Photo: Jonatan Stålhös/imagebank.sweden.se
Sustainable business in Sweden
Extensive environmental protection, active measures to respect human rights and improve work environments, and fighting corruption. Many of today’s Swedish companies are at the forefront in integrating a sustainable approach to business in their strategies and daily management.
Leading by example
The term sustainable business is used to describe the work companies do that has a positive impact on society, the environment or the economy. Efforts to reduce emissions of carbon dioxide, promotion of equal career opportunities, and involvement with local communities are examples of sustainable business initiatives.
Swedish companies have a long history of active work in the field and is widely viewed as a pioneer. In the latest the RobecoSAM Country Sustainability Ranking (2019), Sweden was ranked first of 65 countries, based on environmental, social and governance (ESG) indicators.
The environmental aspects of sustainable business are extremely broad, including areas such as paper recycling, the sustainable use of resources, minimising environmental footprints and reducing water consumption.
Cleantech – a term used to describe products or services that improve operational performance, productivity or efficiency while reducing costs, inputs, energy consumption, waste or pollution – is another important part of sustainable business. Internationally, Sweden continues to fare well in energy and environmental technology, coming third in the Global Cleantech Innovation Index 2017, after Denmark and Finland.
Although Sweden generally fares well in international comparisons of gender equality, its construction industry remains a highly male-dominated sector.
Photo: Cecilia Larsson Lantz/imagebank.sweden.se
Gender equality is an important aspect of the way companies work with sustainable business. Companies can promote equality by making it possible for parents to combine work and family, encouraging shared participation in childcare, and giving women and men equal opportunities to rise to leadership positions.
The World Economic Forum’s Global Gender Gap Report assesses and compares national gender gaps based on economic, political, education and health criteria. In the 2020 report, Sweden was ranked fourth of 153 assessed countries, surpassed only by Nordic countries Iceland, Norway and Finland.
Corruption has been identified by the World Bank as one of the greatest threats to growth. Sweden ranked fourth on Transparency International’s Corruption Perceptions Index 2019. The index ranked 180 countries and territories by their ‘perceived levels of public sector corruption, according to experts and business people’.
As of 1 July 2012, Sweden’s legislation categorises the giving or acceptance of bribes as serious crimes. The legislation was largely a result of Sweden adopting anti-corruption conventions in collaboration with the EU, European Council, UN and OECD. Since 1997, the OECD has had a convention prohibiting the bribery of overseas public servants in international business relationships; to date, 44 countries have ratified the convention.
IKEA’s sustainability programme goes beyond taking responsibility for manufacturing plants; it also includes transportation, customer choices and parking for electric cars.
Photo: Simon Paulin/imagebank.sweden.se
Promoting sustainable initiatives
By placing demands on its own enterprises and promoting sustainable initiatives in general, the Swedish Government aims to inspire all companies to increase their sustainability efforts.
The Swedish Government owns 46 companies of various sizes, two of which are listed companies. In 2007, Sweden became the first country to demand sustainability reports from state-owned enterprises. The reports have to comply with guidelines from the Global Reporting Initiative (GRI).
In 2012, Sweden took another important step by asking state-owned companies to set several sustainability goals, and to report on them in 2014. The targets are to be set by the company boards, with focus on diversity, environment issues, human rights, working conditions, anti-corruption measures, business ethics and gender equality. The targets must also be measurable, specific and relevant to the companies’ operations.
Human rights – a priority
The Swedish Government expects all Swedish companies, private or state-owned, to respect human rights in all their operations. It encourages the private sector to follow the OECD’s guidelines for multinational companies, to apply the ten principles of the UN Global Compact and follow the UN Guiding Principles on Business and Human Rights.
In the end, however, sustainable business practice should be driven and owned by the private sector, with each company deciding if and how it will work with sustainability.
Striving to lead by example, the Government has a unit within the Ministry for Foreign Affairs focusing on issues related to sustainable trade and business, and also has an Ambassador for Sustainable Business (see box).
Strict environmental legislation combined with high levels of environmental awareness and knowledge have led Swedish companies to be environmentally innovative and efficient in their operations. Low-impact production techniques, in particular within industrial production, are now often exported to other countries.
Sweden also plays a prominent role in cleantech sectors such as non-fossil fuels and water quality, with several companies as leaders in their fields. SEKAB, for example, is a major European supplier of ethanol and ethanol derivatives, used for fuels and low-environmental-impact chemicals, while water-technology company Xylem has operations in more than 150 countries.
Four Swedish companies striving to set examples
Atlas Copco is a leading supplier of industrial equipment such as compressors and assembly systems. Since it has operations and production facilities in countries where there is a high risk of human rights violations, Atlas Copco follows a human rights strategy. In line with this strategy the company not only conducts regular corporate assessments, but also helps business partners and customers improve human rights. www.atlascopco.com
In 2012, state-owned alcohol monopoly Systembolaget introduced a code of conduct – based on the declaration of human rights made by the UN and other international bodies – for its wholesale purchases of alcoholic drinks, in collaboration with the alcohol monopolies of Norway, Finland, Iceland and the Faroe Islands. The code requires responsible treatment in terms of human rights, working conditions, anti-corruption measures, and environmental issues in both the companies’ own operations and their supply chains. www.systembolaget.se
Clothing company H&M, with nearly 5,000 stores around the world, has an eco-clothing line called Conscious Collection. H&M works actively with its suppliers to promote labour rights and reduce environmental impacts. Around 700 suppliers manufacture H&M products, many of them in countries where issues such as child labour and workplace safety can pose problems. H&M has an audit team of 70 people monitoring suppliers’ compliance with the H&M code of conduct. www.hm.com
Last updated: 28 February 2020