Many Swedishmultinationalswere earlyadopters of thesustainabilityagenda

The year is 2024. In the picturesque Royal Seaportarea of northern Stockholm, residents wake up

to clean dishes, dried clothes and charged cars. Thestreets bustle with activity as people hurry to theirvirtual meetings. The combined efforts of solar andwind energy, cutting-edge architecture, electric carsand appliances with machine-to-machine commu-nication enable these residents to produce 1.5tonnes of carbon per person annually, about 75%less than 15 years before.Back to 2011, and Royal Seaport is one of

Europe’s largest construction sites. A joint initiativebetween the city of Stockholm, academia and busi-nesses including ABB, Ericsson, Electrolux andenergy company Fortum, it is pioneering a smart-grid system – a precondition for zero-carbon living.The goal: to build a fossil-fuel-free community

with 10,000 residences and 30,000 workplaces by2030. It has the potential to showcase Sweden’sinnovation, IT and engineering excellence interna-tionally. In a nutshell, Royal Seaport embodiesSweden’s vision of sustainability and the role ofbusiness partnerships in achieving it.

Recognition Sweden is used to accolades for its sustainabilityperformance. In 2007, it topped AccountAbility’sResponsible Competitiveness Index ahead ofDenmark, Finland, Iceland and the UK, for doingthe most to advance business competitivenessthrough responsible business practices.

“Sweden shows that good social and environ-mental performance can underpin and supporteconomic growth,” says Paul Begley, researchmanager at AccountAbility. More recent indicesconcur – Transparency International rates Swedenfourth best in its global Corruption PerceptionsIndex, while Edelman’s Trust Index 2010 concludesthat companies headquartered in Sweden areamong the top three most trusted globally.It’s good for international reputation building.

Exports are the lifeblood of Sweden’s GDP, motoredby vibrant automotive, electrical, chemical,telecoms, steel and paper industries led by globallyrecognised brands including Ikea, Ericsson, Elec-trolux, H&M, SCA, SKF, Volvo and Tetra Pak.Future areas of focus include environmental tech-

nology: the Swedish government has earmarked€420m for environmental projects over the next two years, including €129m to commercialise greentechnology.Many Swedish multinationals were early

adopters of the sustainability agenda. The driverwas not so much consumer demand as recognitionof sustainability’s strategic potential in internationalbusiness – and because the state demands it. Layingout clear rules is something Swedish governmentdoes well.The Swedish way of tackling sustainability chal-

lenges is the systematic way. Swedish business has a long-standing appetite for management systemsand standards and boasts the fourth highest

Overview

Quietly confidentBy Astrid von Schmeling in Stockholm

With a strong economy and global brands, Sweden is busy building a sustainable future

Country briefing:Sweden

55 Tackling social challenges

61 A joint activist approach

63 Do as government does

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ISO 14001 accreditation rate in the world – impres-sive for a country with a population smaller thanBelgium’s.Consumers are used to having their best interests

looked after by the state. In a 2009 Globescan report,only 4% of Swedish consumers spontaneouslybrought up climate change and environmentalissues as a top concern – well below Australians(22%) and Chinese (23%).

Consumer challengesThey make up one of the most homogenousmarkets in Europe; once products are accepted,widespread adoption is guaranteed. Take fair trade.After a long struggle to break through, sales of fairtrade products increased 75% in 2009 alone.As a small country, corporate, political and

cultural life is closely intertwined. Exchanges comenaturally and informally and are typicallyconsensus-driven. Swedes like to agree, so manydon’t “get” stakeholder engagement – it seemsredundant.Sweden’s open and ongoing dialogue between

employers and unions is a case in point, designed to

let the parties cooperate without surrendering their own interests. By law, employee unions mustbe represented on the board of every listedcompany.No country is perfect and the former leader of

the political opposition Mona Sahlin has noted thatSweden has the most highly educated taxi driverson the planet – alluding to the difficulties facingthose with non-Swedish names in finding appro-priate employment. It’s a recognised problem, yetfew Swedish companies can demonstrate they areactively addressing it.Actions speak louder than words in a country

where understatement is engrained. Swedes call it“jäntelagen”, meaning “a code of conformity forbid-ding anyone to feel superior to their neighbours”. In the corporate sustainability context the result

is a focus on process and performance measurementand getting your house in order – a successfulapproach for risk management. However, assustainability ratings indices increasingly gaugecompanies on bold leadership and forward-lookingstrategy, this traditional discretion could markSwedish pioneers down. n

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Astrid von Schmeling, based in Stockholm, specialises insustainability strategy andcommunications. She is a former managing director of the magazine Tomorrow:Global Sustainable Business.

