The Emerging Stars of Sustainability - Are Nordic Companies the New Stars of Sustainability
TRENDS AND ISSUES IN THE WORLD
OF CORPORATE RESPONSIBILITY
The emerging stars of sustainability
Are Nordic companies the new stars of sustainability?
August / September 09
Welcome to the August / September special edition of the Directions
Supplement series. In this issue we provide a snapshot of what appears
to be an emerging strength and confidence in the approaches to
sustainability being adopted by Scandinavian companies – and they
also appear to be more willing than in the past to communicate on the
subject. By highlighting the stars from around the region we have collated
trends and areas of best practice that we feel are worth mentioning.
And with COP-15 just round the corner we invited our ‘best friend’
agency in Denmark, RelationsPeople, to reflect on the strong social
welfare traditions that underpin the region and take a look at the
energy sector’s experience of communications around climate change.
Sustainability is obviously not a new concept But above all others we think there is one
in Scandinavia. Indeed in many of the regions particular factor that is driving this subtle shift
companies have long been at the vanguard in mindset – it’s the market opportunity. There
of sustainability thinking and the Nordic seems to be a growing realisation that the
sustainability model resurfaces time and again substance-based approach, that has been used
as the style of capitalism that must be imitated up until now, means that Scandinavian companies
to help build a more sustainable future. are well placed to reap the benefits of this long-
termism. They’re realising that this substance,
But in our experience of working with the when allied to good communications, can now
leading companies in the region, the approach provide competitive advantage.
to communications on sustainability has often
lagged behind the reality and not really done And those companies that aren’t spotting this
justice to the strength of the thinking and the opportunity are increasingly at risk of losing out.
Scandinavian companies are globally
There are lots of very good reasons for this: competitive businesses often working in high
Government regulation has never really pushed impact sectors or innovation-based industries.
the subject; society’s relationship with business They must now be at least as adept as their
has tended to be fairly positive and trust peers at engaging stakeholders around the
relatively high; stakeholder groups (where they difficult issues they face – taking an understated
exist) have not tended to demand too much approach will no longer do but so many are
radical action; there also seems to be a very still doing this.
consistent view that sustainability should be
about substance first and communications So it is this gap and this emerging trend that
second (we would share this view); and then we want to explore. As with their much-admired
there is what several of our clients have referred model of capitalism, Nordic companies have
to as the cultural trait of under-statement and a unique opportunity to rightly stake their
modesty – it seems Scandinavian companies claim to being responsible leaders. Effective
prefer not to blow their own trumpets. sustainability communications in a
multidimensional, interconnected world is a
But in our view a lot of this is changing. New critical element to realising this advantage.
regulations in Denmark and Norway. Increased
stakeholder activism. The transparency needed So we have put some of the biggest companies
around global supply chains. The increased in Scandinavia under the spotlight and, looking
global access to company information afforded at what we think is great about what they
by the internet. Several corruption scandals. are doing to communicate their sustainability
Increasing consumer awareness of issues and initiatives, we pick out a few of the stars. It
decreasing consumer trust of business. Climate could be a one-off campaign, a new strategy,
change science. The financial crisis. All of these an issue-focused microsite, an interactive case
factors appear to be leading Scandinavian study map, a unique take on grappling with the
companies to re-think their approach to big challenges, or a great approach to dialogue
communications and this is being reflected with key stakeholders. Whatever it is that strikes
in more visibility, more transparency and us as demonstrating this new-found voice and
generally more communications noise. confidence in communications.
Sweden’s leading companies have, for some the build up to COP15, Vattenfall has an easy
time now, been amongst the best and most to understand map of where the business
visible in the region when it comes to is going. It also features many interactive
sustainability communications. The approaches slideshow presentations around key issues,
of the leaders are equal to and in many cases providing useful explanations of the business
exceed the effort of global peers making this impacts and processes looking at issues such
country stand out on the world stage. as CSS and nuclear. Companies around the
world could learn a lot from Vatenfall’s
The Volvo online report has many entry approach to sustainability communications.
points for different stakeholders, with tiered
information where each page leads you to Electrolux engages well on individual issues
greater level of detail or external links. All with a standalone water savings site – which
the data in one scorecard at the front of the is actually a product site for an efficient
40-page report showing the useful economic, dishwasher! A good example of a company with
environmental, and social data. A blog from sustainability well-integrated into its approach.
managers and polls on different issues are
also great features. The TeliaSonera report site is well laid out and
gives a good perspective of business operations.
The Ericsson report starts with its most Stakeholder assessment of issues and
relevant issues and these then guide the stakeholder engagement are well presented.
communications. Features include an
interactive case study map and CEO video. H&M takes a transparent ‘no stone unturned’
approach to explaining impacts in the supply
Skanska has a great ‘triple bottom line’ chain. The company identifies the top ten
interactive video and timeline showcasing non-compliance issues and individuals
its sustainability history. accountable for achieving targets are named.
