How the private sector adapts?

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Jesse Waters
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1 Sustainable society and environmental challenges: How the private sector adapts? HENVI Science Days Tapani Järvinen Chairman of the Cleantech Finland Business Forum

2 The challenges of a sustainable society A low-carbon and resource-efficient economy by 2050: Carbon dioxide emissions near to zero Sustainable and efficient use of natural resources Society at large and all of its functions must go green : including food production, living arrangements, mobility, communication, recreation, water and waste management, as well as industrial processes, products and machinery required to meet different societal needs etc.

3 Companies are becoming greener Companies have paid attention to the environmental impact of their operations for several decades already Today, environmental aspects are: included in corporate strategies and form an integral part of all business operations addressed according to life-cycle thinking throughout the production chain taken into account across the entire network of operations also part of management expertise and the professional skills of the personnel.

4 and provide green solutions In addition, a growing number of companies practice green business or cleantech, ie i.e. offer products, processes, equipment, services or business models by which the environmental impacts of other companies, the public sector or consumers can be reduced. Green solutions are being developed across all sectors.

5 Clean technologies guarantee competitiveness Environmental soundness is prerequisite for the license to operate. Environmentally sound process solutions give reliability, availability, maintainability and safety for the operations Trouble-free production ensures constant and effective production Better reputation ti and shareholder h value with sustainable technologies. Profitability and environmentally sound technologies can go hand in hand.

6 Competitiveness of a producer: Environmental profit Benefits With new technologies it is possible to utilize the potential in full licence to operate effective use of raw materials lower energy consumption lower water consumption less emissions better reputation and shareholder value better employee safety >> cleaner world win-win area Environmental performance L. Lankoski: Determinants of Environmental Profit, Helsinki University of Technology 2000

7 Competitiveness of a technology supplier Industry needs more efficient and clean production methods >> new business opportunities Technology supplier must be proactive Developing better technologies brings competitive advantage today and in the future It is not enough to develop clean technologies, but both economical and ecological criteria must be fulfilled Only those technology companies survive in the long run who deliver sustainable technologies

8 Adding environment to the competitiveness equation does not hinder growth, on the contrary, it can be a booster for competitiveness and economic growth.

9 EUR billion Global market volume of cleantech expanding 2020 (growth ) 2010 (growth ) Waste Mobility management and recycling Source: Roland Berger 2009 (Greentech 2.0) Material efficiency Power generation Water management Energy efficiency

10 Finnish cleantech strongholds The strengths of the Finnish economy have traditionally been based on our natural resources: forests, waters and mineral resources. Well-known Finnish products and technologies include, for example: sustainable technologies and solutions for minerals and metals processing, energy efficient industrial processes, bioenergy boilers, frequency converters, wind power components, clean transportation fuels, water purification chemicals, waste management systems, monitoring equipment and ICT.

11 Characteristics of the Finnish cleantech sector Approx companies, some hundred of which globally competitive. Turnover more than 16 billion Euros. A number of companies have modified their existing operations to better respond to the growing g demand for green business. Some have made significant strategic choices towards this direction. Many large Finnish companies products are already today to large extent classified as Environmental Goods and Services (by OECD definitions), examples: Outotec, Metso, Wärtsilä, etc. The sector is experiencing strong growth in Finland new startups are emerging. Primary export countries include Germany, China, USA, other Asian countries, Sweden and Russia. India growing in importance Tapani Tekijä Järvinen

Sustainable products and services, Outotec example

Environmental Goods and Services (by OECD

They: Reduce the need of natural resources, energy

Are process-integrated environmental and energy

12 Sustainable products and services, Outotec example 63% of Outotec s technologies are classified as Environmental Goods and Services (by OECD definitions). They: Reduce the need of natural resources, energy and water Reduce negative environmental impacts Are process-integrated environmental and energy solutions Social responsibility and work place safety on a high level Well-being of employees is important

13 Great global potential for Finnish cleantech expertise By offering environmentally sound products and solutions worldwide, Finnish companies can reduce global environmental impacts far more than if the benefits were limited to Finland alone. Global business opportunities for cleantech are huge and Finnish companies are well positioned however, competition in green gee markets is intense. To succeed in global markets, cleantech companies require the same prerequisites for success as business in general. Many companies active in environmental business in Finland are small in size: cooperation through different networks and clusters is essential.

14 The prerequisites for [green] business Expertise Markets Green business Cost competitiveness

15 Cooperating with universities and research institutes green skills and know-how needed in all businesses Green skills and know-how are required within all types of businesses. Can be understood as: 1) special expertise in environmental issues 2) part of all professional skills and know-how. Education plays an important role in achieving the level of green skills and know-how required in businesses A good way to enhance this is to promote co-operation between educational establishments and enterprises. Alongside environmental expertise, entrepreneurial, business and innovation skills are also crucial Listening i to customers, markets and authorities is important t

16 Cooperating with universities and research institutes eco-innovations are created in networks Eco-innovation = environmentally friendly products and services, eco-efficient efficient production methods and processes, and new innovative ways of thinking, organising and operating Eco-innovations are created in interactive and multidisciplinary processes that involve ever expanding networks. Research institutes and universities are often important co- operation partners for companies in the early stages of an innovation. Many companies active in environmental business are small in size. Networks and clusters offer fruitful co-operation platforms especially for SMEs. Examples: Strategic Centers for Science, Technology and Innovation (SHOKs), Center of Expertise Programme OSKE (Finnish Cleantech Cluster)

17 Tools to promote Finnish environmental expertise Cleantech Finland Business Forum: an informative and interactive platform for companies and other organisations in the Finnish cleantech sector. Cleantech Finland brand: aims to enhance the exports and internationalization of Finnish cleantech companies.

18 Concluding remarks To respond to modern-day environmental challenges, society at large and all of its functions must go green Companies play an decisive role by improving the environmental performance of their operations offering green solutions for consumers and citizens Adding environment to the competitiveness equation does not hinder equitable growth, on the contrary, it can be a booster for competitiveness t e ess and economic o c growth. Finnish companies have solid environmental know-how and expertise for which there is a growing global demand To succeed in global markets, cleantech companies require the same prerequisites for success as business in general. Cooperation through different networks and clusters including universities and the research community is also essential.

19 THANK YOU FOR YOUR ATTENTION! fi

Finland is an economically and politically stable society and has been a member of the European Union since 1995.

Finland is an economically and politically stable society and has been a member of the European Union since 1995. The Finnish economy is knowledge-based and strong on innovation. The longstanding national