Kaisa Lipponen, Senior Vice President for Communications and Sustainability at international food and beverage giant Paulig has worked extensively in the area of sustainability. We sat down to talk to her about how corporations are redefining sustainability and what this means for society at large.
Sustainability is at the centre of everything we do, and we aim to evolve further. What is the core meaning of sustainability for you?
To me personally, it means that I try to live in a way that enables a healthier planet for future generations. This took on new meaning for me when I had my first child six years ago. I try to make sustainable choices in my life. I don't eat any meat and I choose products that have a smaller environmental footprint. I try to consume less and recycle. For me, sustainability is more of a mindset than a choice.
This change in mindset is happening at a corporate level as well as at a personal one. Paulig has been expanding its approach to sustainability. What triggered this change?
Paulig is a family-owned company that has been around for 145 years. The owners have always followed responsible business practices. In the past, our focus has been very much on social responsibility, sustainable supply chains and being a good corporate citizen in the communities where we operate. But now, we are expanding our thinking even more. It's no longer enough to just do less harm. We have to actually try to regenerate and do things that can have a positive impact on our planet and people. This is the way the UN Sustainable Development Goals have been designed, and it's what our customers and consumers increasingly want from us. For us, it has been a shift from focusing on one topic to creating a more comprehensive approach and looking at the impacts we have on the planet and people and society.
Recently, there's been a lot of discussion about shareholder capitalism versus stakeholder capitalism. What in your view is the moral obligation of companies to lead this process of being sustainable?
Companies can and should participate in regenerating the planet and society. We as companies have the resources and the innovations do so, and it is in our best interests. After all, there is no business on a dead planet. If we as companies don't do anything to reduce emissions or improve our products, then I think regulation needs to step in, but it's better to be proactive.
A global corporation has to be mindful that sustainability can mean different things in different countries. How can we strike a balance when mapping our sustainability plans?
I think this is a very important point. In places like Finland and the Nordic countries and other European countries, we are very advanced in our plans and are already talking about carbon neutrality and circular economy. But Paulig has many operations in developing countries, and there, people are more interested in if they have enough money to feed their kids. I think that the key is to do very close collaboration with your stakeholders in all countries and listen to their needs and concerns.
About a year ago, I visited some of our coffee origin countries – Guatemala and Costa Rica. I went there with the idea that I was going to talk about how we can achieve carbon neutrality in coffee. But then when I talked with our suppliers and with the farmers, their biggest concern was not how to reduce emissions in coffee farming, but how to ensure their own livelihood and the livelihood of their communities.
By understanding these different points of view, I think it's possible to take an approach that combines both interests. For example, by helping farmers adopt more sustainable practices, they can get more income and also reduce the impact on nature, which is a win-win.
How have sustainability-related commitments from companies changed over the years?
I think one of the big changes is that sustainability has become part of the strategy in many companies, which means that the sustainability commitments are defined and approved in the boardroom. It also means that sustainability-related performance is reviewed on a regular basis.
Another big thing is that companies are setting transformational, long-term commitments that extend very far, even beyond 2030. They understand that systemic change will require a lot of time, but they are courageous enough to set the direction and start working towards those commitments.
In terms of Paulig in particular, do you have any examples of this change?
We renewed our sustainability approach about a year ago and now it is very much based on science and data. We wanted to understand our impact on the environment, on people and on society. We did a lifecycle analysis of the of the carbon emissions of the entire company, and we set science-based climate targets. Then, we looked at the overall net impact of the company. We used data to define the right focus areas for us, and we set a strategic ambition for 70% of our net sales to come from products and services that are good for both people and the planet by 2030.
This is really a commitment that sets a direction for our growth and development as a company. Now we have integrated these sustainability initiatives into our business strategy and the leadership team is accountable for delivering on the targets.
Let's talk about the criticism about around greenwashing that companies are facing today. Do you think that this discussion will distract us from what we really are trying to achieve?
I think that there should always be the right balance between what you say and what you do. You cannot just talk about sustainability if you don't have real actions behind that, but on the other hand, you cannot just trust that that the sustainability actions speak for themselves. You need to inspire people to change. Companies can have a huge role here. It’s both about doing the right thing and also inspiring people with sustainability communications.
I'm sure you agree that we all need to team up with each other to make our footprint larger and more meaningful, but the key question is, how do we do this? How can corporations work together to create a sustainable society?
I think that change really requires cooperation and we can only deliver real transformational change if we join forces with others. There are different approaches you can take, but where I would probably start is taking a look at your own value chain and see how to align your targets with your suppliers, customers, partners and other stakeholders. I think you will certainly find common challenges and opportunities.
Another way to look at it is to work together with your peers. In many industries, organisations are gathering around the same challenges and trying to solve them.
And then, of course, the third option is to look beyond your most evident partners and explore.
For example, Wärtsilä and Paulig are showcasing a project incorporating Power-to-X technology, where coffee is brewed using synthetic fuel made from indoor air.
Currently at Paulig, we don't have a program in place to systematically work with other companies across industries, but we are working with many, many universities and research institutions and also companies on a more on-demand basis. We also have our own incubator called PINC, which is our venture arm. Through that program we are collaborating with start-ups around food, the food industry and sustainability. Recently, for example, we invested in Kaffe Bueno, which is a start-up that is upcycling our coffee waste into high-quality raw materials for cosmetics. I think that very surprising collaborations and partnerships can be found in the area of circular economy.
Looking at 2021 and beyond, what are the three key trends in sustainability going forward?
I’m really an optimist, so I think that this decade up to 2030 will see exponential growth in sustainability. First, the pandemic will give a big boost for clean recovery. As we know, the EU Green Deal is really boosting investments into renewables and sustainability across sectors. And the Glasgow climate summit towards the end of the year will keep that topic on the top of the agenda.
Another of the big changes we will probably see in this decade is that millennials will increasingly be part of the decision making, and they will be making sustainability a mainstream topic.
One other thing to consider is what technological developments will enable in this field. I think that many things will look completely different 10 years from now.
