While Swedish companies are environmental leaders, the next challenge is to harness Swedish innovation to tackle the global social and development aspects of sustainability
By 2050, Sweden will have a sustainable and resource-efficient energy supply and no net emissions of greenhouse gases in the atmosphere. In a country where this is the government vision, business is widely seen as the means to make it happen.
This “can do” mentality has spawned a culture of innovation: Sweden is a nation of technology optimists. Innovation and cutting-edge design are part of the Scandinavian DNA. Among the notable industry sectors are cleantech, information and communications technology (ICT), life sciences, automotive and materials sciences. Healthcare and forestry are also significant employers.
This Swedish emphasis on innovation was recently showcased at the Shanghai World Expo 2010. Here, the Swedish pavilion, conceived by sustainable engineering and design company Sweco, focused on three keywords – innovation, sustainability, and communication – and a single unifying theme “Sweden – Spirit of Innovation”.
With a strong tradition of functionality, simplicity and engineering, Swedish companies have embraced the challenge of innovating for the environment. In terms of energy efficiency, for example, industrial engineering company Atlas Copco was the first to offer certified “net zero energy consumption” compressors under its Carbon Zero range. The built-in energy recovery system allows 100% of the electrical power input to be recovered in the form of hot water – useful for water-intensive industries such as the food and drink, pulp and paper or dairy sectors.
Consumer goods giant Electrolux, meanwhile, has taken recycling into new territory with its five “reincarnated plastic” prototype Vac from the Sea vacuum cleaners, made from plastic harvested from five of the world’s marine environments. Using the same core structure as the Electrolux Ultra One Green model, these prototypes are intended to raise awareness about the paradox of excessive plastic waste in the oceans and shortage of recycled plastic on land.
An incubator for cleantech
Not surprisingly, the Swedish love affairs with innovation and the environment manifest themselves in a thriving cleantech sector.
Both government and private venture capital are behind this sector’s success. This year Swedish state pension fund AP7 – with about 100bn kronor (€10.7bn) under management – announced its intention to triple investment in renewable energy over the next two years to 3bn kronor (€320m), in anticipation of people switching to cleaner technologies.
In September 2010, Stockholm – chosen as the first Green Capital in Europe for its efforts on noise pollution, clean water, waste systems and urban green areas – held Cleantech Venture Day. Organised by Kista Science City, Stockholm Innovation & Growth and KIC InnoEnergy and billed as Scandinavia’s largest cleantech investment event, it was intended to bring together investors and innovators/entrepreneurs within the primarily small and medium-sized enterprise-led cleantech sector. Among the promising up-and-coming offerings were HiNation‘s mobile solar products for portable energy and Solvatten‘s solar safe water system.
HiNation’s concept – judged best business idea by the Stockholm Chamber of Commerce in October 2010 – is a fittingly iconic product to come out of the land of the midnight sun, although its application is truly global. HiLight is a ROHS-compliant solar-powered combined lamp and charger that can produce 20 hours of light or three mobile phone charges from 10 hours of sunlight.
With 25% of the world’s population lacking access to electricity, yet over 500 million mobile phone users in Africa alone, HiNation plans to give customers in emerging markets across Africa, Asia and Central America a safe, accessible and environmentally friendly alternative by which to study, work and remain connected. Enter cleantech with a social face.
Safe water
The social value dimension of emerging Swedish cleantech is also evident in Solvatten, a container that cleans contaminated water in a couple of hours using heat, UV and a built-in filter. The rationale for Solvatten is compelling: by removing the need for women and young girls in developing countries to spend several hours collecting firewood to make water safe, the product makes more time available for productive pursuits, helping raise living standards and make local communities more sustainable. It tackles head-on at least five of the Millennium Development Goals.
Sweden was the first country with a co-ordinated function for corporate social responsibility within government. Catharina Kipp is currently CSR ambassador at the ministry of foreign affairs international trade policy department, where she heads the Swedish Partnership for Global Responsibility. Created in 2002 after the World Summit on Sustainable Development in Johannesburg, South Africa, this group aims to spur Swedish companies’ work on labour conditions, human rights, anti-corruption and environment.
