Swedish Multinationals and Sustainable Innovations for Transformation: The Doughnut Model^*

Abstract This qualitative study explores how multinational enterprises (MNEs) approach sustainable innovation through the lens of theory and doughnut economics. The proposes a conceptual framework to evaluate practices businesses findings illustrate occurs within two MNEs. Based on interviews with professionals Swedish MNEs, responsible for sustainability, examines innovations lead redesign core business pillars transforms operating market MNE. Overall, this makes theoretical contribution by formulating an application Raworth’s (2017) model strategy. It also provides practical insight into dynamics innovation, which aims inform inspire further progress in development academia. Keywords Sustainability Innovation Sustainable Doughnut economics Multinational Regenerative Citation Ghauri, S. (2023), "Swedish Multinationals Innovations Transformation: Model*", P.N., Elg, U. Hånell, S.M. (Ed.) Creating Competitive Position: Ethical Challenges International Firms (International Business Management, Vol. 37), Emerald Publishing Limited, Bingley, pp. 129-152. https://doi.org/10.1108/S1876-066X20230000037008 Publisher: Limited Copyright © 2023 Saad Ghauri License work is published under Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate create derivative works these (for both commercial non-commercial purposes), subject full attribution original publication authors. terms licence be seen at http://creativecommons.org/licences/by/4.0/legalcode. Introduction chapter has been developed from thesis: Doing Exploring How Develop Drive Transformation. School Economics Lund University. In 1987, Brundtland Commission Report defined as one ‘that meets needs present without compromising ability future generations meet their own needs’ (United Nations, p. 37). Humanity today consumes equivalent 1.7 planets provide resources necessary produce goods absorb waste (Global Footprint Network, 2020). We are already experiencing threats human lives natural habitats climate crisis, primarily due excess carbon emissions mismanagement resources. causes consequences often interlinked but impacts far reaching. development, therefore, requires governments, citizens act make systematic changes reduce emissions. mindset shift, organizations individuals need consider impact across interests all stakeholders. Topple et al. recognize importance private sector solving challenges, MNEs particular, considered powerful actors that can play role addressing sustainability (Ghauri al., 2021; Wood 2021). Caiado (2018) highlights lack clarity understand mechanisms, measurements tangibility achieving sustainability. Although research specific topics, such corporate social responsibility, environmental ethics present, there little support strategy overall Christ Burritt (2019) argue field engagement academics generate knowledge area. recent conception Raworth adopted some policymakers safe space humanity developing strategies seek societal needs, planetary boundaries (O’Neill 2018). stresses decision-making improve society ecological limitations ensure humanity. instrumental expanded propose pillars, purpose, governance, networks, ownership finance (DEAL, support, Roggema Dobbelsteen (2012) emphasize transformative needed change. While principles conducted develop theories combine innovation. seeks offer strategy, supported adaptation established theory. There pressure deliver positive wider stakeholders (Webb 2010). led precedence or guidance. Attempts towards faced criticism being incremental, low even superfluous disingenuous. A guidance, transparency, insufficient global coordination, fear failure financial pressures hamper ambition progress. several studies now available innovations, most exploratory nature solid underpinning. Through lenses – aim understanding multinationals whether those transformation. will contribute gap MNE-led efforts, well insights practitioners who development. focusses following questions: Whether companies working not? innovations? What dynamic challenges face while pursuing innovation? Theoretical Background Development process Multiple definitions interpretations exist academic literature. Schumpeter (1934) it creation new combinations, characterized its application, invention process. Bozeman Link (1983) discuss something new. Siegel (2007) interpretation technology represents definition nuanced debated, context study, simplified represent new, closer (1934). considers not only tackle grand facing our viability reality. Porter (1990) discusses ‘a company should out challenge’ achieve competitive advantage (p. 585). Cheam (2015) goes form organizations. important what achieve, Chaminade concepts different levels relevance Firstly, weak addresses actions innovate maintaining economic growth use compensate any losses capital. address immediate reducing negative planet (Chaminade Yet, tackling just fail acknowledge detrimental excessive production, consumption growth. contrast, strong looks radical change, advocating transformation existing systems experimentation, directionality, demand articulation learning. Such total models (Raworth, 2017), action required way supports live 2018; Chaminade, Several have attempted explain change terminology Grin (2010) frame transition pathways, representing diversion system. differentiate between incremental where small occur slowly over time. Transitions could subsystems, whereas transformations multiple socio-technical (Hölscher Kriegler determine approaching transformational aims. Geels’ (2002) multi-level perspective acts relevant consideration context. represented three central layers system: ‘regime’ environment, ‘landscape’ external ‘niches’ spaces experimentation interact regime. regime status quo system encompasses variety properties, infrastructure techno-scientific culture sectoral policy. Landscape developments signify factors influence regime; however, and/or engage externally instigate landscape then go applied regime, suggesting two-way flow impact. Combining literature discussed above, occurs. combination transitionary time, rises occurring niches able successfully disrupt (Geels, 2002). driven MNE’s incumbents resistant disruption regimes. pressures, beginning anticipation disruptions. These range regulation, changing landscapes shifting values Today, significant influencers attempts economic, (Van Zanten & Van Tulder, Rockström (2009) outline nine interdependent processes Earth respective sustain humanity, ocean acidification, ozone depletion, biogeo-chemical flows, freshwater use, land-system