There is an opinion that only large enterprises have the resources and can afford “the luxury” to think about sustainability and greenification of their businesses. However, the emerging trends in international business lead to think that it NOT thinking about “green transition” is, in fact, “a luxury” that only a few can afford - those that do not need access to finance and capital markets and those who do not care about changes in the European Union’s regulatory framework and shifting trends in customer demands.
The Nordic Baltic Business Forum 2021 was organised by the Danish, Norwegian, Finnish, and Swedish Chambers of Commerce in Latvia, in cooperation with the Nordic embassies and the Nordic Council of Ministers’ Office in Latvia. The event was sponsored by Swedbank, Visma and Vastint. The event was streamed from the Radisson BLU Latvija Conference & SPA Hotel in Riga.
World has started to change already and the next 10 years will be the game-changer, points out Salla Ahonen, NESTE Vice President for Sustainability, showcasing NESTE’s experience at the Nordic Baltic Business Forum that took place on March 24 with a focus on Nordic Approach to the European Green Deal and introducing green transition in Latvia. Today, 94% of NESTE’s comparable operating profit come from renewable businesses, and the company continues to work strategically to reduce the carbon footprint of their production. 25% of their employees work in R&D and engineering. Despite the fact that COVID-19 pandemic has been dominating headlines, the climate issues are still on the top of public agenda.
Ms Ahonen tries to break the perception that if a company that does not have a lot of money they cannot do anything, as there is a lot of interest in sustainable solutions, which investors are looking to invest in. "Large funding is not always the key - if there is a good project, investors will be interested in it themselves. It is also valuable to use the European Union's (EU) funds for the introduction of sustainable innovations”, says Ahonen.
She also added that the Baltic States should use their innovation potential, cooperate more actively, and move forward faster and more strongly to develop a greener economy and society. “No company can make a transition to sustainable green economy alone. Cooperation and strengthening trust with stakeholders, including policy makers, customers, suppliers, investors, and non-governmental organisations is needed," stresses NESTE Vice president for Sustainability.
Cooperation as a key towards a sustainable green deal
Along representatives of companies Neste, ORKLA, TietoEVRY, DINEX and IKEA, the participants of the forum, which took place online on 24 March, included Krisjanis Karins, Prime Minister of the Republic of Latvia, Stefan Eriksson, Director of the Nordic Council of Ministers’ Office in Latvia, Normunds Popens, Deputy-Director General of the Directorate-General for Regional and Urban Policy of the European Commission, Martins Zemitis, Economic Advisor at the European Commission, and Adriana Kaulina, Sustainability Officer from Swedbank Latvia.
Experience shows that not only big corporate giants, but also small and medium-sized businesses in Latvia can drive sustainability, innovation and green transition, says Roman Pyankovski, Head of Innovation for DINEX, which leading global manufacturer and distributor of innovative exhaust and after-treatment emission solutions for off-road and commercial vehicle industry. DINEX's experience is one of the examples confirming that companies in Latvia can also participate in the search and implementation of sustainable solutions and innovations, even with a forward-looking view and ambition of one employee, combining forces with equally enthusiastic teammates.
“Everything is based on people. Our company sets an example that even without significant resources and opportunities available we could start and effectively reduce CO2 emissions,” Pyankovski added.
Jointly looking for solutions to the transition to a greener economy in Latvia and the achievement of the objectives of the Green Deal, the forum participants agreed that cooperation at different levels, including companies, organisations, and institutions, as well as between countries and regions is of paramount importance.
“Cooperation with Latvian universities is an important factor in our development. In this process we are gaining an in-depth understanding of the situation, identifying errors, learning from them. Cooperation with suppliers, ministries, banks and other stakeholders is equally important for the development of a greener business,” Pyankovski said.
Examples of sustainability around us
By sharing their experience in implementing innovation and sustainable solutions towards a greener economy, the Forum's participants covered a number of business areas, giving interesting examples of how seemingly mundane things around us were successfully linked to the objectives of the Green Deal.
“IKEA inspires both buyers and its employees to live more sustainably and healthily, contributing to changing lifestyle habits with convenient and purse-friendly solutions,” says Peteris Grinbergs, Head of IKEA Latvia. An important strategic goal for the company by 2030 is to become a sustainable circular business by implementing furniture repurchase and buyer education measures, as well as introducing practical solutions at IKEA's Riga shop, such as using solar panels for water heating and rainwater for watering plants in the area.
In the new Orkla biscuits and waffles plant in Adazi, which will be the largest factory in the Baltic states and Scandinavia, various sustainability solutions are planned. Buildings and appliances will be highly energy-efficient, there are plans to use renewable energy in the plant, and gas cookers will be replaced by electrical ones. Orkla is gradually introducing the green economy objectives also in food production, for example by reducing the amount of sugar and salt, replacing palm oil with other oils, and using increasingly sustainable packaging.
Residents of the Norwegian town of Trondheim are using digital services and software products by TietoEVRY, enabling them to calculate their ecological “footprint”. “The app helps people adjust their spending and lifestyles to reduce negative environmental impacts, including CO2 emissions,” added Satu Kiiskinen, the company's managing partner in Finland.
Ambitious sustainable development goals must be set immediately
The experience of companies around the world shows that change is not a distant vision of the future, but a reality. Although lately we have often heard the word pandemic, climate change and sustainability remain a matter of concern that is still high on the agenda.
“Latvia has started its transition to a greener and more sustainable economy, but the biggest work is still ahead”, said Adriana Kauliņa, Head of Sustainability Development at Swedbank Latvia. She also added that companies should start to get acquainted with and assess their readiness to respond to changes in climate laws, technology, and market, in order to have enough time to find the best development strategies.
Economic advisor to the European Commission Representation Martins Zemitis advised companies to look at what was happening in the world and start with small steps, to look for solutions right now and take a step towards more green thinking. "The taxonomy, or the framework for classifying economic activities and businesses by their sustainability, is already demanded by investors and consumers. We cannot avoid change, it will inevitably come, so we have to take action now,” said Zemitis.
“If a medium or small company in Latvia wants to offer its goods and services and attract investors in the international market, particularly in the Nordic countries, it should start preparing for the new reality – investing in sustainability without greenwashing” – explains Maija Kale, advisor of the Nordic Council of Ministers' Office in Latvia, referring to the remarks made at the forum, that both large companies and public authorities are paying increasing attention in their procurements to the origin of products and their “ecological footprint”.
The Green Deal is a new growth strategy for the European Union, launched by the European Commission at the end of 2019. The aim of this strategy is to build a climate neutral, fair, and prosperous society with a competitive and modern economy. At the end of 2020, all EU member states agreed on more ambitious climate objectives. In particular, to reduce carbon dioxide significantly (by 55%) by 2030 to achieve climate neutrality by 2050 in line with the requirements of the Paris Agreement.
“In order to achieve the ambitious objectives of the Green Deal across the EU, politicians, entrepreneurs and the society must have a common understanding of the important role of this paradigm change”, said Normunds Popens, Deputy-Director General of the Directorate-General for Regional and Urban Policy of the European Commission. He also added that the EC is actively working on building new support instruments, and that also in the coming years a large proportion of the EU budget will be geared towards the transition to a greener economy. The European Green Deal is based on the European Climate Law, the EU Biodiversity Strategy, the EU “Field to Table” strategy, the EU industrial policy strategy and sustainable financial regulation, and other legal acts.