Country briefing: Sweden Ethical Corporation

Socio-economic statistics

Population: ....................9.1 million (2010)GDP: ..............................€248bn (PPP 2009)GDP per capita: ..........€27,400 (PPP 2009)Human Development Index: ........0.885, 9th out of 182 countries

Current leadership

Prime minister: ..............Fredrik ReinfeldtType: ....................Constitutional monarchy

Key trading partners:

Top exportsNorway 10.6%Germany 10.2%UK 7.5%

Sweden corporate responsibility factsheet

Top importsGermany 17.9%Denmark 8.9%Norway 8.7%

Ethical Corp survey results

Number of employees spending more than 50%

time on CR/sustainability team (n=20):

Have over 10 employees 20%

Have 5-10 employees 15%

Have 2-4 employees 35%

Have 1 employee 15%

No response 15%

Size of CR/sustainability budget (n=18):

Have a budget over €30,000 72%

Have a budget €20,000–€29,999 0%

Have a budget €10,000–€19,999 11%

Have a budget €5,000–€9,999 6%

Have a budget €1,000–€4,999 11%

Have a budget under €1,000 0%

Focus of CR/sustainability team (n=20, including three

selections allowed to each survey respondent):

Reporting 45%

Employee engagement and management 30%

Dealing with climate change 25%

Sweden sustainability leaders most mentioned (n=20):

Ikea

H&M

Electrolux

Foreign sustainability leader most mentioned (n=20):

GE

InterfaceFLOR

ABB

Guidelines and initiatives most used (n=20):

Global Reporting Initiative

Global Compact

Top three challenges and risks (n=20):

Climate change

Integrating sustainability into overall strategy

Social and labour supply chain issues

Top three opportunities (n=20):

Energy efficiency

Product innovation

Developing Swedish green issue leadership

Guidelines and standards statistics:

GRI reports in 2010 73

DJSI Europe listing 3

Global Compact participants 109

UNPRI signatories 25

References:• Socio-economic statistics obtained from

recent publications from the CIA Factbook and the Human Development Index.

• Guideline and standards statistics obtainedduring November 2010 from official websiteof each initiative.

• Corporate responsibility data obtained from aNovember 2010 Ethical Corporation survey. Thesmall sample of this survey means that theresults should be regarded as an indication oftrends in Sweden and not as scientific research.

Sales of fair tradeproducts increased75% in 2009 alone

The Swedish love affairs withinnovation andthe environmentmanifest themselves in a thriving cleantech sector

By 2050, Sweden will have a sustainable andresource-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 ithappen.This “can do” mentality has spawned a culture of

innovation: Sweden is a nation of technology opti-mists. Innovation and cutting-edge design are partof the Scandinavian DNA. Among the notableindustry sectors are cleantech, information andcommunications technology (ICT), life sciences,automotive and materials sciences. Healthcare andforestry are also significant employers.This Swedish emphasis on innovation was

recently showcased at the Shanghai World Expo2010. Here, the Swedish pavilion, conceived bysustainable engineering and design companySweco, focused on three keywords – innovation,sustainability, and communication – and a singleunifying theme “Sweden – Spirit of Innovation”.With a strong tradition of functionality,

simplicity and engineering, Swedish companieshave embraced the challenge of innovating for theenvironment. In terms of energy efficiency, forexample, industrial engineering company AtlasCopco was the first to offer certified “net zeroenergy consumption” compressors under itsCarbon Zero range. The built-in energy recoverysystem allows 100% of the electrical power input tobe recovered in the form of hot water – useful forwater-intensive industries such as the food anddrink, 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 Seavacuum cleaners, made from plastic harvested fromfive of the world’s marine environments. Using thesame core structure as the Electrolux Ultra OneGreen model, these prototypes are intended to raiseawareness about the paradox of excessive plasticwaste in the oceans and shortage of recycled plasticon land.

An incubator for cleantechNot surprisingly, the Swedish love affairs with inno-vation and the environment manifest themselves ina thriving cleantech sector.Both government and private venture capital are

behind this sector’s success. This year Swedish statepension fund AP7 – with about 100bn kronor(€10.7bn) under management – announced itsintention to triple investment in renewable energyover the next two years to 3bn kronor (€320m), inanticipation of people switching to cleaner tech-nologies.In September 2010, Stockholm – chosen as the

first Green Capital in Europe for its efforts on noisepollution, clean water, waste systems and urbangreen areas – held Cleantech Venture Day. Organ-ised by Kista Science City, Stockholm Innovation &Growth and KIC InnoEnergy and billed as Scandi-navia’s largest cleantech investment event, it wasintended to bring together investors and innova-tors/entrepreneurs within the primarily small andmedium-sized enterprise-led cleantech sector.Among the promising up-and-coming offeringswere HiNation‘s mobile solar products for portable

Corporate issues

The human touch

By Andrea Spencer-Cooke

While Swedish companies are environmental leaders, the next challenge is to harness Swedishinnovation to tackle the global social and development aspects of sustainability