biodiversity loss, chemical pollution atmospheric aerosol concentration. first seven currently quantifiable scientific guidance health planet. For example, key boundary exceeded boundaries: climate, acidification (Steffen 2015). overshoots overconsumption continue accumulate and, result, place (Carpenter Bennett, 2011; 2009). inner ring doughnut. indication resource deficiencies well-being, education, energy equality 2012). Mapping together thrive sustainably inclusively. ‘the doughnut’ identify navigate 2018) (Fig. 1). economies citizens. Opens window.Fig. 1.The Doughnut. However, ambitions done apply practices. outlines operate economy transforming regenerative models. behaviours responses mapped five categories: doing nothing, pays now, fair share, mission zero doughnut, refers ‘Corporate To Do List’. Each category list step business’s journey (Table Table 1. Corporate List. nothing Business-as-usual, profit maximization, shareholder value prioritization Adopting measures return investment share Acknowledging assuming subjective level responsibility no harm, aiming net-zero impact, do less bad design, Source: (2017). theory, figure. extractive ‘doing doughnut’. emphasizes urgency transform, rather than manoeuvre list. transformation, Action Lab (DEAL) focus business: Purpose, Networks, Governance, Ownership Finance 2 details thinking behind each pillar questions them date, failed examine according outlined DEAL (2020) against regenerative. 2. Pillars Business. Purpose reason organizations’ existence Redesign: Does purpose serve business, does beyond itself? Networks map connections business. networks surrounding align supportive values? Governance incorporation persons involved Who decisions making? made? measured? Is safeguarded? land, data, assets dictate purpose? owns successes failures? financing resulting modus operandi results demand? vice versa? (2020). Conceptual Framework argues delivered 2002; Dobbelsteen, so, would facilitate undertaking redesign, detailed perspective, generative DEAL’s they so result expect drive visualize MNE its’ market. Moving left right (see Fig. 2), pillars. expected many properties such, methodology below. 2.Conceptual Framework: Methodology Bryman Bell’s (2003) occurrences evolving indefinite, researched constantly contexts, design interpretivist phenomenological. subjectivity intertwined execution research, findings, allows conclusions evolve restricted hypothesis. As topic relatively underdeveloped, accurate insightful real-life (Eisenhardt Graebner, 2007; Doh, case answer why 2020; Yin, Semi-structured used data collection. pre-designed questions, emerging open scope enable respondents expand follow-up evolve, used. prepared focussed asking occurred brought secondary add discussion. interview was allowed conversation went on. suggested (2004), every interactions documented recorded transparency. logistical feasibility notable presence considered. University were locate willing participate. potential contacted via LinkedIn messaging service e-mail. study’s criterion creating research; rankings United Nations’ Goals (SDGs) performance, nation’s SDGs, Sweden ranks second 193 nations Nations (Sachs At level, sources examined study. Brand Index European-wide brand survey, country-level ranking consumers’ perception consumers, IKEA ranked top (SB Insight, 2022). exploring contacting above-mentioned other databases, interviewees secured Tetra Pak. keyword searches job roles including, limited to, ‘sustainable’, ‘sustainability’ ‘innovation’. intention located in-depth insights. knowledgeable individual interviewed 3). single deemed sufficient seniority, degree oversight questions. Both manager higher, companies. virtually, video-call, took 60–90 min audio transcribed. transcriptions sent endorsement. gathered sources, annual reports, reports media publications. 3. Overview Respondents. Company Role Description Remit Head Leads team piloting Global Pak Transformation Manager Responsible communicating customers customer-facing teams Europe founded Lund, Sweden, since 1981, headquartered Lausanne, Switzerland. 1991, acquired Alfa Laval, 1993, reorganized, Laval acting group holding company, operates. Around 35,000 employees group, whom around 25,000 retains 500 €1.85 billion reported revenue (Dun Bradstreet, 1943 Netherlands Liechtenstein historically still (IKEA Culture Values, 225,000 co-workers, 14,000 employed (IKEA, 2017). Revenue figures separated region unavailable. Data Analysis Miles Huberman (1994) suggest elements analysis; using reduction categories, themes patterns, organizing compressing information display, finally enables deductions (Boyd 1985). Findings analysed structured analysis characteristics studied List presented 1 establish foundation anchored framework, Fundamental future. evaluated attempting culture, policy technology, altered. essence, identifies incorporating because redesign. IKEA, goals define recognition crisis that. 2030, Sustainability, –To billion+ people better everyday life become circular, regenerate chain. IKEA’s People Planet Positive report path elaborated, areas outlined. Climate unsustainable inequality identified topics ambitions. All attentions ‘People Positive’. Importantly, recognizes leader inspiration Emphasizing scale, reach tools 2022): No method more effective good example. Ingvar Kamprad, Founder 2022, website) Within measuring footprint chain 2016 baseline. follows Greenhouse Gas Protocols, measurement accounting standard (Greenhouse Protocol, 2022), includes 1, 3 Scopes refer generated internal operations measure assume throughout supply chain, suppliers raw materials, products’ end when hands consumer beyond. 2030 commitments transform circular regeneration halving net greenhouse gas (Inter consumption, offering ‘healthy living’ solutions Positive, 2020, 12) affordable attractive options energy, food, water air. Already, publicized introduction products waste, renewable efficiency, set comprise, quality, price measured redefine healthier, safer sustainably. claims fairness states closely compliance IWAY code conduct, rights conditions. Across acknowledged. upon frameworks, including Paris Agreement science-based targets. List, sit ‘Do Their Fair Share’, whereby acknowledged undertaken modes possible ‘Doing Mission Zero’ clear lowering striving zero. certain areas, delivering making stage Doughnut’. product assessments entire adheres IKEA-owned factories 100% 70% material usage recycled FY21, And emissions, commits reaching 2050 Pak’s food available, protecting (Tetra Report, underpinned ‘Our Strategy 2030’, guide low-carbon