Kipp says: “It’s no longer a question of whether to work with corporate responsibility, but how to do it. It’s a matter of minimising the negative impact that a company can have on the environment and people. Many Swedish companies are at the forefront in this regard.”
Sweden currently has 110 UN Global Compact signatories – 25 of these since 2005. In general, the concept of corporate responsibility is well established in mainstream Swedish business. A 2007 survey of 100 large corporations by Swedish business magazine Veckans Affärer found that 88% of companies had increased their work with CR issues, in particular in the areas of climate and environment (81%) and being a good employer (78%).
The Swedish appetite for systemic approaches to CR has led to significant uptake of management system standards such as ISO 14001. Calculating environmental impact and tracking performance are Swedish strengths. Companies in strongly risk-based sectors have demonstrated particularly good performance here, including airliner SAS, and forestry and manufacturing companies such as Scania, Volvo, Electrolux, Atlas Copco, SKF and Sandvik.
But as companies increasingly shift production outside Sweden, they are confronting labour and market conditions outside their Swedish comfort zone. Growth in the uptake of the UN Global Compact is one indicator of the trend for Swedish companies to develop universal or group-wide approaches and standards.
The country recently played a leading role in the development of the new ISO 26000 guidance on social responsibility standards. Together with ABNT, the Brazilian Association of Technical Standards, the Swedish Standards Institute (SIS) provided joint leadership of the ISO working group on social responsibility.
Published in November 2010, the new voluntary guidance applies to all types of organisations. Although it cannot be third party certified and is not a management system standard, it seeks to promote common terminology and bring consistency to operationalising social responsibility, identifying and engaging with stakeholders, and enhancing the credibility of reports and social responsibility claims.
Restructuring by consensus
Dealing with the socio-economic impacts of restructuring has largely been a success story for Swedish companies. Thanks to good relations with unions, a practical, transparent and inclusive approach prevails. As a result, few moves have resulted in the kind of worker dissent experienced in Germany or France, and the more proactive companies have developed systems to ensure local communities continue to thrive, in spite of losing a major employer.
In Västervik, for example, Electrolux individually tailored employment opportunities for staff when the vacuum cleaner factory closed down. A two-year project was launched to help the 511 employees find work. Electrolux donated its factory facility and invested 20m kronor (€2.1m) into growing the regional economy and in Forward Västervik!, a development company jointly owned by government and business. The outcome was that a 2009 Confederation of Swedish Enterprise regional ranking of economic viability rated Västervik 92nd out of 290 communities in Sweden – compared to 242nd place in 2004.
A collaborative approach is common in Swedish responsible business initiatives. Volvo and Tetra Pak have joined WWF Climate Savers on carbon reduction; Ikea and H&M have worked with Unicef on supply chain issues; and Ericsson has partnered with the Red Cross on disaster relief through Ericsson Response.
Partnership at regional level has recently seen Nordic environment ministers agree to integrate climate aspects as a criterion for using the Nordic Ecolabel – the Swan. The ministers have also agreed to develop joint action to protect people and the environment against endocrine disrupters and chemical cocktail effects, and to jointly strengthen dialogue on a green economy with developing countries, in preparation for the World Summit on Sustainable Development in Rio de Janeiro in 2012.
On the European front, having banned the use of mercury domestically, Sweden is trying to push for EU leadership on the global mercury convention negotiations that began in Stockholm in June.
Partnership will certainly be needed where the Baltic Ecoregion is concerned. One of the world’s most trafficked bodies of water and Sweden’s aquatic lifeline, it is also one of the world’s most threatened environments. Overfishing, oil spills and land-based, nutrient-rich pollution from agriculture and industry continue to negatively impact this fragile zone.