Country briefing: Sweden 55Ethical Corporation

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56 Country briefing: Sweden Ethical Corporation

Sustainable fashion in Sweden – exploring the oxymoronBy April Streeter

Sweden’s reputation as a leader in design and sustainabilitymeans it’s no surprise the country is leading the way insustainable fashion.The good name is for good reason. Sweden is home to the

Sustainable Fashion Academy (SFA), which has put more than 75fashion professionals, including from companies such as Ikea,H&M, and tiny labels such as Nudie Jeans, through the funda-mentals 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 notunderstood its environmental impacts,” says SFA’s founder,Michael Schragger. Like the famously shy Ikea, Swedish fashionbrand managers see sustainability positioning as leaving theirbrands open to criticism, Schragger says. Often, they do far more

than they publicise. In an industry made up mainly of small andmedium-sized firms, moreover, there are gaps in systematisingsustainability and strategic thinking.This is epitomised by small fashion house Gudrun Sjöden.

The eponymous founder says her company’s efforts to sourceorganic textiles and investigate Tencel/Lyocell cellulose fibrefabric to produce beautiful classics are among the country’s bestsustainable fashion examples. Sjöden claims 50% of thecompany’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 Collec-

tive, based in Sweden’s second-largest city Gothenburg. Anabbreviation for Don’t Eat Macaroni, the name is an anti-globali-sation statement. DEM’s founders Karin Stenmar and AnnikaAxelsson 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 forclassic pieces – jeans, jackets and t-shirts. With whittled-downmargins, they have enough consumer acceptance to now test thehigh-fashion, 100% organic clothing in the US.

Klättermusen, a young Swedish brand of athletic gear, iscombining the Swedish appeal of the great outdoors withcommitment to the environment. Their recovery and recyclinginitiative, Recover, gives consumers up to €20 for returning usedgear to their stores.

Better returnsBoomerang, too, has followed suit with its “Boomerang effect”, aconsignment return store. Klättermusen is unique amongdomestic apparel counterparts in assigning an eco-index to eachof its products – a number on the label that includes its expectedlifetime, sustainability of materials and prospective recyclability.Unfortunately fashion – with its ephemeral, get-what’s-hot

psychology and consumption patterns – conflicts deeply withsustainability goals. Mega-fashion brand H&M knows this. Itlaunched a well-received organic and recycled-material GardenCollection 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 misidentifyingorganic cotton items and cutting up unsold merchandise – garnermore headlines than its positive moves.Here is sustainable fashion’s oxymoron. Mathilda Tham,

professor of sustainability and fashion at Beckman’s School ofDesign, 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, arethe future. To answer the need for novelty, Tham says fashionhouses must look at what they are really selling – not a means tostay 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 evencrowd-sourced design, and fashion “experiences” taking theplace of constant shopping.Now there’s a trend worth following. n

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.

H&M's basic ranges are going organic

H&M

energy and Solvatten‘s solar safe water system.HiNation’s concept – judged best business idea

by the Stockholm Chamber of Commerce inOctober 2010 – is a fittingly iconic product to comeout of the land of the midnight sun, although itsapplication is truly global. HiLight is a ROHS-compliant solar-powered combined lamp andcharger that can produce 20 hours of light or threemobile phone charges from 10 hours of sunlight. With 25% of the world’s population lacking

access to electricity, yet over 500 million mobilephone users in Africa alone, HiNation plans to givecustomers in emerging markets across Africa, Asiaand Central America a safe, accessible and environ-mentally friendly alternative by which to study,work and remain connected. Enter cleantech with asocial face.

Safe waterThe social value dimension of emerging Swedishcleantech is also evident in Solvatten, a containerthat cleans contaminated water in a couple of hoursusing heat, UV and a built-in filter. The rationale forSolvatten is compelling: by removing the need forwomen and young girls in developing countries tospend several hours collecting firewood to makewater safe, the product makes more time availablefor productive pursuits, helping raise living stan-dards and make local communities moresustainable. It tackles head-on at least five of theMillennium Development Goals.Sweden was the first country with a coordinated

function for corporate social responsibility withingovernment. Catharina Kipp is currently CSRambassador at the ministry of foreign affairs inter-national trade policy department, where she headsthe Swedish Partnership for Global Responsibility.Created in 2002 after the World Summit on Sustain-able Development in Johannesburg, South Africa,this group aims to spur Swedish companies’ workon labour conditions, human rights, anti-corruptionand environment. Kipp says: “It’s no longer a question of whether

