4.2 Different avenues to success Selecting the best pathway towards growing a successful green business requires a clear understanding of the strategic play and an accurate assessment of the company’s starting point. It depends on factors such as target customer segment, distinctiveness of the value proposition and potential to scale up. Companies that thoroughly evaluate these elements will be well-positioned to select the most appropriate avenue for the opportunity at hand. Some promising routes to scale up green businesses include growing organically, through mergers and acquisitions, or through partnerships. This section explores each route in more detail, illustrated by case studies. Organic growth While the development of green businesses often requires new skills and expertise, it is also true that many companies have valuable existing assets and capabilities that could be leveraged for an organic green market opportunity. These could include intellectual property, installed infrastructure, R&D prowess and partnerships. The critical point is to recognise whether what a company already has is strong enough to grant real access to a new green market – and the inherent right to win over time. CASE STUDY 10 Bayer drives organic growth through agricultural R&D-led innovation ORGANIC GROWTH For Bayer – one of the world’s largest agricultural companies – climate change is already reshaping its core markets, making innovation not optional but existential. New seeds, for example, can take over 10 years to develop, meaning today’s R&D must anticipate the climate conditions a decade from now. Bayer invests over €2 billion annually in agricultural R&D, significantly more than competitors, and now benefits from a steady pipeline of innovations. These include: short-statured corn, developed to increase resilience to drought and reduce lodging (bending or collapsing) from extreme winds; gene-editing to reduce pesticide volumes and make plants more resilient; and direct-seeded rice, which cuts methane emissions, reduces water use by almost half and allows double cropping. Farmers benefit from higher yields and reduced input costs, while food systems gain from improved soil and water management. R&D budgets are the true sustainability reports. If your R&D budget is not aligned with your sustainability goals, then the rest is noise. Go with the R&D budget to understand the future of the company. Matthias Berninger, SVP Public Affairs, Science and Sustainability, Bayer Sources: Executive leadership interview with Bayer. CASE STUDY 11 Schneider Electric scales up energy management solutions through organic growth investments ORGANIC GROWTH Developing and scaling-up digital energy management solutions is core to Schneider Electric’s strategic growth plans. To achieve this, the company leveraged decades of operational technology (OT) expertise and millions in R&D investments to develop “EcoStruxure”, a platform for real- time energy monitoring and control that is now a cornerstone of its organic growth. By combining OT with advanced IT (e.g. cloud computing, analytics, cybersecurity, IoT), this open and interoperable platform can scale up across geographies and industries, enabling the company to expand adoption in energy- intensive sectors worldwide. The platform has reinforced the company’s competitiveness through a differentiated, software- centric model and generated recurring revenue streams. Sources: Executive leadership interview with Schneider Electric. Already a Multi-Trillion-Dollar Market: CEO Guide to Growth in the Green Economy 38

Already a Multi-Trillion-Dollar Market 2025