As a big global company, Atlas Copco faces a host of business-relevant sustainability challenges on a daily basis. How do we do business ethically in markets where bribes are commonplace? What is the business case for innovating safer products? What should we do if our suppliers have poor labor conditions? To discuss these and many more sustainability issues, Atlas Copco on May 11, 2015, hosted its fifth Annual Stakeholder Meeting.
The event took place inside the mine located 20 meters below Atlas Copco’s Group Center in Stockholm. About 60 people participated in person, including representatives for customers, unions, governmental and non-governmental organizations, investors, and also of course Atlas Copco employees. For the first time, the meeting, which was organized and led by Mala Chakraborti, VP Corporate Responsibility, was broadcast live on the internet, allowing viewers to send comments and questions.
Discussing sustainability, it turns out, is no small task. While some years ago sustainability basically revolved around the environment, the term has expanded to encompass a wide range of issues, such as labor rights, human rights and responsible payment of taxes around the world.
Transparency is another important aspect, noted President and CEO Ronnie Leten. “Transparency is high in our thinking, our doing,” Ronnie Leten told the audience. “We give you the information that you ask for. It’s very important that we understand you and you understand us.”
Atlas Copco’s products touch nearly everybody’s daily lives in various ways, Mala Chakraborti noted. Had a cup of coffee today? If Atlas Copco’s oil-free air compressors helped process the ingredients, the environmental impact of that java will be a lot less. Your shower may have been put together with the help of the Group’s pneumatic tools. Drive to work? Atlas Copco’s assembly tools make the car manufacturing more energy efficient, and also enhance ergonomics and safety. And of course the Group’s vacuum solutions and assembly tools are used in the manufacturing of smartphones. The list goes on.
“Sustainabilty issues like safety, environmental concerns and ergonomics are real challenges for our customers’ productivity,” Mala Chakraborti said. “Take for example rising energy costs. This is not only expensive for the environment, it is a real financial cost. Fortunately we have a line of leading products with lots of technologies that tackle these problems.”
One example of a business case for sustainability relates to automotive manufacturers’ effort to make more fuel-efficient cars. One way to do this is to use lighter materials, such as aluminum instead of steel. Traditional welding and bolting is difficult with the lighter materials, which means the auto companies must use other assembly methods. That is where Atlas Copco’s brands SCA, with its adhesives, and Henrob, with its rivets, come in. “Sustainability isn’t part of our business, it is our business – and it is part of your life,” Mala Chakraborti said.
Online viewers sent in several questions throughout the event. One asked about Atlas Copco’s strategy for gender balance. Currently, around 17% of the Group’s employees are women. Jeanette Livijn, Senior VP Human Resources and Organizational Development, said that employing more women and giving them opportunities to succeed has been a “strong focus for a number of years.” It is key to monitor the inflow of females, and then check step by step how they can grow and develop to become successful leaders, Jeanette Livijn said. Currently 34% of recent graduates hired are women, so it is heading in the right direction, she said.
One of the highlights was a video with beautiful images from Myanmar, a country long filled with problems such as lack of democracy but which is now beginning to open up after the sanctions have been lifted. Atlas Copco is now in the process of establishing its own presence in the country, doing so very carefully with basically only a few service technicians in the beginning. “For us it’s more of a marathon than a sprint,” Noel Avila, Regional General Manager, says in the video. “We wanted to set our footprints on the ground in a sensible and sustainable way.” The lasting impressions of the local management team was that companies must work together with their stakeholders to create business growth responsibly in complex markets.
This led up to the panel that discussed how companies, governmental and non-governmental organizations can work together to find solutions to the obstacles that businesses face.
Andreas Follér, Sustainability Manager, Corporate Relations at Scania shared the case about a school that they started in Iraq because of the lack of competence in the country that was hindering their productivity. The school has trained more than 1500 technicians, including 40% women. That the school now is close to a conflict zone does not make it any easier, and highlights the ongoing challenges that business face in complex markets.
One online viewer asked how Atlas Copco can guarantee it is 100% ethical. Håkan Osvald, Senior VP, General Counsel, acknowledged that it sometimes can be difficult to define ethics, especially as the Group has many stakeholders whose interests not always are in sync. “We try to be as ethical as we can,” Håkan Osvald said. “Most of us have a very good feeling of what is ethical and not, and it’s up to all of us to try to live up to that.”
Judging from the participants’ focused looks and often broad smiles, the event was a success. “It’s a lot to tackle in an afternoon, but the participants did a great job,” Mala Chakraborti said afterwards. “I think we all gained valuable insight into how sustainability truly is our business.”
Sustainability isn’t part of our business, it is our business – and it is part of your life.
What role do Atlas Copco’s internal audits play for sustainability?
“Internal audits verify risk controls and governance towards The Way We Do Things in Atlas Copco companies. Sustainability is an integrated part in the audits, same as in Group goals and the operational processes. It will lead to good governance, efficiency, long-term productivity and profitability.” - Karin Holmquist, Vice President Group Internal Audit and Assurance, Atlas Copco.
What role do Atlas Copco’s internal audits play for sustainability?
[caption id="attachment_2189" align="alignnone" width="800"] Karin Holmquist[/caption]
“Internal audits verify risk controls and governance towards The Way We Do Things in Atlas Copco companies. Sustainability is an integrated part in the audits, same as in Group goals and the operational processes. It will lead to good governance, efficiency, long-term productivity and profitability.” - Karin Holmquist, Vice President Group Internal Audit and Assurance, Atlas Copco
How is sustainability important from a legal perspective?
[caption id="attachment_2188" align="alignnone" width="800"] Jack Henchel[/caption]
“All of us, Atlas Copco included, are custodians of the Earth’s natural resources. Our global corporate footprint should sustain the green environment, fresh air and clean water we all want for our children and their children. Indeed, Atlas Copco makes the sustainable productivity of our customers a committed priority. Many nations have laws that protect the land, air and water. Atlas Copco works hard to comply with our legal obligations through our own comprehensive due diligence and risk management processes.” - Jack Henschel, Vice President and General Counsel, Atlas Copco Group Compliance
Karin, you deal with investors daily. How into sustainability are they really?
[caption id="attachment_2187" align="alignnone" width="800"] Karin von Marten[/caption]
”Today unfortunately it’s not very integrated on the investor side, but I’m optimistic. Most traditional portfolio managers are focusing very much on financial questions in our meetings. And in the same institutions they may have other teams going through our sustainability approach. But it’s increasingly getting more important also for the traditional portfolio managers, and from Atlas Copco’s point of view we are aiming to meet both with traditional investors and with the more sustainability-minded investors.” - Karin von Matern, Investor Relations Officer, Atlas Copco
How do you as an investor view sustainability?
[caption id="attachment_2186" align="alignnone" width="800"] Anette P Andersson[/caption]
”Sustainability is extremely important. It’s cost reduction, it’s efficient use of resources, and it’s business opportunities. Since we are such a large owner on the Swedish stock market, and a long-term investor, it’s very important for us to understand how a company like Atlas Copco drives the business forward and takes advantage of these business opportunities. We feel the pressure from our clients to take this into account in a more structured way than it has been in the past. We’re becoming more sophisticated in how we do our investments.” - Anette Andersson, Portfolio Manager and ESG Investment Specialist, SEB