57Country briefing: Sweden Ethical Corporation

Case study – Ericsson: turning iPhone into wePhone

Usually touted as the latest “must-have” luxury consumer accessory, the mobilephone and the technology behind it also tells another story.Take Ericsson, the world-leading provider of telecommunications equip-

ment and related services to mobile and fixed network operators globally. Morethan 1,000 networks in more than 175 countries utilise the company’s networkequipment and some 40% of all mobile calls are made through its systems.Founded in 1876 and headquartered in Stockholm, Ericsson has more than88,000 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. Sofar so business-as-usual. But where Ericsson is turning the industry on its headis how it is putting its vision of “communication for all” into practice throughthe 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, in2007 Ericsson became involved in the Millennium Villages Project, a bold, inno-vative model for helping rural African communities lift themselves out ofextreme poverty. Launched by Jeffrey Sachs of the Earth Institute, Columbia University, the

project uses communication technology to close the digital divide and raise thestandard of living by providing access to real-time market information, healthservices 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 marketreality. With mobile subscriptions already topping the five billion mark, thecompany sees great potential for alleviating poverty and improving efficienciesat 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 butmobile penetration of about 40%, it’s clear the mobile phone will be the point ofaccess for crop reports, or weather conditions, or where to sell your fish in themarket. 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 scaleup or live up to the promise.” Governments, too, need to play their part by creating an enabling environ-

ment with the right legislation to support take-up. And they need to thinkcross-sectorally. “Industries have typically developed vertically, but by applyingtechnology across sectors such as utilities, healthcare, energy and transport, youget many more benefits.”

Public-private partnerships, then, are essential. But what is remarkableabout Ericsson’s efforts is how tackling poverty and creating more sustainablesocieties is connected to the core business – the company is showing that itreally is possible to address the lowest spending segments profitably andachieve sustainability goals with the use of broadband at the same time.

Ericsson is closing the digital divide in Africa

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to work with corporate responsibility, but how to doit. It’s a matter of minimising the negative impactthat a company can have on the environment andpeople. Many Swedish companies are at the fore-front in this regard.”In late 2010, Sweden had 109 UN Global Compact

signatories – 25 of these since 2005. In general, theconcept of corporate responsibility is well estab-lished in mainstream Swedish business. A 2007survey of 100 large corporations by Swedishbusiness magazine Veckans Affärer found that 88%of companies had increased their work with CRissues, in particular in the areas of climate and envi-ronment (81%) and being a good employer (78%).The Swedish appetite for systemic approaches to

CR has led to significant uptake of managementsystem standards such as ISO 14001. Calculatingenvironmental impact and tracking performanceare Swedish strengths. Companies in strongly risk-based sectors have demonstrated particularly goodperformance here, including airliner SAS, andforestry and manufacturing companies such asScania, Volvo, Electrolux, Atlas Copco, SKF andSandvik.But as companies increasingly shift production

outside Sweden, they are confronting labour and

58 Country briefing: Sweden Ethical Corporation

Working with Unicef on supply chain issues

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market conditions outside their Swedish comfortzone. Growth in the uptake of the UN GlobalCompact is one indicator of the trend for Swedishcompanies to develop universal or group-wideapproaches and standards.The country recently played a leading role in the

development of the ISO 26000 guidance on socialresponsibility standards. Together with ABNT, theBrazilian Association of Technical Standards, theSwedish Standards Institute (SIS) provided jointleadership of the ISO working group on socialresponsibility. Published in November 2010, the voluntary

guidance applies to all types of organisations.Although it cannot be third party certified and is nota management system standard, it seeks to promotecommon terminology and bring consistency tooperationalising social responsibility, identifyingand engaging with stakeholders, and enhancing thecredibility of reports and social responsibility claims.

Restructuring by consensusDealing with the socio-economic impacts of restruc-turing has largely been a success story for Swedishcompanies. Thanks to good relations with unions, apractical, transparent and inclusive approachprevails. As a result, few moves have resulted in thekind of worker dissent experienced in Germany orFrance, and the more proactive companies havedeveloped systems to ensure local communitiescontinue to thrive, in spite of losing a majoremployer.In Västervik, for example, Electrolux individually

tailored employment opportunities for staff whenthe vacuum cleaner factory closed down. A two-year project was launched to help the 511employees find work. Electrolux donated its factoryfacility and invested 20m kronor (€2.1m) intogrowing the regional economy and in ForwardVästervik!, a development company jointly ownedby government and business. The outcome was thata 2009 Confederation of Swedish Enterpriseregional ranking of economic viability ratedVästervik 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 Pakhave joined WWF Climate Savers on carbon reduc-tion; Ikea and H&M have worked with Unicef onsupply chain issues; and Ericsson has partneredwith the Red Cross on disaster relief throughEricsson Response.Partnership at regional level has recently seen

Nordic environment ministers agree to integrateclimate aspects as a criterion for using the NordicEcolabel – the Swan. The ministers have also agreedto develop joint action to protect people and theenvironment against endocrine disrupters andchemical cocktail effects, and to jointly strengthendialogue on a green economy with developing

