
The question is not whether sustainability regulations are a barrier or a catalyst.
The question is: How will leaders choose to respond?
Barbara Salopek is the author of Future-Fit Innovation (out now), CEO of Vinco Innovation AS, adjunct lecturer at BI Norwegian Business School and an internationally recognised innovation expert.