The stakeholder feedback Q&A section also
SCA’s communications feature an engaging adds credibility. No doubt that this company
lifecycle brochure. But most importantly the is a Nordic star of sustainability.
company is clear in identifying the controversial
issues that are key to the business. SAS has an offset calculator which is a useful,
if uninspiring tool. SAS has a good assessment
With a Youtube style climate site containing of steps the airline industry can take to
information around the different stages of reduce emissions.
There’s some original thinking being done The highlight of Stora Enso’s site is the quick
in Finland and, for the most part, Finnish and easy reader survey facilitating feedback.
companies are comfortable talking about the The company takes an honest approach, for
issues that they are facing. With some world example when talking about fatal accidents.
leaders based in the country and also with
some industries needing to address some of A great sustainable forestry micro-site
the most challenging global issues (forestry, and good technical data, but unfortunately
nuclear energy, renewables), the approaches communications presented by UPM-Kymmene
and the ambition being demonstrated by some are a bit dry. More could also be made of the
of the companies show real star quality. ‘UPM stories’ section covering its big impact
areas. And how will it start to develop its
With an integrated report and separate position on water?
environmental brochure, Neste Oil displays
that the business is aligned with environmental Fortum has a number of position papers around
challenges. It also leads on issues such as key issues, such as a separate report exploring
sustainable palm oil, clean diesel and vehicle how it fits into the climate change debate.
emissions reductions. There’s also an ambitious new strategy and
direction which bodes well for future initiatives
Nokia is a great example of a company and leadership. Lots of challenges and lots of
completely integrating its sustainability engagement and activity to help address them.
principles through the development of an
environment-focused product line called The conversational tone adopted by the
‘Power of We’. It uses an interactive CR map SOK Group’s Responsibility Review makes it
to outline global initiatives across a number a great read. And the spirit of the cooperative
of different areas e.g. disaster relief and youth. movement comes through really well.
In partnership with WWF, Nokia has created a The Metsäliitto Cooperative CR review is
young online community talking about various incorporated into its annual report. Although
environmental issues. information presented in the report is in depth,
the company could benefit from consistent
communications, making the most of online.
Even though several world leading businesses chain issues found in Bangladesh with a
with some difficult industrial issues (Statoil detailed, frank explanation of problems
and Yara) can be said to also be world class and terminated partnerships.
in sustainability, the communications of the
companies away from the main spotlight has Pages on issues and impacts from Norsk
been generally uninspired and uninspiring. New Hydro are a good example of how impact
government thinking on company disclosure areas are addressed separately with single
in 2009, recent initiatives on the use of sources of information.
government pension funds to incentivise green Orkla has an online report site that has the
energy and technology, plus a new approach look and feel of a printed document. This is
to taxation on food and drink items which will disappointing as there is great evidence of
favour ‘products with health benefits’ all mean lots of dialogue channels for stakeholder
that the ground seems to be shifting – fast. groups. The content is there – but Orkla would
Yara international clearly demonstrates benefit from making much more of its online
how sustainability solutions are built into communications and demonstrating a
the business model. ‘Addressing the food more coherent overall group approach to
challenge’ is a great example of a company’s sustainability – admittedly difficult for a true
use of video content. conglomerate, but this is the challenge it
Statoil has an engaging online report tackling
energy reality issues. With its interactive site, Unfortunately AKER has taken a simple
‘solutions of tomorrow’, it looks at future efforts ‘nuts and bolts’ approach with only a PDF of
to reduce impacts and the ‘Hywind’ floating its CR report online. The strength is in its
wind turbine is well explained with rich content. year-on-year table assessing progress on
targets. Also worth mentioning is the
Looking at content, Telenor provides a really transparent explanation of fatalities.
strong response to the challenging supply
Long associated with innovation in the field Arla provides a wordy PDF Report, but this
of sustainability and the environment Danish is supported by videos on impact areas and
companies appear to have an appetite for food blogs.
leadership on these issues. Communications
beyond a few leaders had, until recently been Although Danish Crown does have an
limited but the government’s recent requirement environment and climate strategy the
for all companies to report on social and sustainability communications is limited to
environmental issues appears to have raised the its annual report. It does however have a
bar. Most companies had one or two excellent virtual slaughterhouse tour that is very
communications ideas and initiatives – well on informative, and actually fun!
the road to obtaining a full suite of tools to Novo Nordisk also integrates its sustainability
communicate their approach to sustainability. communications into its Annual report. One
Despite not producing a report Maersk focuses of the first companies to use tools such as
on a range of key issues, such as carbon capture games and scenarios to explore sustainability
and storage. Some good legwork with content issues, this company embodies worldwide
– we look forward to a report that presents this best practice.
information in an exciting and innovative way. Every retail unit in the Danske Bank Group
Unfortunately little more from ISS than launched a local CR site. The Group also
a functional explanation of what they do, produces a CR fact book which is heavy
partnerships and commitments. So much with performance data.
