Profit and preservation: Swedes lead by example

Date: 16/07/01

Gareth Harding reports on how Sweden combines business success with a responsible attitude towards green issues

IF YOU don't like forests it's probably not a very good idea to go to Sweden. Half the country is covered in trees and the Swedish people have an emotional attachment to the woods which is almost pantheistic. Yet it hasn't always been this way. By the end of the 19th century, the forests of southern Sweden had been decimated by unscrupulous loggers and it was only when the government passed a law requiring foresters to replant trees that the woods began to fight back.

Frederik Thorstensson is a young forester who owns 131 hectares of land south of Göteborg. Although he struggles to make a decent living from timber sales, he knows that he can't just clear-cut the forests which surround his house. "If I did that I'd certainly earn more money in the short term," he says. "But the Indians have a saying: we don't own the land; we just borrow it from our children. I agree. If I cut down all the forests, I would leave a desert for my children."

While Europe's leaders were struggling to put sustainability at the heart of the EU's policies at last month's Göteborg summit, foresters such as Thorstensson have been busy putting it into practice for decades.

Thorstensson sells his wood to forestry giant Södra, which insists that all the timber it buys meets stringent environmental standards.

So he is obliged to plant mixed forests, set aside at least 57 of his land for nature conservation and draw up a green forest management plan. Södra knows that in the long term, making sure owners certify their forests will not only boost the company's credibility, but will lead to increased profits.

This is certainly the view at Stora Enso's gigantic Hylte mill, where much of Södra's wood ends up. During the 1960s and 1970s, environmental campaigners such as Sören Cabell accused the company of polluting the local river with waste water run-offs. "It was a stinking sewer," says Cabell, "but now you can fish salmon in it and the director of the mill has promised to drink the river water."

The Hylte mill is the biggest in Europe, producing 87 of the continent's paper. True, a truckload of wood arrives every 15 minutes to be fed into the pulp-producing machine, but half of the raw material is recycled newspaper from all over Europe. "Recycling is economics," says Stora Enso's Karin Almryd. "It is cost and raw material efficient, market-driven and industry-led. It's in our own interest."

Enlightened self-interest is probably the best way of describing Swedish industry's approach to the environment. Electrolux CEO Michael Treschow believes that no matter how green a product is, "if it doesn't combine with business success, it is difficult to drive it".

With more than 57,000 employees and 55 million electronic goods in circulation, Electrolux cannot afford to see its share of the market dip.

But Treschow firmly believes that it is possible to sell mass-produced goods which do little harm to the environment. The latest Electrolux fridges use as much energy per hour as a 15-watt light bulb and its 'smart' lawnmowers run on solar power - which might seem perverse in sun-starved Sweden. "Are we just doing this for fun, to enhance our image?" asks Treschow. "No. We can prove to ourselves that we can sell more and more green products and bring in more and more profits."

The figures speak for themselves. In 1997, green products accounted for only 57 of Electrolux's range. Last year, they made up for 147 of sales. Sweden's firms have long been in the vanguard of environmental thinking. Volvo introduced three-way catalytic converters a quarter of a century ago and companies such as Skanska are leading the way in erecting energy-efficient buildings. But this does not mean that the Confederation of Swedish Enterprise is enthusiastic about ever more stringent EU environmental laws. "One thing is clear: regulation and legislation will not in themselves create sustainable development," says chairman and former Volvo CEO Sören Gyll. "Our experiences so far are that market-driven solutions can achieve tangible results far more quickly than regulatory approaches." When it comes to looking after the environment, Swedish firms can generally be relied on to take the initiative.

But the same cannot be said of companies from other European countries that have fought tooth-and-nail against proposed EU environmental legislation.

Swedes are often accused of taking a 'holier-than-thou' approach to environmental issues. Now there is nothing wrong with trying to be saintly.

The only question is, what to do with the sinners?

Report on how Sweden combines business success with a responsible attitude towards green issues.