Sustainable innovators need room to scale

New research reveals a thriving cohort of sustainable innovators across Aotearoa New Zealand. They are ambitious, confident and solving real problems, but they are running into roadblocks. That has implications for directors. 
 
The Next Wave Report 2026, produced by the Sustainable Business Network (SBN) and Te Whare Wānanga o Waitaha | University of Canterbury, is an annual barometer of Aotearoa New Zealand’s sustainable innovation sector. It surveyed 42 purpose-driven businesses, all finalists in the 2025 Sustainable Business Awards for disruptive innovation. They span clean tech, circular economy, regenerative food systems, energy and more. 
 
The key finding is that confidence is high, but the conditions to scale are not there yet. 
 
Two-thirds of respondents are confident about their growth prospects. Yet half say access to funding is difficult. Only 18% think the policy environment supports them. The share achieving strong profit margins has dropped sharply, from 17% to 3% in a single year. 
 
There is a remarkable cohort of businesses here that go beyond brilliant thinking. They are putting ideas into practice, building solutions, proving models and pointing the way towards a more regenerative, circular economy. The question is whether our financial systems, our procurement decisions, our policy settings and our collective will can align fast enough to help them succeed at scale. 
 
Sustainable innovators are part of the supply chains, investment portfolios, procurement decisions and talent pipelines of larger organisations. The choices boards make either accelerate or constrain them. 

Four challenges are particularly relevant to directors:

1. Capital structures that do not fit 

The biggest barrier to securing finance is not a lack of investable ideas. It is a mismatch between how money is structured and how sustainable innovation actually works. The most frequently cited obstacle is short investment time horizons that do not fit sustainability timelines. Lack of collateral came second. 
 
Half of respondents said they would likely apply for longer-term or revenue-linked finance if it were available. Their primary motivation is the ability to scale sustainably, not just grow fast. 
 
Investment committees and boards overseeing capital allocation should take note. The businesses most likely to deliver long-term value, including resilient supply chains and reduced transition risk, may be the ones current capital structures are least designed to support. 
 
2. Demand is growing, but awareness is not 

Demand for sustainable products and services increased slightly in 2025, but customer awareness fell. The proportion of customers reporting high awareness dropped from 31% to 14% in a single year. 
 
Growth is being driven by existing, values-aligned customers. The broader market has not followed yet. 
 
Boards in consumer-facing organisations can ask whether procurement reflects where the market is going. Buying decisions by large organisations signal to markets. They also provide the revenue stability that helps innovators scale. 
 
3. Policy instability raises strategic risk
 
The report found 55% of respondents rated the regulatory environment as unstable. Only 8% found it stable and predictable. 
 
That level of uncertainty affects planning horizons, investment decisions and risk appetite. This is a governance issue. Strategy built on assumptions about policy settings needs to account for that instability. It also raises the question of advocacy: are your organisation’s submissions, industry association memberships and public positions contributing to a more stable and enabling environment, or undermining one? 
 
4. Scaling is harder than starting 

The 2025 cohort shows a polarised picture. More organisations are at very early revenue stages. More are also reaching revenue of more than $10 million, but the middle has thinned out. 
 
Getting to break-even is more common than it was. Getting to strong profitability is rarer. The sector is stretching at both ends. Scaling, not starting, has become the critical challenge. 
 
Organisations that want to work with sustainable innovators as partners, suppliers or portfolio companies need to understand whether those businesses have the conditions, networks and capital to make the jump from proving a model to operating at scale. 

Opportunities  

The report identifies four opportunities to accelerate sustainable innovation in Aotearoa New Zealand. Each raises a practical board question:

• • Unlock fit-for-purpose finance: Review how your organisation's capital is deployed. Does your investment committee consider patient capital or blended finance structures that match longer innovation timelines?
  • Push for policy stability: Engage actively through industry channels for clear, long-term policy signals on emissions, procurement standards and circular economy frameworks.
  • Build procurement pipelines with innovators: Connect your supply chain and procurement teams with innovators earlier. Contracts from larger organisations are often the validation that unlocks the next round of finance.
  • Strengthen capability partnerships: Consider whether your organisation can offer expertise, networks or infrastructure access that helps promising businesses scale.

The businesses in this report are already building solutions to some of the country’s hardest problems, from agricultural emissions to construction waste to energy access in rural communities. What they need is for the broader business ecosystem to move with them. 
 
Connecting these businesses to flexible capital, to the right networks, to customers ready to make the switch – that is the work of today.  
 
The transition from extractive to regenerative is not a distant goal. It is already under way, led by committed visionaries running the businesses in this report. They just need the rest of the aligned ecosystem to link arms and catch up. 
 
Boards are part of that ecosystem. The findings in this report are a useful reminder to ask what role your board is playing.