more could be done here. Carlsberg has a strong proposition and
Novozymes has a well-integrated approach strategy built around the idea of ‘growing
as products are positioned as solutions to big responsibly’. A case study map outlines
global challenges. Key best practice features initiatives across the 3 focus areas of the
are a ‘most-read tag cloud’ and a ‘second life environment, responsible consumption and
island’ where solutions for the future are responsible supplier management. There
showcased. Making full use of 3-D virtual reality appears to be a lot going on and a sense
environment to communicate, a genuinely of lots more to come.
innovative example of original thinking Vestas promotes modern energy as its theme
although possibly not all entirely effective. with many films which, despite a low level of
DONG has the shortest report for the detail, do a good job of engaging the audience.
sector (only 50 pages!). The introduction of But given Vestas’ position as a world leader in
an exchange between the WWF Secretary wind energy, we’d have to say that we’d expect
General and Dong CEO makes a great read. more in terms of communication – this seems
to be an opportunity missed.
Branding climate change – a Scandinavian approach
Kristian Eiberg Scandinavian countries, characterised by leaders are at the forefront of corporate
Partner strong social welfare systems, have long branding in theory and practice. We term
RelationsPeople been used to their governments taking the this ‘third wave’ corporate branding.
lead on sustainability issues. Acting through
the legislature, governments have tackled Behind creative and skillful communication
themes from corporate governance to, most is serious business. These companies actively
recently in Denmark and Sweden, demanding seek to influence the markets within which
that a large group of companies report on they operate. Carlsberg addresses water
corporate responsibility (CR). supply issues not only because it is a scarce
resource, but it’s also a prerequisite for beer
Maybe because of this strong emphasis on production. Novo Nordisk stands shoulder
public consensus and the ability of government to shoulder with health authorities in
to effectively regulate, Scandinavian companies tackling diabetes. By openly and actively
have not been active in communicating communicating around these issues, these
corporate responsibility. There has been no leaders build engagement and corporate
demand from stakeholders to do so. legitimacy in areas of potential conflict.
In Denmark, the regional bank Sparekassen The energy sector
Nordjylland took its first step into corporate Leading Scandinavian energy companies have
sustainability when in 1987/88 it launched engaged in ‘third wave’ corporate branding on
the world’s first ethical accounting statement. climate change and energy policy. Scandinavia
This approach inspired not only other Danish has strong, state-owned players that work
companies to follow suit, but also gained across the Scandinavian borders. In 2006
traction outside Scandinavia. The Danish Statoil launched a biofuel product supported
government played a leading role in deepening by heavy consumer advertising. But both their
CR across Europe as Danish companies were defense of first generation bioethanol and the
directly approached to contribute and advise mismanagement of NGO protests around their
on government-backed projects. Ms. Karen misleading marketing were highly criticised.
Jespersen, then Minister for Social Affairs, took Prior to the UN Climate Summit in Poznań in
the initiative to establish a National Network of 2008, Vattenfall launched a global campaign
Company Leaders to act as an advisory board to engage people to sign a declaration that,
to government. Representatives were selected among other things, called for a global price
from corporations such as Novo Nordisk, on CO2 emissions. Vattenfall was met with
Carlsberg, Grundfos and Oticon as well as sharp criticisms of greenwashing. Elsewhere,
from Danish SMEs. DONG Energy, has recently run a highly
visible campaign focusing on investments in
However, CR from a government perspective renewable energy sources such as wind power.
has largely been focused around creating
and maintaining an inclusive labour market – Public criticism and accusations of
mobilising various parties to address problems greenwashing are part of the game when
of unemployment and social exclusion of commercial companies enter the political scene
marginalized groups. and engage with these issues and ‘third wave’
corporate branding. If a company wants to
More recently Scandinavian companies have engage with stakeholders and take a stand
faced increasing demands to demonstrate on an issue it must have something to offer.
commitments to CR and accountability In order to be efficient, climate change
from global markets. This shift towards communications should by their very nature be
using sustainability to enhance global controversial to some and appealing to others.
competitiveness of Scandinavian firms has
been accompanied by legislation. The most In sum, a tricky dilemma needs resolving.
recent requires the 1,100 largest companies On the one hand, Scandinavian populations
to report on CR from 2009. have a high regard for those companies
associated with corporate responsibility, but
‘Third wave’ corporate branding at the same time the majority of citizens
Today, leading Scandinavian companies are skeptical when companies communicate
have realised that stakeholders’ concerns corporate responsibility. Mission impossible?
are their concerns. And that active listening No, but in order to successfully manage
to stakeholders enhances product innovation, the scepticism, companies must make sure
stakeholder relations and corporate reputation. that their corporate behaviour in this field
Many Scandinavian companies have put is matched by tangible actions, measurable
climate change at the centre of their targets and a business-driven approach. The
sustainability branding. Making firm publication of thousands of annual reports in
commitments and engaging meaningfully with 2010 that will report on responsibility issues
stakeholders as well as exploring potential will give an interesting insight into the current
solutions through communications, these state of affairs.