Sustainable Development Impact Summit – 23-24th September 2019 - New York, USA
Nordic Region companies lead the way in ethical and sustainable business
The Sustainable Development Impact summit is the World Economic Forum’s annual meeting for integrating and leveraging the best examples of public-private cooperation, systems thinking and Fourth Industrial Revolution technologies to develop the Sustainable Development Agenda.
Nordic companies prove doing good is good for the bottom line
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.
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, the 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?
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.
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.
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