Sustainability – The Winning Strategy

Sweden is a global leader in sustainability, and this is reflected in its business culture. Swedish businesses are increasingly focused on sustainability, both for environmental and economic reasons. This focus on sustainability is driven by several factors, including the Swedish Business Perspective on Sustainability.

Sustainability – the Winning Strategy

Sustainability as a Business Imperative: Swedish companies increasingly view sustainability as a business imperative, aligning with their goals, values, and competitiveness.

Strong Integration: Sustainability is deeply integrated into various aspects of Swedish business operations, including strategy, governance, communication, and supply chains.

Environmental Focus: Environmental issues are the primary area of focus for Swedish companies, followed by labor rights and human rights.

Drivers of Sustainability: Key drivers for future sustainability efforts include customer demand, EU regulations, and investor pressure.

Impact of Recent Crises: While some companies experienced lower prioritization of sustainability due to recent crises (e.g., COVID-19, energy crisis), many, particularly larger companies, increased their focus, recognizing the interconnectedness of global challenges.

Darinka Georgieva, Executive Director at UN Global Compact Network Bulgaria, emphasizes the shared challenges and opportunities facing European companies, including the increasing environmental and social pressures. These challenges include biodiversity loss, pollution, overconsumption, and social inequalities exacerbated by factors like polarization and threats to democracy. The UN Global Compact, recognized as the world’s largest corporate sustainability initiative, plays a crucial role in this endeavor. It provides a platform for companies to commit to ten universally accepted principles in the areas of human rights, labor, environment, and anti-corruption. She highlights the Global Compact’s ambitious goals and its role in supporting companies in their transition to sustainable business models. She emphasizes the importance of collaboration and knowledge sharing among companies and across borders. The decision to focus on Sweden is based on the country’s recognized leadership in sustainable development, as evidenced by the GlobScan report. The Swedish Global Compact Network, with its significant membership and active engagement, provides a valuable model for other countries.

Volvo’s Sustainability Journey:

• Decarbonization Goals: Volvo aims to be 100% safe, 100% fossil-free, and 100% productive.
• Focus Areas:
  • Downstream (Product Usage): Electrification is key, with a focus on battery-electric, fuel cell-electric, and alternative fuel vehicles.   
  • Upstream (Supply Chain): Decarbonizing materials like steel, aluminum, and plastics through sustainable sourcing and collaboration with suppliers.  
  • Own Operations: Improving energy efficiency and transitioning to renewable energy sources.
• Challenges: 
  • Cost Competitiveness: Electric vehicles currently have higher operating costs compared to diesel.
  • Charging Infrastructure: Limited public charging infrastructure for trucks hinders widespread adoption.
  • Renewable Energy Access: Ensuring access to sufficient renewable energy for charging electric vehicles.

Partnerships for Success:

• Volvo emphasizes the importance of collaboration to overcome these challenges.
• Key partnerships include: 

• SSAB: This partnership focuses on developing and commercializing the world’s first vehicles made with fossil-free steel. (1) 
• Ovako: Another collaboration aimed at producing fossil-free steel for use in Volvo Group vehicles.(2)  
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• Clean Energy Partnership: This industry partnership focuses on establishing green mobility with hydrogen and fuel cells.(3)  
• BASF: This partnership aims to develop low-carbon materials, such as recycled plastics.(4)  

Key Findings from a Swedish Business Survey

Vide Richer, Head of Strategic Engagement & Partnerships, UN Global Compact Sweden, breaks down a survey made in Sweden in the following categories:

• Sustainability as a Business Driver: Swedish companies increasingly recognize sustainability not just as a social responsibility, but as a crucial factor for business success.
• High Level of Integration: Sustainability is deeply integrated into the core strategies and operations of many Swedish companies, with a strong focus on environmental protection and social responsibility.
• Driving Forces: Customer demand, stringent EU regulations, and investor pressure are major factors driving companies to prioritize sustainability.
• Impact of Global Crises: While some companies experienced disruptions, many viewed crises as a catalyst for increased sustainability efforts, recognizing the interconnectedness of environmental, social, and economic factors.

Implications for Business Partnership

To successfully partner with Swedish businesses, companies must demonstrate a strong commitment to sustainability. This requires:

• Developing and implementing robust sustainability strategies: Aligning sustainability goals with overall business objectives.
• Collecting and reporting on environmental data: Tracking and transparently communicating environmental performance.
• Addressing social and ethical concerns: Ensuring responsible business practices throughout the supply chain, including respect for human rights and labor standards.

By embracing sustainability as a core business principle, companies can enhance their competitiveness, build stronger relationships with customers and stakeholders, and contribute to a more sustainable future.

The Swedish Model

Sweden is recognized as a leader in sustainability, driven by strict environmental regulations, consumer demand, government support, and a culture of innovation. This fosters a strong focus on the “triple bottom line” of environmental protection, economic growth, and social equity.

Examples

• Volvo Group: Emphasizes a “100% safe, 100% fossil-free, 100% more productive” approach, focusing on electrification, decarbonizing the supply chain, and fostering partnerships with suppliers and competitors.
• UN Global Compact Sweden: Promotes responsible business practices through the 10 Principles and supports companies in aligning with the Sustainable Development Goals.

Conclusion

The Swedish business perspective on sustainability highlights its importance as a business strategy, not just a compliance issue. Companies that embrace sustainability are better positioned for long-term success in the global market.