Sweden played a leading role inthe developmentof ISO 26000

countries, in preparation for the World Summit onSustainable Development in Rio de Janeiro in 2012. On the European front, having banned the use

of mercury domestically, Sweden has pushed for EUleadership on the global mercury convention nego-tiations.Partnership will certainly be needed where the

Baltic Ecoregion is concerned. One of the world’smost trafficked bodies of water and Sweden’saquatic lifeline, it is also one of the world’s mostthreatened environments. Overfishing, oil spillsand land-based, nutrient-rich pollution from agri-culture and industry continue to negatively impactthis fragile zone. Industrial interest in the Baltic is growing too –

Russian/European consortium Nord Stream haslobbied intensively for permission to lay a pipelinealong the Swedish coastline. It gained consent in

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The Baltic,Sweden’s aquaticlifeline, is one of the world’smost threatenedenvironments

Country briefing: Sweden Ethical Corporation

Case study – SCA: a big surprise in the woods

100 years of careful management in Sweden's forests

As Europe’s largest private forest owner, it’sunderstandable SCA was an early adopter ofForest Stewardship Council (FSC) certification. Formed in 1929 as a forest industry holding

company, SCA is a personal care, tissue, pack-aging and solid wood products company. In 2009,net sales amounted to 111bn kronor (€11.8bn). Itslargest markets in terms of sales are Germany, theUK, US, France, Italy and Sweden – but marketssuch as Argentina are growing rapidly.SCA has a longstanding commitment to respon-

sible forestry practices. Kersti Strandquist,vice-president for corporate responsibility,explains: “Our sector perceives forests as aresource. It dates back to the 1904 Swedish Sylvi-culture Act stipulating that forest should beregenerated. About 100 years ago the Swedishforest industry exploited natural resources, but thatlaw helped us become aware that it was a resourcethat needed regenerating.” Since that time, thevolume of standing forest in Sweden has doubled. SCA was a pioneer of forest certification. The

company owns 2.6m hectares of forestland, ofwhich 2m hectares are used for timber produc-tion. In January 1999, SCA’s Swedish forests werecertified under the FSC scheme. It is now one ofthe world’s largest suppliers of FSC-certifiedproducts, ranging from solid wood and pulp, totoilet 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 smallprojects, which together reduce emissions by240,000 tonnes of carbon a year, saving €63m.Engagement of people on the local level has beenkey; in some parts of the business, bonuses arelinked to energy savings. The company has set anabsolute 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 inSweden – and third in the Nordic region – forgreenhouse gas emissions reporting. “We’re veryproud of our work to reduce our carbon emis-sions,” Strandquist says. “With net annual growthof 1% in our forests, we’re able to sequester 2.6mtonnes of CO2 – which is approximately equiva-lent to how much we generate in our operations,not including suppliers.”

Reducing energy costs – especially in pulp andpaper mills – remains in Strandquist’s words “anextreme challenge”. To tackle this, SCA is gener-ating its own electricity using windpower andcombined heat and power generation units in ourmills. A new unit called SCA Energy has beencreated to take this aspect of the business forward.But SCA’s sustainability engagement doesn’t

stop at forests. In developing countries, risingincomes and awareness of the health benefits ofbetter hygiene are expanding use of personal careproducts. Intimate care, however, is often a taboosubject. As one of the world’s largest players inpersonal care and the global market leader inincontinence care products through its Tenabrand, 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 viewson menstruation, and its Libresse School Program inRussia, which raises awareness around puberty andpersonal hygiene, the company is increasingconsumer access to information and helping todestigmatise conditions such as male incontinence.For SCA, it’s an economic and social win-win: raisedawareness means bigger business opportunities –and less unnecessary human suffering.

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2009, but debate remains on how the area could beaffected. With shipping expected to double in thenext 20 years, tourism growing exponentially, andthe fishing industry struggling to rejuvenate criti-cally low stocks, expect sparks as sectoral andnational interests collide.Signs of progress include ferry and cruise

shipping companies Viking Lines and Silja Linessigning a WWF moratorium in 2007 to stop offshorewaste dumping and bank SEB’s Baltic Sea fund,which funds Baltic projects through WWF.

The Achilles heelIf Swedish companies have a corporate responsi-bility weakness, it might be in the area ofphilanthropy – a possible contributor to only fourSwedish companies making it into the DJSI Worldindex in 2010 – down from six in 2005.Diversity, too, in both ethnicity and gender, is a

recognised challenge in senior managerial andboard positions. Currently, among companies listedon the Swedish stock exchange, 21% of boardmembers are women. Among state-owned compa-nies, it is 49%. In a market-friendly move to increasegender diversity, the Swedish prime minister,Fredrik Reinfeldt, recently suggested providing taxincentives to those companies willing to break thattrend.Integration of ethnic and cultural diversity is

another story, as highlighted by former leader ofSweden’s political opposition Mona Sahlin whenshe commented that the country has some of thehighest qualified taxi drivers around. Sweden is highly homogenous, yet immigrant

populations have increased exponentially in thepast 20 years. Today, 13% of the population is ofnon-Nordic origin, primarily consisting of Iraqis,Yugoslavs and Poles, yet this is not reflected incorporate hierarchies.Manpower, Sweden’s 10th largest employer in

