Connecting sustainability and continuous

innovation: Successful sustainability strategies in mid-size Finnish

companies

Aleksi NeuvonenDemos Helsinkiwww.demoshelsinki.fialeksi.neuvonen@demoshelsinki.fiTwitter: @leksis

Tuuli KaskinenDemos Helsinkiwww.demoshelsinki.fituuli.kaskinen@demoshelsinki.fiTwitter: @tuulikas

Antti TarvainenAvantowww.avantohelsinki.fiantti@avantohelsinki.fi

Satu KorhonenDemos Helsinkiwww.demoshelsinki.fisatu.korhonen@demoshelsinki.fi

Research funded by Finnish Innovation Fund, Sitra

1983 2013 2043

Mid-size company economy

Green economy

We are witnessing a parallel evolution

1983 2013 2043

Mid-size company economy

Green economy

We are witnessing a parallel evolution

CSR originates from needs of global companies

Shared Value Porter&Kramer

Companies as Communities Mintzberg

Conscious Capitalism Mackey&Sisodia

Social Enterprises

Impact Investment

20 Finnish companies

10-700 employees

Annual sales <100 m €

Forerunners in some field of sustainability

Method: Analysis of public documents and interview with CEO/other high official from each company

Research methods

What motivates a mid-size company to adopt strategic sustainability?

How these companies expect to benefit economically from strategic sustainability?

Results:

Three questions which typically lead to the formation of a sustainability strategy:

1.How to manage and control for risks in the supply chain?

2.How to utilize factors of production more efficiently?

3.How to stand out from the competitors and create new markets through sustainable products and services?

Risk aversion

Cost- effectiveness Differentiation

Sustainability strategies of mid-size companies

!

In fact, also mid-size companies are employing sustainability as a resource for igniting strategic thinking and innovation.

There are more ways to incorporate sustainability into business models than just those of risk control and responsibility:

Conclusions:

1.Ownership matters: many family owned companies are willing to invest in long-term opportunities.

2.Leadership matters: sense of belonging, purposeful work, co-creation with stakeholders, employee engagement => better productivity

3.Benefit gap: Surprisingly few companies are capable of moving from one sustainability strategy to another

4.Need for new tools: Existing sustainability tools and standards don’t necessarily serve well the most innovative, megatrend driven mid-size companies.

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