Nordic companies prove doing good is good for the bottom line

copenhagen2

Copenhagen, Denmark (Ava Coploff, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Wendy Woods, Senior Partner and Managing Director, Global Leader, Social Impact Practice at The Boston Consulting Group


The Business Roundtable, which represents many of the largest US-based companies, surprised a lot of people when it publicly endorsed the idea that, in addition to shareholders, corporations have obligations to a wide range of stakeholders, including employees, customers, suppliers, the communities in which they operate and society at large.

This marked a rhetorical shift for the organization – and the timing couldn’t have been better, coming less than a month before the UN General Assembly, as well as the UN Climate Action Summit, the UN Sustainable Development Goals Summit and the World Economic Forum’s Sustainable Development Impact summit.

What is the World Economic Forum’s Sustainable Development Impact summit?

It’s an annual meeting featuring top examples of public-private cooperation and Fourth Industrial Revolution technologies being used to develop the sustainable development agenda.

It runs alongside the United Nations General Assembly, which this year features a one-day climate summit. This is timely given rising public fears – and citizen action – over weather conditions, pollution, ocean health and dwindling wildlife. It also reflects the understanding of the growing business case for action.

The UN’s Strategic Development Goals and the Paris Agreement provide the architecture for resolving many of these challenges. But to achieve this, we need to change the patterns of production, operation and consumption.

The World Economic Forum’s work is key, with the summit offering the opportunity to debate, discuss and engage on these issues at a global policy level.

Most businesses, in the United States and elsewhere, have been aware of these societal obligations for years. While senior executives want their companies to play a larger role in meeting society’s challenges, some are reluctant to go all-in, knowing at the end of the day they’ll be judged on their earnings, not their yearnings.

The truth is they can succeed in both areas, which tend to complement one another. Recent research shows that companies that have a positive impact on society tend to do better financially than those that side-step or downplay their social responsibilities.

Among the best in this regard are Nordic companies – those domiciled in Norway, Sweden, Denmark and Finland.

Boston Consulting Group (BCG) recently analysed the performance of 8,000 public and private companies worldwide on environmental, social and governance (ESG) issues. Companies were then divided into five clusters based on ESG performance.

More than 400 Nordic firms – about 5% of the total – were part of the review, including well-known companies, such as Electrolux, Ericsson, Maersk, Nokia, SAS and Novo Nordisk.

As a group, the 400 Nordic companies scored considerably higher, on average, than the rest of the sample, with 65% ranking in the top quintile on ESG performance. By comparison, 41% of other European companies and just 9% of North American companies made it into the top group.

Total Societal Impact (TSI) of companies by region.

Contrary to the concerns we sometimes hear from corporate executives and governing board members, the Nordic companies’ achievements in the ESG sphere didn’t come at the expense of financial success. In fact, our analysis found the Nordic 400’s market valuations and total shareholder returns were “in line with those of the overall market”, confirming that businesses that align their strategies and operations with society’s needs can do well, while doing good.

But why do Nordic companies in particular have such an outsized impact on society? Why are they, more than many others, taking action to meet the challenges of climate change, income inequality, disease and famine, human rights abuses, and other pressing global concerns?

While there are many answers – investor demands, Nordic culture and government policies, among others – one of the most critical is leadership. As a group, their board members and CEOs are committed to such actions.

For example, we found Nordic CEOs and board members are highly active in many of the international organizations and global initiatives aimed at bettering society, often serving in leadership positions. For example, leaders of 13 large Nordic companies and a global trade group – GSMA, or Groupe Speciale Mobile Association – have formed Nordic CEOs for a Sustainable Future, “focused on promoting new, sustainable business models”. The membership reads like a “who’s who” of the Nordic corporate community.

Mobilising Action for Inclusive Societies

Recent years have witnessed some of the largest protests in human history. People are taking to the streets amid a desire for change, putting pressure on decision-makers for urgent and courageous leadership to find sustainable and inclusive solutions to some of the major challenges ahead of us.

A range of forces are at play. By 2022, some 60% of gross domestic product will be digitized – but current education systems are failing to prepare people for decent work in this future. Based on current trends, it will also take approximately two centuries to close the global economic gender gap. Meanwhile, the world’s richest 1% are on course to control as much as two-thirds of the world’s wealth by 2030.

To tackle these challenges, Mobilising Action for Inclusive Societies is one of the four focus areas at the World Economic Forum’s 2019 Sustainable Development Impact summit. A range of sessions will bring stakeholders together to take action that will bolster local entrepreneurship and innovation, while making growth more equitable.

