Nokia Siemens Networks

Environment: understanding the differences between trend and trendy.

Anne Larilahti and Andrew Clark from Nokia Siemens Networks discuss the relationship between business and the planet.

Anne, you have written elsewhere about the relationship between businesses and the planet – and how this relationship has changed in recent years. I wonder if you can explain to
our readers what you mean by this?

Larilahti: The main point that I would like to make is that we need to treat the planet as a stakeholder in its own right, and we haven’t really done this before. I think the reason we haven’t done this is because a stakeholder is someone with whom corporations have a two way dialogue, and with the planet it has been a one-way relationship. We exploited, more or less sustainably, but there wasn’t really a feedback from the planet or an understanding at the time.

But now the other direction is getting very clear and the impact of climate change on business is clear – rising material prices, for instance. Even insurance payments are getting higher in areas where we are preparing for increased flooding, so the relationship is clearly two-way. Traditionally, it was the non-governmental organizations that were speaking for the planet, and that is good – it’s important they continue to do so – but I would suggest that in order to be a truly responsible company you need to think about the planet directly, rather than relying on the WWF or Greenpeace to do that thinking for you.

Another thing that is important is that a company has to set its KPIs, so we are actually measuring our real impact on the environment. To give you an example a good KPI in my opinion is the CO2 emissions of the company. We should concern ourselves with our real impact on the environment, and not a subjective measure or ranking from outside sources.

Clark: And when it comes to KPIs, many organizations talk about them, but it’s very important to understand how credible they are – actually being able to show, in a constructive way, that you have done what you set out to do. And also that the KPI is relevant. Right now, at Nokia Siemens Networks, we are using KPIs to up the pace of environmental action and also to help us.

Larilahti: The ICT sector as a whole contributes about 2% of the world’s carbon emissions, and our first goal should be to make that percentage as small as possible – minimizing our own footprint and being as energy-efficient as possibly. But then the more important and bigger opportunity is what the ICT sector can offer the rest of the world to help reduce the other 98%. For example, aviation: more teleconferencing can help reduce the need for travel. And electronic files reduce the need for paper. Operational efficiencies gained by ICT can be many-fold. So that is where the real opportunity is, in my opinion.

Clark: You have made the business case and I think it’s also possible to speculate that there might also be a social dividend. With tele- and video-conferencing and other modern communications technologies, not only do you have a direct economic benefit but also you spend less time traveling around in cars, fewer accidents, less of a load on hospitals, a better quality of life. If you have a vision it is possible. Time will tell.

Larilahti: Yes, and telecommunications companies, in particular, can do a lot, because they have a direct relationship with consumers. So there is a lot of potential because consumers, we know, do care about environmental issues. For example, there was a joint project between Nokia and one of its customers in the UK, to ship phones without a charger. Many consumers have taken advantage of this because it costs less and they already have a charger – why get another one when you already have a Nokia charger? This is good for the environment, good for the consumer, and good for the CSP because it gave them a point of differentiation.

You hear a lot of people talking about how the credit crunch is forcing environmental concerns off the table for the time being, till businesses and governments fix the economy. Do you see this happening, or is this just the media creating a story where there might not be much of one?

Larilahti: We need to make a clear distinction here what we mean by “trend” versus “trendy”. The environment is not quite as trendy as it was six months ago. Now everybody wants to talk about the credit crunch, but the fact is that environmental issues, and scarcity of raw materials, and other issues such as these have not disappeared – they are still there.

These issues are not getting as much bandwidth as they did from the media, say, one year ago, and politicians, too, have talked less and less about the environment, but the issues, the problems, have not gone away. The credit crunch will come and go, but environmental issues will remain. So there is no change, really, other than a change in perception.

Clark: And, just adding to that, there is a sort of convergence as well. Because quite often good business sense – maximizing our profitability – goes hand-in-hand with good environmental practice. Many of our products are much smaller now, require less raw materials and are easier to recycle than their predecessors. They use less energy and improve efficiency. These are all good things for the environment, and they are good for business as well. The perception is that you have to pay more to be a good environmental citizen. But with smart thinking, actually being a good environmental citizen can be good for the bottom line. And I think there is an awareness of that – especially in the B2B marketplace.

Larilahti: Absolutely. We need to be clear that we are not only doing these things because we are good citizens but also because these activities improve our competitive position in the marketplace. This is something that we should not hide. Three years ago it may have perceived as wrong to combine financial and environmental arguments. In the end the planet doesn’t really care why we do good things for the environment, as long as we take action. That’s all the earth cares about.

And for us, the financial bottom line matters a lot. It’s like when you’re on the airplane, and you’re told to put on your oxygen mask before you help any other people. Our business needs financial health before it can make a difference to others.

And if you’re not financially healthy, you might cease to exist …

Larilahti: Exactly. And I think one of the subtle but very big changes that have happened in recent times is that corporations are not afraid to say this. It’s possible to have a good financial track record as well as a good environmental one.