Industrial interest in the Baltic is growing too – Russian/European consortium Nord Stream has lobbied intensively for permission to lay a pipeline along the Swedish coastline. It gained consent in 2009, but debate remains on how the area could be affected. With shipping expected to double in the next 20 years, tourism growing exponentially, and the fishing industry struggling to rejuvenate critically low stocks, expect sparks as sectoral and national interests collide.
Signs of progress include ferry and cruise shipping companies Viking Lines and Silja Lines signing a WWF moratorium in 2007 to stop off shore waste dumping and bank SEB’s Baltic Sea fund, which funds Baltic projects through WWF.
The Achilles heel
If Swedish companies have a corporate responsibility weakness, it might be in the area of philanthropy – a possible contributor to only four Swedish companies making it into the DJSI World index in 2010 – down from six in 2005.
Diversity, too, in both ethnicity and gender, is a recognised challenge in senior managerial and board positions. Currently, among companies listed on the Swedish stock exchange, 21% of board members are women. Among state-owned companies, it is 49%. In a market-friendly move to increase gender diversity, the Swedish prime minister, Fredrik Reinfeldt, recently suggested providing tax incentives to those companies willing to break that trend.
Integration of ethnic and cultural diversity is another story, as highlighted by former leader of Sweden’s political opposition Mona Sahlin when she commented that the country has some of the highest qualified taxi drivers around.
Sweden is highly homogenous, yet immigrant populations have increased exponentially in the past 20 years. Today, 13% of the population is of non-Nordic origin, primarily consisting of Iraqis, Yugoslavs and Poles, yet this is not reflected in corporate hierarchies.
Manpower, Sweden’s 10th largest employer in 2009, has identified diversity as one of its global focus areas. It launched a well-received and unconventionally direct advertising campaign questioning the Swedish business sector’s ability to recognise talent among the over-35s, women and immigrants – marking a rare effort by a company to address an issue that most Swedish businesses prefer to keep behind closed doors. Ericsson, for its part, has tried to tackle the issue by encouraging non-Swedes into senior management positions.
Overall, though, the Swedish approach to CSR could be summed up by that uniquely Swedish word “lagom” – which has no real equivalent in English, but means something like “just the right amount”. That’s not to say that Sweden has reached the end of the responsible business road – there are still many issues to be tackled – but that it is proceeding in the right direction.
Andrea Spencer-Cooke has been involved in sustainable business thinking and practice since the early 1990s. She is the former editor of Stockholm-based magazine Tomorrow: Global Sustainable Business.
Sustainable fashion in Sweden – exploring the oxymoron
By April Streeter
Sweden’s reputation as a leader in design and sustainability means it’s no surprise the country is leading the way in sustainable fashion.
The good name is for good reason. Sweden is home to the Sustainable Fashion Academy (SFA), which has put more than 75 fashion professionals, including from companies such as Ikea, H&M, and tiny labels such as Nudie Jeans, through the fundamentals of systematically integrating sustainability into brands.
“Sweden in general has been at the forefront of the social side of sustainability, though as a whole Swedish fashion has not understood its environmental impacts,” says SFA’s founder, Michael Shragger. Like the famously shy Ikea, Swedish fashion brand managers see sustainability positioning as leaving their brands open to criticism, Shragger says. Often, they do far more than they publicise. In an industry made up mainly of small and medium-sized firms, moreover, there are gaps in systematising sustainability and strategic thinking.
This is epitomised by small fashion house Gudrun Sjöden. The eponymous founder says her company’s efforts to source organic textiles and investigate Tencel/Lyocell cellulose fibre fabric to produce beautiful classics are among the country’s best sustainable fashion examples. Sjöden claims 50% of the company’s items are “sustainably produced”. But she doesn’t promote this – in fact it’s company policy not to talk about its “eco” philosophy.
Swedes are good at implementing system-wide change. The Swedish fashion industry is well positioned to combine great, enduring design with the elements of sustainable fashion – sourcing, materials use, and brand positioning.
