HBR On Strategy: Episode Summary – "Sustainability Is Fueling Innovation at Ferrari"

Release Date: June 11, 2025

In this insightful episode of HBR On Strategy, Harvard Business Review delves into Ferrari's ambitious journey towards sustainability under the leadership of CEO Benedetto Vigna. Through an engaging conversation between HBS Professor Rafaela Sedun, Ferrari CEO Benedetto Vigna, and host Brian Kenny, listeners gain a comprehensive understanding of how Ferrari is integrating sustainability into its storied legacy of luxury, performance, and innovation.

1. Ferrari’s Strategic Shift to Carbon Neutrality

Ferrari, a brand historically synonymous with tradition, luxury, and speed, is undergoing a significant transformation aimed at achieving carbon neutrality by 2030. This strategic pivot is fueled by both a moral imperative and a strategic opportunity to innovate.

Benedetto Vigna emphasizes the dual nature of this shift:

“Ferrari is not just making cars anymore; we are making sustainable luxury products that resonate with the evolving values of our customers.”
[02:23]

The introduction of Ferrari's first electric vehicle marks a pivotal moment in the company's evolution, signaling a commitment to integrating sustainability without compromising the brand's core values.

2. Leadership and Organizational Culture at Ferrari

Under Vigna's leadership, Ferrari has cultivated an organizational culture that prioritizes respect, empowerment, and scientific rigor. This culture is pivotal in driving the company's sustainability initiatives and fostering innovation.

Vigna describes the unique environment at Ferrari:

“You have to engage employees in competitions to elicit their ideas, which really made a lasting impression on the team.”
[06:23]

This approach not only empowers employees but also ensures that sustainability initiatives are deeply embedded within the company's operations and culture.

3. Sustainability as a Catalyst for Innovation

Ferrari's commitment to sustainability goes beyond meeting regulatory requirements; it serves as a strategic lever for innovation both internally and across its supply chain.

Vigna highlights the strategic importance of this approach:

“Sustainability can be an engine for innovation internally and drive the transformation of the supply chain.”
[31:02]

By adopting a scientific and holistic approach, Ferrari is able to break down sustainability challenges into manageable segments, fostering continuous improvement and collaboration with suppliers who share the company's vision.

4. Engaging the Supply Chain and Overcoming Challenges

Achieving carbon neutrality requires significant changes not only within Ferrari but also across its extensive supply chain. This involves collaborating closely with suppliers to enhance sustainability practices and innovate collectively.

Leila Dumi, Ferrari's CEO, elaborates on this collaboration:

“We are looking at the logistics and giving priority to companies that are using biofuel to move our cars.”
[20:08]

However, this transition is not without challenges. Many suppliers grapple with understanding and implementing the necessary metrics for sustainability. Despite these hurdles, over 80% of Ferrari’s suppliers are eager to join the sustainability journey, highlighting a strong commitment to collective progress.

5. Balancing Tradition with Modern Sustainability Efforts

Ferrari faces the unique challenge of maintaining its rich heritage while embracing modern sustainability practices. This balance is crucial to preserve the brand's identity while adapting to the evolving market and environmental demands.

Dumi shares her perspective on innovation:

“We have two eyes. With one eye, we look at the past. With another eye, we look at the future.”
[17:58]

This dual focus ensures that Ferrari honors its legacy while innovating for a sustainable future, integrating new technologies and practices that align with the brand's esteemed reputation.

6. Customer Evolution and Brand Enhancement through Sustainability

Ferrari recognizes that its customer base is evolving, particularly with younger generations like millennials who prioritize sustainability and ethical practices. Embracing sustainability not only aligns with these values but also enhances the brand’s appeal to a broader, more diverse audience.

Vigna reflects on the impact of sustainability on customer perception:

“Sustainability can be a catalyst for energy and innovation inside organizations.”
[18:56]

By proactively addressing sustainability, Ferrari positions itself as a forward-thinking brand that resonates with modern consumers' values, thereby strengthening its market position.

7. Scaling Electric Vehicle Production: Opportunities and Obstacles

Scaling the production of electric vehicles (EVs) presents significant challenges, particularly in battery construction and securing raw materials. Ferrari's strategy involves bringing battery construction in-house to ensure quality and integration with its vehicles.

Dumi explains Ferrari's approach to EV production:

“We buy the cell and we make the battery now, because the battery is an integral part of the car.”
[23:17]

This move not only enhances the performance and safety of Ferrari’s EVs but also underscores the company's dedication to sustainability by controlling the entire battery production process.

8. Fostering a Community and Sense of Belonging

Ferrari places immense value on creating a strong sense of community and belonging among its employees and stakeholders. This unified culture is instrumental in navigating challenges and driving the company's sustainability agenda.

Dumi shares an example of this community spirit:

“We have a unique sense of belonging in the company that is not easy to describe. This has enabled us to maintain uninterrupted production even during global disruptions.”
[13:44]

Initiatives like collaborative projects and employee recognition programs reinforce this culture, ensuring that every member is invested in Ferrari's success and sustainability goals.

9. Conclusion: The Worth of Sustainability Integration

As the conversation wraps up, Benedetto Vigna affirms the value of Ferrari's sustainability efforts, underscoring that integrating sustainability into the company's core operations has been immensely worthwhile.

“For me, if in the past, Ferrari had to make cars that were beautiful, high performance, and delivering emotional driving thrills, now we have to add to this ingredient also sustainability. It was really worth it.”
[30:21]

This holistic approach not only secures Ferrari’s legacy but also paves the way for future innovations that align with global sustainability trends.

Key Takeaways

• Strategic Integration of Sustainability: Ferrari's objective to achieve carbon neutrality by 2030 is a strategic move that intertwines sustainability with its core values of luxury and performance.

• Leadership and Culture: Effective leadership and a culture of respect and empowerment are crucial in driving organizational change and innovation.

• Collaborative Supply Chain: Engaging and collaborating with suppliers is essential for implementing widespread sustainability initiatives.

• Balancing Heritage and Innovation: Maintaining the brand's rich heritage while embracing new sustainability practices is key to Ferrari’s sustained success.

• Customer-Centric Sustainability: Understanding and adapting to the evolving values of the customer base, particularly younger generations, enhances brand relevance and appeal.

• Overcoming Production Challenges: Addressing the technical and logistical challenges of scaling EV production is vital for Ferrari’s transition to sustainability.

• Community Building: Fostering a strong sense of community and belonging among employees and stakeholders supports the company's strategic objectives.

• Sustainability as Innovation Driver: Sustainability acts as a catalyst for internal and supply chain innovation, driving continuous improvement and competitive advantage.

Notable Quotes:

• Benedetto Vigna: “Sustainability can be an engine for innovation internally and drive the transformation of the supply chain.”
  [31:02]

• Leila Dumi: “We have two eyes. With one eye, we look at the past. With another eye, we look at the future.”
  [17:58]

• Benedetto Vigna: “We are not making cars; we are making luxury products.”
  [07:49]

This episode provides a compelling case study on how a legendary brand like Ferrari navigates the complexities of integrating sustainability into its business strategy, offering valuable lessons for businesses aiming to balance tradition with innovation.