2009, has identified diversity as one of its globalfocus areas. It launched a well-received and uncon-ventionally direct advertising campaignquestioning the Swedish business sector’s ability torecognise talent among the over-35s, women andimmigrants – marking a rare effort by a company toaddress an issue that most Swedish businessesprefer to keep behind closed doors. Ericsson, for itspart, has tried to tackle the issue by encouragingnon-Swedes into senior management positions.Overall, though, the Swedish approach to CSR

could be summed up by that uniquely Swedishword “lagom” – which has no real equivalent inEnglish, but means something like “just the rightamount”. That’s not to say that Sweden has reachedthe end of the responsible business road – there arestill many issues to be tackled – but that it isproceeding in the right direction. n

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Among companieslisted on theSwedish stockexchange, only21% of boardmembers arewomen

Country briefing: Sweden Ethical Corporation

Andrea Spencer-Cooke has beeninvolved in sustainable businessthinking and practice since theearly 1990s. She is the formereditor of Stockholm-based magazine Tomorrow:Global Sustainable Business.

Fishing stocks frozen

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NGOs are aided by a governmentstructure thatfosters high levelsof transparencyand access

To outsiders, Sweden presents a vision of cleanwaters, boundless tree-filled wilderness and

healthy, hearty, nature-loving blondes. That’s ageneralisation, but the picture resonates withSwedes themselves, which may be one of thereasons the country started early with environ-mental regulation and domestic support fornon-governmental organisations. Sustainability-promoting organisation The Natural Step (TNS)originated in Sweden, and the country hosts one ofthe world’s largest WWF divisions.Although it can lay claim to one of the earliest

and most famous cases of European tree activism –the 1971 “Almstriden” or “battle for the elms” –Swedish environmentalism generally favours amore collaborative approach. And while move-ments like the Nordic Action Climate Camp stillfavour direct action, for the most part, public-private partnerships are a Swedish speciality.NGOs are aided in this by a government struc-

ture that fosters high levels of transparency andaccess. “Politicians are much more accessible inSweden than in many other countries,” says BarbaraEvaeus, manager of climate communications forWWF Sweden.

Step by stepTNS, a catalyst of the corporate sustainabilitymovement, sees the evolution of sustainability-focused non-governmental organisations inSweden as divided roughly into two phases. Thefirst – from the late 1980s to the late 1990s – was amobilising time, and NGOs such as TNS experi-enced rapid growth, according to Kaj Török, a

senior adviser and communications manager for theorganisation.“People here started to understand that they had

to do something about sustainable development.TNS helped answer the ‘why’ question,” Törökexplains. “The first wave was why, now it’s abouthow.”How NGOs actually make the business case to

industries and implement positive change is, ofcourse, trickier than just explaining why change isneeded. WWF’s Evaeus believes Sweden is indanger of losing its position as a frontrunner insustainability because it hasn’t moved swiftlyenough to scale the innovative products and solu-tions generated by NGOs and buddingentrepreneurs. “[Swedes] have been resting a bit ontheir laurels especially in reference to climate policyand clean technology where they were once globalleaders,” says Evaeus. “They need to step up theirefforts in this area in order to regain their lead.”Though she points out Sweden’s shortfalls,

Evaeus is also intimately involved with its potentialsuccesses – as co-developer of WWF’s three-year-old Climate Solvers project, which originated inSweden and spotlights 24 of the country’s mostinnovative pre-market climate solutions. ClimateSolvers, Evaeus explains, doesn’t only promotethese game-changers, but uses them to galvanisesupport from government and policymakers forhome-grown entrepreneurial green tech.So what do a hamburger and a bag of popcorn

have to do with all this? The hamburger, as most inthe western eating world know, is a pretty goodposter child for sustainability’s challenges. A fast-

Civil society

A gentler NGO approach

By April Streeter

Sweden’s campaigning organisations have notched up notable successes through cooperationrather than confrontation

61Country briefing: SwedenEthical Corporation

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food burger from a chain such as McDonald’s orBurger King has become an icon for food globalisa-tion, obesity, inequality in working conditions andthe environmental hoofprint of beef production.But fast-growing Swedish burger chain Max

Hamburgers saw this poor reputation as a businessopportunity. In 2007, working closely with TNS thecompany re-examined its operations and dared toask the unthinkable: “Is a sustainable burger chaineven possible?”Pär Larshans, Max’s director of sustainability,

says the company used TNS’s four basic sustain-ability precepts to visualise the gap between currentoperations and sustainable ones. With the roadmapped, the company switched all its restaurants towind energy, bought low-carbon vehicles, and offsetcarbon throughout the supply chain via reforesta-tion projects in Africa. It also cut GMOs from itssupply chain, upped its recycling rate, found FSC-certified paper for wrappers, and began aprogramme to hire and train disabled workers – 100and counting. It also put a CO2-equivalent tag on itsburgers and sandwiches – a revolutionary move inthe food business.