One of the premier examples is the fast-growing DEM Collective, based in Sweden’s second-largest city Gothenburg. An abbreviation for Don’t Eat Macaroni, the name is an anti-globalisation statement. DEM’s founders Karin Stenmar and Annika Axelsson started by establishing their own factory in Colombo, Sri Lanka, and paying their workers three times the going rate, based on their research into a local liveable wage. They aim for classic pieces – jeans, jackets and t-shirts. With whittled-down margins, they have enough consumer acceptance to now test the high-fashion, 100% organic clothing in the US.
Klättermusen, a young Swedish brand of athletic gear, is combining the Swedish appeal of the great outdoors with commitment to the environment. Their recovery and recycling initiative, Recover, gives consumers up to €20 for returning used gear to their stores.
Better returns
Boomerang, too, has followed suit with its “Boomerang effect”, a consignment return store. Klättermusen is unique among domestic apparel counterparts in assigning an eco-index to each of its products – a number on the label that includes its expected lifetime, sustainability of materials and prospective recyclability.
Unfortunately fashion – with its ephemeral, get-what’s-hot psychology and consumption patterns – conflicts deeply with sustainability goals. Mega-fashion brand H&M knows this. It launched a well-received organic and recycled-material Garden Collection in 2010, and is pushing organic cotton into its basics. But it remains the pinnacle of fast fashion, and new, trendy, throwaway looks. So its missteps – accusations of misidentifying organic cotton items and cutting up unsold merchandise – garner more headlines than its positive moves.
Here is sustainable fashion’s oxymoron. Mathilda Tham, professor of sustainability and fashion at Beckman’s School of Design, predicts a future dual-tack approach combining “fast” fashion with “slow” ideals. Here, truly throwaway fashions – instantly biodegradable dresses, or systems of use, not buy, are the future. To answer the need for novelty, Tham says fashion houses must look at what they are really selling – not a means to stay warm, she says, but a way to constantly recreate an identity.
Tham’s new conception – “meta design” she calls it – sees the psychological elements of fashion merging with open or even crowd-sourced design, and fashion “experiences” taking the place of constant shopping.
Now there’s a trend worth following.
April Streeter is a writer specialising in sustainability since 1998. Formerly based in Sweden, where she covered Scandinavia for Windpower Monthly, she now lives in Portland, Oregon and is a blogger for Tree Hugger and The Huffington Post.
Case study – Ericsson: turning iPhone into wePhone
Usually touted as the latest “must-have” luxury consumer accessory, the mobile phone and the technology behind it also tells another story.
Take Ericsson, the world-leading provider of telecommunications equipment and related services to mobile and fixed network operators globally. More than 1,000 networks in more than 175 countries utilise the company’s network equipment and some 40% of all mobile calls are made through its systems. Founded in 1876 and headquartered in Stockholm, Ericsson has more than 88,000 employees and, in 2008, generated revenue of 209bn kronor (€22.3bn).
The company’s vision is “to be the prime driver in an all-communicating world” through innovation, technology and sustainable business solutions. So far so business-as-usual. But where Ericsson is turning the industry on its head is how it is putting its vision of “communication for all” into practice through the Millennium Villages Project.
Starting from the premise that mobile technology is a key infrastructure that can deliver a number of services reliably and cost effectively in remote areas, in 2007 Ericsson became involved in the Millennium Villages Project, a bold, innovative model for helping rural African communities lift themselves out of extreme poverty.
Launched by Jeffrey Sachs of the Earth Institute, Columbia University, the project uses communication technology to close the digital divide and raise the standard of living by providing access to real-time market information, health services and educational resources.
Ericsson’s engagement in the Millennium Villages Project is a concrete example of the company turning its communication-for-all vision into a market reality. With mobile subscriptions already topping the five billion mark, the company sees great potential for alleviating poverty and improving efficiencies at the base of the economic pyramid.
Elaine Weidman-Grunewald, vice-president for corporate responsibility and sustainability, says: “If you take Africa which has 1-2% internet penetration but mobile penetration of about 40%, it’s clear the mobile phone will be the point of access for crop reports, or weather conditions, or where to sell your fish in the market. As a result, economic conditions are dramatically improving.”
