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 (October 2020), 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 eighth of 180 countries in the Environmental Performance Index 2020.
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 2021 report, Sweden was ranked fifth of 156 assessed countries, surpassed only by Iceland, Finland, Norway and New Zealand.
Corruption has been identified by the World Bank as one of the greatest threats to growth.
Sweden ranked third on Transparency International’s Corruption Perceptions Index 2020, jointly with Finland, Singapore and Switzerland. The index ranked 180 countries and territories by their perceived levels of public sector corruption.
Since 2012, Sweden’s legislation has categorised 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.
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.
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.
Companies striving to set examplesUltimately, it is up to the private sector to drive sustainable business practices forward. In Sweden, many companies have been quick to seize the opportunity to innovate for the better, not least through green conversions. Sustainably run companies have a better chance of attracting and retaining customers and competent staff, as well as getting investments and loans, which in turn open greater opportunities to expand. Here are four sustainable initiatives by Swedish companies in four different sectors:
Fossil-free steelHYBRIT – a joint initiative by Swedish steel manufacturer SSAB, mining company LKAB, and electricity producer Vattenfall – aims for steelmaking that is entirely fossil-free by 2045. The technology under development will replace coal – traditionally needed for ore-based steel production – with hydrogen gas, which changes the by-prodouct from carbon dioxide to water. SSAB aims to deliver its first fossil-free steel to the market in 2026, with a full-scale solution in place by 2035. By 2045 SSAB is to be totally fossil-free – identical to the government’s goal for all of Sweden.
Work-life balanceAt music streaming company Spotify, all employees are eligible for six month of corporate-funded parental leave with full pay – regardless of where in the world they work. The leave covers any parent, regardless of the employee’s gender or parental form. Spotify also encourages all employees to exchange any public holidays for days of their choosing in line withg their personal beliefs or religions. These global policies recognise the importance of a healthy work and family life balance and aims at giving everyone equal opportunities to combine family life with career ambitions.
Maintaining industrial ethicsAtlas Copco, a leading supplier of industrial equipment such as compressors and assembly systems, has nearly 40,000 employees, serving customers in more than 180 countries. This kind of global reach translates to a lot of responsibility, especially when setting out to grow only in ways that are ethical. To stay the course, Atlas Copco trains employees in how to recognise conflicts of interest, bribery, fraud, harassment, discrimination and other forms of misconduct. The company encourages not only its employees but also business partners and other stakeholders to report any suspected wrongdoing or misconduct. In 2019, 98 per cent of employees signed off on the company’s code of conduct, and 94 per cent took the annual e-learning course to further improve the understanding on how to handle various ethical dilemmas. Atlas Copco has an established process for reporting actions perceived as violations of laws, regulations or the Atlas Copco Group Business Code of Practice, which is often stricter than local laws. Reports can be made in any language, written or orally.
Fast food, slower climate changeMax Burgers is a fast food company that stands out from the competition through its commitment to change its industry into something sustainable. The company works consistently to shrink its climate footprint by reducing emissions. One way is to offer five times as many green meals and increase sales of vegetarian meals, which have smaller carbon footprint. The goal is that 50 per cent of meals sold in 2022 will be anything but red meat. Max conducts a comprehensve and continuous analysis of their climate imprint in which emissions for the entire value chain are calculated. They even include employees’ trips to and from work, guests’ trips to and from the restaurant, as well as their own business business trips, including air travel.
Last updated: 28 February 2020