Some 58 companies, at a combined value of almost 600 trillion Swedish crowns, collectively employing almost 100,000 people. When it comes to investment power, the Swedish government has substantive influence over the Scandinavian marketplace. Its Minister for Financial Markets has recently decided to flex his owner-muscles to ensure that sustainability strategy finds a permanent place on the corporate board agenda. With its fire-power, the Minister’s move is bound to change the conversation in the country’s boardrooms.
This government prides itself on its vision of sustainability and has long touted business partnerships to achieve it. It has been using its role as regulator and motivator to help transform the marketplace with some degree of success. Laying out clear rules is something Swedish government does rather well. But obviously, more needs to be done.The Swedish way of tackling corporate sustainability challenges has always been the systematic way—relying heavily on management systems and standards. This work seldom reaches the ears of board members. While UK companies like BT, BP and Unilever have oversight on sustainability strategies at board level through their countless CSR and social and environmental accountability committees, competence in this area is sorely lacking on C-Suite levels in Sweden. That’s something that the Swedish government intends to change.
A couple of months ago, Peter Norman, Minister for Financial Markets, tasked all board chairs, CEOs and sustainability managers at state-owned companies to set relevant sustainability goals by 2014 and develop strategies for meeting these goals. The announcement signaled that the government intends take a proactive stand to raise the competence bar among board members.
With a few exceptions, this country’s companies still focus too heavily on process and performance measurement—a recipe for risk management. But times are changing the corporate landscape. Bold leadership and forward-looking strategy are key ingredients for value creation. Without a doubt, this is an initiative that makes perfect sense for any long-term investor.