It’s not without its challenges, however, Weidman-Grunewald says. “The first challenge is to create a commercial business case otherwise it won’t scale up or live up to the promise.”
Governments, too, need to play their part by creating an enabling environment with the right legislation to support take-up. And they need to think cross-sectorally. “Industries have typically developed vertically, but by applying technology across sectors such as utilities, healthcare, energy and transport, you get many more benefits.”
Public-private partnerships, then, are essential. But what is remarkable about Ericsson’s efforts is how tackling poverty and creating more sustainable societies is connected to the core business – the company is showing that it really is possible to address the lowest spending segments profitably and achieve sustainability goals with the use of broadband at the same time.
Case study – SCA: a big surprise in the woods
As Europe’s largest private forest owner, it’s understandable SCA was an early adopter of Forest Stewardship Council (FSC) certification.
Formed in 1929 as a forest industry holding company, SCA is a personal care, tissue, packaging and solid wood products company. In 2009, net sales amounted to 111bn kronor (€11.8bn). Its largest markets in terms of sales are Germany, the UK, US, France, Italy and Sweden – but markets such as Argentina are growing rapidly.
SCA has a longstanding commitment to responsible forestry practices. Kersti Strandquist, vice-president for corporate responsibility, explains: “Our sector perceives forests as a resource. It dates back to the 1904 Swedish Sylviculture Act stipulating that forest should be regenerated. About 100 years ago the Swedish forest industry exploited natural resources, but that law helped us become aware that it was a resource that needed regenerating.” Since that time, the volume of standing forest in Sweden has doubled.
SCA was a pioneer of forest certification. The company owns 2.6m hectares of forestland, of which 2m hectares are used for timber production. In January 1999, SCA’s Swedish forests were certified under the FSC scheme. It is now one of the world’s largest suppliers of FSC-certified products, ranging from solid wood and pulp, to toilet paper, kitchen rolls and newsprint.
SCA has also been reducing carbon emissions since the early 1990s. In 2003, SCA launched E-save, a programme consisting of some 1,300 small projects, which together reduce emissions by 240,000 tonnes of carbon a year, saving €63m. Engagement of people on the local level has been key; in some parts of the business, bonuses are linked to energy savings. The company has set an absolute target to reduce carbon emissions by 20% by 2020, based on a 1995 baseline.
In 2010, the annual global Carbon Disclosure Project survey named SCA number one in Sweden – and third in the Nordic region – for greenhouse gas emissions reporting. “We’re very proud of our work to reduce our carbon emissions,” Strandquist says. “With net annual growth of 1% in our forests, we’re able to sequester 2.6m tonnes of CO2 – which is approximately equivalent to how much we generate in our operations, not including suppliers.”
Reducing energy costs – especially in pulp and paper mills – remains in Strandquist’s words “an extreme challenge”. To tackle this, SCA is generating its own electricity using windpower and combined heat and power generation units in its mills. A new unit called SCA Energy has been created to take this aspect of the business forward.
But SCA’s sustainability engagement doesn’t stop at forests. In developing countries, rising incomes and awareness of the health benefits of better hygiene are expanding use of personal care products. Intimate care, however, is often a taboo subject. As one of the world’s largest players in personal care and the global market leader in incontinence care products through its Tena brand, SCA is trying to change such perceptions.
Through social marketing campaigns like its award-winning Libresse Voice Battle in Scandinavia, which engaged young women in expressing views on menstruation, and its Libresse School Program in Russia, which raises awareness around puberty and personal hygiene, the company is increasing consumer access to information and helping to destigmatise conditions such as male incontinence. For SCA, it’s an economic and social win-win: raised awareness means bigger business opportunities – and less unnecessary human suffering.
The writers of the Sweden briefing are part of One Stone. In addition to Stockholm, One Stone’s partners and associates are based in Edinburgh, Sydney, Malta and Portland, Oregon. One Stone has more than two decades’ experience working with multinational companies to guide sustainability leadership strategies and provide focused sustainability communication.