Popular with customersTNS’s focus on dematerialisation convinced thecompany that instead of sourcing post-consumerpaperboard for kids’ meals, it should scrap the boxaltogether. Max’s “fast, smart, and concrete”delivery of results astounded TNS, Török says. But the biggest surprise of all was the popularity

of the company’s actions. “There was a 27% increasein customer loyalty [between 2007 and 2009] and thechief executive concludes that at least half of thatcomes from sustainability efforts,” Török enthuses.As Max’s chief executive Richard Bengfors puts it ina report on the TNS-Max partnership: “Our sustain-ability-related activities turned out to be our mostprofitable initiatives ever.” In Sweden, non-governmental organisations

have been most successful where business andconsumer concerns intersect. For example, Rätte-vistmärkt (the local Fairtrade NGO) has made bigstrides, getting Swedish consumers to increase theirpurchasing of Fairtrade certified foods by 75% in2009 alone.Human rights and social justice issues resonate

with the Swedish public. So it’s not surprising thatRespect, established in 2000 by Swedish environ-mental pioneers Per-Uno Alm and Kaj Embrén, hasbeen able to create widely accepted businesssustainability tools by through two separatenetworks, The Business Leaders Initiative onClimate Change and Business Leaders Initiative onHuman Rights.Swedish faith in government-led domestic

welfare also extends to its activities abroad. Thegovernment-sponsored Swedish InternationalDevelopment Cooperation Agency (Sida) has, since

2006, been heavily involved insustainable development work inAfghanistan, for example.Although NGO Monitor is criticalof the political agendas that deter-mine how Sida’s money is spent,Sida has been instrumental inlaunching much-needed devel-opment programmes in theregion, with special emphasis onwomen.Sida has also granted 12m

kronor (€1.3m) to the SwedishNGO Hand in Hand. Founded in2000 with the support of formerABB chief executive PercyBarnevik, Hand in Hand works toempower women to start sustain-able micro-financed companies,and recently established a bank. Micro-finance, especially in India, has recently

come under close public scrutiny. Yet Hand inHand’s work has made a tremendous difference inthe Indian Tamil Nadu region in the last decade.More than 600,000 women have gone through itsentrepreneurial training, and more than half amillion have started small businesses.Tamil Nadu housewives Arulmani and Selvarani

are two such entrepreneurs. With a loan of 5,000rupees (about €80), they set up a popcorn businessin Selvarani’s kitchen. Six years on, they are making10,000 rupees a month, have developed six differentsnacks, and plan to brand their goodies. They canafford to send their children to school and theirhusbands have joined the business. With the newSida grant and Barnevik’s business acumen, Handin Hand now has the chance to attempt to worksimilar magic in Afghanistan.How Swedish NGOs broach future sustainability

challenges may well be framed by the work of theStockholm Resilience Centre. Gathering together 29international scientists to create a new paradigm forsustainable development, the centre has establishedwhat it calls “planetary boundaries” for earth’sdifferent systems – safe thresholds beyond whichthe risk for chaos grows uncomfortably high.The nine resulting boundaries – which include

climate change, land and freshwater use, chemicaland aerosol loading, biological diversity, ocean acid-ification, ozone depletion and the nitrogen andphosphorus cycles – form the key issues NGOsaround the world will need to work on in years tocome. The centre will provide necessary data andknowledge. “We’ve experienced increasing interestfrom NGOs in Sweden,” says Carl Folke, researchdirector at the centre. “We hope their interest willpersist and contribute to sustainable developmentof social-ecological systems, with a shift in perspec-tive from saving the environment to being stewardsof our own future.” n

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In Sweden, NGOshave been mostsuccessful wherebusiness andconsumer concernsintersect

Country briefing: Sweden Ethical Corporation

April Streeter is a writer specialising in sustainability since 1998. Formerly based inSweden, where she coveredScandinavia for WindpowerMonthly, she now lives inPortland, Oregon, and is ablogger for Tree Hugger and The Huffington Post.

The writers of this briefing arepart of One Stone, a global teamoffering sustainability consultancyand communications expertisewith specialised Nordic marketinsight. In addition to Stockholm,One Stone’s partners and associ-ates are based in Edinburgh,Sydney, Malta and Portland,Oregon. One Stone has more thantwo decades’ experience workingwith multinational companies to guide sustainability leadershipstrategies and provide focusedsustainability communication.