BCG’s experts see the Nordic companies as exemplars not only because they are openly and actively committed to the betterment of society, but also because they’ve built these concerns into their company cultures, their core business practices and their company operations. This includes looking for ways to improve the positive societal impact of existing products or services, as well as leveraging technology and capabilities to venture into new businesses.

This is not to say there aren’t companies in the rest of the world also focused on – and successful at improving – society while still being financially successful. There are many such companies and their numbers are growing each year.

Yet all companies, regardless of where they operate, can learn from and adapt Nordic best practices to their own businesses and political environments. By doing so, they can help solve some of the world’s most pressing problems, while still enhancing their performance.

The Business Roundtable statement acknowledges the societal impact businesses can have. But actions speak louder than words.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

MEPs propose measures to combat mobbing and sexual harassment

EU Commission: The banks are not obliged to finance the real economy

How much more social deterioration can the EU people endure?

ECB guarantees the liquidity of the Atlantic financial volume

Only the Americans are unhappy with the ceasefire agreement in eastern Ukraine

UN rights chief welcomes new text to protect rights of peasants and other rural workers

Khashoggi case highlights ‘very worrying practice’ of overseas abductions, says UN expert

Security Council urges ‘maximum restraint’ around Gulf region as Iran and United States trade diplomatic blows in New York

Three ways Finland leads the world – and education isn’t one of them

Siemens-Alstom merger: Can Germany and France lobby to circumvent EC’s rejection, against EU consumers’ interests?

Trade barriers: EU removes record number in response to surge in protectionism

G20 LIVE: “United States and Turkey stand in solidarity with France and its people in handing the perpetrators of this crime and bringing them to justice”, US President Barack Obama underlines from G20 in Antalya Turkey

Kazakhstan continues to push for a nuclear-free world

Germany’s strong anti-bribery enforcement against individuals needs to be matched by comparably strong enforcement against companies

Afghanistan: Bring ‘architects’ of latest ‘appalling’ suicide bombing to justice, says deputy UN mission chief

Drones are saving lives in Tanzania’s remote communities

Reusable packaging: 6 benefits beyond sustainability

Finland has giant supermarkets that only stock second-hand goods

Macron leads EU-wide minimum wage call as Merkel, Medvedev warn of global injustice

Action needed to end deadly clashes between African herders and farmers: UN chief

Eurozone: Even good statistics mean deeper recession

Court of Auditors: EU budget money is there to be spent not to create value

International Literacy Day: What you need to know about youth literacy

What does Tsipras have to offer to the rest of Europe? Is it worth an early advance of €10 billion? Berlin sturdily denies it

New Zealand will have a new ‘well-being budget,’ says Jacinda Ardern

Hate speech exacerbating societal, racial tensions with ‘deadly consequences around the world’, say UN experts

Why financial services can kickstart Africa’s digital economy

Where are the charities in the great Artificial Intelligence debate?

Is your smart home as safe as you think?

DPRK reports ‘little progress’ since historic June 2018 summit with US

EU security and defence industry prepares positions for ‘producers’ and ‘customers’

6 facts to know about EU alternative investment funds

European Union supports survivors of sexual violence in conflict

3 unexpected consequences of the US-China trade war

Mergers: Commission approves the acquisition of Flybe by Connect Airways, subject to conditions

EU to give more power to national antitrust authorities in a bid to secure regulatory fines

What is inclusive capitalism, and why does it matter?

Peacekeeping chief highlights challenges facing UN Police

This is how social media giants are helping stop the spread of measles

The EU’s trading partners: US, China and the rest

China has made a shocking food production discovery – electro culture

Did young people just kill television?

Parliament to ask for the suspension of EU-US deal on bank data

New legislation on transparency and sustainability of the EU risk assessment model in the food chain

When will Eurozone’s unemployment rate stop being Europe’s worst nightmare?

COP21 Breaking News: Paris Pact on Water and Climate Change Adaptation Announced

Earth already has a perfect recycling system. So why not use it?

Drinking water: new plans to improve tap water quality and cut plastic litter

Gaza: deadly violence continues to escalate, top UN officials work to restore calm

Seven trends shaping the future of the mining and metals industry

Why is the EU launching a doomed policy in stopping immigrant waves? What are the real targets?

EU to relocate 40,000 migrants across the bloc: first step of a long due substantial reform?

China hopes EU Commissioner De Gucht drops super anti-dumping tariff on solar panels

Medical students: The need for emigration

Nuclear test ban treaty critical to global collective security – UN chief

Few countries are pricing carbon high enough to meet climate targets

Hollande protects the euro from the attacks of extremists

A shocking new report reveals what we’ve done to the natural world

US cities are going to keep getting hotter

Does research make sense any more? The dire need for new ways to measure success

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s