Co-opetition on shared environmental objectives can deliver both socio-environmental value and firm-level economic gains. Unlike traditional sustainability approaches, co-opetition changes the scale and structure of what is possible
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Prof Jako Volschenk
Traditional sustainability strategies such as green differentiation, eco-efficiency, cost savings, often deliver incremental progress. Many of the environmental challenges businesses now face cannot be solved at scale by any single firm. Climate change, waste and biodiversity loss are collective problems embedded in the structure of entire industries. Solving them requires competitors to act together.
In 2023, Unilever handed its competitors the formula for its ice cream. The patents it released allowed freezer temperatures to be raised from −18°C to −12°C, cutting cold-chain energy use by up to 30%. On the surface it looked like corporate generosity. In reality, Unilever had no choice: unless rivals adopted the same standard, retailers could not raise their freezer temperatures — and Unilever’s own emissions and cost savings would never materialise. What looked like altruism was actually competitive logic. It is called co-opetition.
Co-opetition on shared environmental objectives can deliver both socio-environmental value and firm-level economic gains. Unlike traditional sustainability approaches, co-opetition changes the scale and structure of what is possible. It allows firms to pool resources, share risk and coordinate action in ways that individual companies cannot achieve alone, while still retaining competitive advantage.
It generates incentives that curb free-riding and enable credible commitments that single-firm sustainability initiatives cannot match. These co-opetitive sustainability strategies enable shared experimentation, collective learning and coordinated investment in environmental infrastructure. The result is system-level impact including reduced emissions, improved waste recovery and biodiversity protection that benefits society.
Importantly, while these public environmental benefits cannot be captured by any single firm, companies can still internalise value through improved reputation, stronger legitimacy and enhanced credibility in the eyes of consumers, regulators and investors.
Building what no single firm could build alone
South Africa already provides a compelling example of this approach in practice.
The Glass Recycling Company (TGRC), a producer responsibility organisation for glass packaging, brings together manufacturers, producers and retailers in a shared system funded by member contributions. Each member pays a fee per ton of glass placed on the market. Over the past 18 years, TGRC’s initiatives in capacity-building, training, education and awareness have helped increase glass collection rates from 18% to 53%.
The reverse logistics infrastructure required for circular economy initiatives such as packaging recycling is difficult, if not impossible, for one firm to build alone. When structured collectively, competitor involvement enables economies of scale and lowers costs for all participants, while improving environmental outcomes. The lesson: some infrastructure is a shared good that competitors can only build together.
Legitimacy is a collective asset
Trustification is a collective reputational strategy through which competitors coordinate sustainability claims and behaviour to build shared credibility and trust. It relies on benevolence, fairness, transparency and action.
For example, L’OR and Nestlé, while competitors in the coffee capsule market, jointly launched the Aluminium Packaging Alliance in Europe to improve the collection and recycling of small aluminium packaging, addressing concerns about environmental waste.
Eco-labelling and independent certification schemes operate on similar principles. On their own, such labels carry limited credibility. But when endorsed by multiple competitors, they become more legitimate and powerful raising standards across an entire sector rather than differentiating a single firm. A standard backed by one firm is a marketing claim. A standard backed by rivals is a credible commitment.
When green becomes a premium
Eco-branding emerges where competitors collectively differentiate a category based on environmental performance, enabling firms to command a price premium. Unlike trustification, which pushes laggards towards minimum standards, eco-branding pulls progressive firms towards market leadership.
A group of South African fruit farmers, for example, has collaborated to achieve organic certification by sharing farming and marketing practices. In some cases, differing export markets allow such collaborations to persist without undermining competitive positioning. Eco-branding depends on rivals co-creating reputational assets that amplify perceived credibility — spillovers that no single firm can generate alone.
The lowest footprint at the lowest cost
Environmental cost leadership emerges when co-opetition enables firms to deliver lower environmental impact at lower cost and pass those savings on to customers to gain market share or volume.
In some sectors, such as electric vehicles, cost reductions over the product life cycle are increasingly tied to collaborative innovation ecosystems rather than individual firm efforts. By drawing on complementary competencies, co-opeting firms can accelerate development of cheaper and more environmentally superior products, competing on the benefits of the environmental advance rather than its cost.
Rewriting the rules while still playing the game
Unilever’s decision to share its ice-cream patents with rivals was not a moment of corporate virtue. It was a recognition that some problems are bigger than competition and that the only way to solve them is to rewrite the rules of the game while still playing it.
For executives and policymakers, the implication is practical: not every environmental challenge belongs in a competitive frame. Where infrastructure is indivisible, where legitimacy is shared, where no single firm can move the market alone, the question is not whether to collaborate with rivals, but how.
Environmental co-opetition may be one of the few viable pathways to address complex challenges such as climate change and biodiversity loss at the required scale. The firms that figure out where to compete and where to co-operate will be the ones that matter to their shareholders and to the planet.
Prof Jako Volschenk is an associate professor of strategy and sustainability ay Stellenbosch Business School.
Image: Supplied
* Prof Jako Volschenk is an associate professor of strategy and sustainability ay Stellenbosch Business School.
** The views expressed do not necessarily reflect the views of IOL or Independent Media.
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