Half a million new micro-financed businesses in India

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Government

Leading byexampleBy Astrid von Schmeling in Stockholm

No one can accuse the Swedish government of lacking ambition

The Swedish government’s so-called“generation goal” aims to reduce pres-

sures on the environment by 2020 (2050 forclimate change) to sustainable levels, basedon 16 national environmental quality objec-tives. Underpinning this are ambitiousgovernment targets, forward-thinking legis-lation and big vision. Add to this aconforming populace and a close, if at timestesty, partnership between government andbusiness and these characteristics haveallowed Sweden to leapfrog to a lower-carbon, more gender-balanced society.So in December 2009, Swedish prime

minister and then-EU president FredrikReinfeldt set off to Copenhagen’s COP15summit with optimism. Carbon emissionrates can be decoupled from economicgrowth – his 20-year experiment proved it:between 1990 and 2008, the countryreduced its carbon emissions by 12% whileits economy grew 50%.No other sector embodies the Swedish

approach better than energy, where thegovernment uses its role as regulator, ownerand partner to lower carbon emissions, raisethe proportion of renewable fuels, andcreate a more efficient electricity market. Keyto this approach is creating the conditionsfor long-term rules in the energy market.Sweden has imposed the world’s highestcarbon tax on fossil fuels for industry, house-holds and transport. Although the cement,steel, aluminium, pulp and paper industriesstill enjoy exemptions, to ensure continuedinternational competitiveness.Through the Renewable Energy Direc-

tive, Sweden has attained 43% renewableenergy, which is especially high in heating.Big petrol stations are required to supply atleast one kind of renewable fuel, which hasspurred the growth of ethanol and biofuelsto 5.1% of total fuel consumption. Thegovernment’s goal is to raise this to 10% by2020. The state also provides tax relief forspecific industries to reduce their energy use.With the highest tax burdens and

perhaps the most expansive welfareprogrammes in the world, doing business inSweden demands an acceptance of complex

labour and environmental regulation. Morerecently, and particularly since the Conser-vatives took office in 2006, the state reliesincreasingly on instruments such as taxcuts, liberalisation of infrastructure andpartnerships.

In bed with business? The current pro-business governmentregards building partnerships with compa-nies as key to achieving sustainability goals.Look no further than Stockholm’s RoyalSeaport and its smart-grids project. “The Swedish government stated that the

smart grid is a national priority,” says TomasWall, smart-grids project manager and vice-president for research and development atenergy provider Fortum. “The city has beena key driver; they took the initiative andplaced high environmental requirements onall partners. They set the direction andtargets, which we help realise.” The SwedishEnergy Authority is funding 40% of the 30mkronor (€3.2m) pre-study, which will shift toimplementation as early as 2014. “There isno other place in the world which can fulfilsuch far-reaching goals,” Wall says.If there is a thorn in the side of the govern-

ment’s low-carbon vision, it is state-ownedVattenfall, one of Europe’s largest generatorsof electricity and heat. The company has beenhighly criticised in its major markets inGermany and Sweden in 2009 for a lack oftransparency, mismanagement of its nuclearholdings and stubborn reliance on coal. In2009, 51% of electricity was generatedthrough fossil fuels, while 49% of heating wasbased on hard coal. Despite this, Vattenfallwas supposed to spearhead the developmentof a sustainable energy system but is fallingwell short of its mandate.As a result, the Swedish government has

undergone a steep learning curve on how tobetter manage its 57 (42 wholly owned) busi-nesses. Like Vattenfall, many have highsustainability impacts – such as miningcompany LKAB, which is transplanting twoentire northern cities to continue its opera-tions. The national liquor store,Systembolaget, is challenged to find a balancein sustainable consumption of alcohol.“Some companies were doing a lot and

others not. Our focus has been on increasingtransparency. We thought reporting couldbe a tool to drive the work,” says JennyDidong, responsible for state-ownedholdings at the ministry of enterprise.Consequently, in 2007, the ministry passed adecree that all state companies must reportaccording to the GRI and be third-partyverified. “No-one says that companiesshould skip annual reporting, or that it coststoo much money. We wanted to givesustainability information the same status asfinancial information,” Didong says. By2009, almost all companies reported and83% were verified, compared with 10%among the 100 top Swedish companies.Internationally, the initiative has

received kudos for raising the bar onsustainability reporting among publiclyowned companies. The Netherlands hasfollowed suit and Spain has been at leastpartly inspired by the approach.It is this no-nonsense pragmatism and

the acceptance of a little short-term pain forlong-term gain that singles out Sweden’spoliticians as leaders in the sustainabilityspace. n

Astrid von Schmeling, based in Stockholm, specialises in sustainability strategy and communications. She is aformer managing director of the magazine Tomorrow:Global Sustainable Business.

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Reinfeldt aims for full sustainability by 2050

Ethical Corporation Country briefing: Sweden