Reflections on sustainable value creation
Interacting with our partners is a great inspiration for the DIG research agenda. This blogpost reflects on our latest corporate workshop on the topic of sustainable value creation, organized in cooperation with DIG partner KPMG.
Carl Christian Christensen who is head of KPMG ESG Advisory, opened the workshop by sharing some perspectives on business and sustainability.
Sustainability and ESG are two related concepts, but there are clear distinctions between the two that are more and more apparent as businesses become more aware and maybe mature in meeting the challenges of sustainability.
“ESG refers to a set of criteria that investors use to evaluate the performance of a company in terms of it’s environmental, social and governance practices”. Sustainability on the other hand has a broader meaning “that encompasses company’s impact on the environment, social an economy over a long term”.
In other words, sustainability is the practice of operating a business in a way that meets the economic, social, and environmental needs often measured using ESG benchmarks and metrics. Sustainable business faces the challenges and needs in developing and offering more sustainable products or means in developing and delivering products and services.
The increased demand from both consumers and society in its whole, urges business to change and encompass sustainability in a broader sense – part of the DNA and not a strategy for itself!
Sustainable business models
Tina Saebi and Magne Engelshaug, both researchers at NHH and part of the DIG program, presented their research on sustainable business models – “the hard truth about sustainable business models”.
Why do companies struggle to adopt sustainable business models? From their research, Tina presented the following reasons:
- Unclear what sustainability means to the organization
- Treating sustainability as an add-on practice
- Internal barriers: No room for experimentation and failure
- No clear measurement tools for the sustainable business model
- Customers might not care about it
Circular business concepts in a B-B market
In the second part of the workshop, Kia Luise Klavenes Head of ESG Strategy & Transformation at KPMG, stated the need for circular business transformation. Companies are facing key challenges that a circular economy can help solving by focusing on circularity in all parts of the value chain. To elaborate on these challenges, we had the pleasure of hearing from two companies how they are developing circular business concepts and models as well as some cases KPMG is engaged in.
Zirq solutions – CEO Thomas Mørch shared a very interesting story on the devolpent of circular business concepts at Zirq solutions, a company within the NG Group (Norsk Gjenvinning). Through innovative and industrial solutions, they are solving recycling of complex waste streams – it is very much about taking waste and turning it into resources. Zirq Solutions is an accelerator of the circular economy operating within two areas, cable and medical waste. Who would imagine that waste from millions of medical devices could be transformed to be used in producing plastic for high-end furniture!
Glamox – Chief Growth Officer & Head of ESG Viktor Sødeberg shared how Glamox is “creating light for a better life” where they provide sustainable lighting solutions that improve the performance and well-being of people. They accomplish this by reducing energy consumption as well as operating cost. Viktor shared Glamox Circular design principles and how they “turn the pyramid upside down” where re-use is the ultimate objective of their circular strategy.
The case of the control tower at Oslo Universitetssykehus was presented by Kjartan Klyve at KPMG, where the objective of the project is to increase the efficiency in planning. Through complex algorithms the hospital’s objective is to enhance the planning process to increase the quality and response time for patients, as well as to increase the efficiency on use of resources.
Smart Water was the final case by KPMG. The aim of Smart Water is to develop and support smarter solutions, automation and optimize resource consumption. Clean water, nr 6 UN sustainable goal, is pressured through both external and internal forces. Through creating smart infrastructure for data-platform and applications the goal is to enable new services that will allow for better control, preventions of failures, forecasting and real time monitoring – individually and together will give us cleaner water.
An exciting and inspiring workshop ended with a panel discussion. The key take-away from the discussion is that having a “sustainability strategy” is out-dated – sustainability needs to be at the core of every aspect of a company’s strategy.