Finding the right balance between short-term action and long-term ambition is the road to sustainable growth and longevity. This is the clear-cut message from Flemming Besenbacher, the Chairman of one of the world’s largest breweries, Carlsberg.
Carlsberg expects to exist, thrive and grow for at least the next 100 years – if not “indefinitely”.
A key element in honoring this ambition is to accelerate the transformation to sustainable growth, yet this is not something that is achieved overnight. The brewery has by no means found a silver bullet – quite the contrary.
“It’s all about balancing short-termism with long-termism”
For Carlsberg it is a long and arduous journey where all short-term actions are supported by and based on clear long-term strategies and investments:
“It’s all about balancing short-termism with long-termism,” says the Chairman of Carlsberg Group and the Carlsberg Foundation, Professor Flemming Besenbacher.
One clear example of this is the brewery’s 2017 sustainability program “Together Towards ZERO”. The program is tailored to integrate Carlsberg Group’s overall strategy with the SDGs, and consists of four goals: ZERO carbon footprint, ZERO water waste, ZERO irresponsible drinking and a ZERO accidents culture. Each of these is underpinned by individual and measurable targets, leading up to 2022 and 2030.
But the chairman also recognizes that Carlsberg’s longevity in a sustainable world and the transformation to sustainable growth is not something that we can reach within the 2030 timeframe: “We as a company are just as the rest of the world confronted by a range of big global challenges that are constantly evolving and changing. And it is naive to think that these challenges will be completely solved on Monday the 31st of December 2029,” says Flemming Besenbacher.
Looking beyond 2030 is difficult
According to the report “Transformations to Achieve the Sustainable Development Goals” the SDGs and the 2030 Agenda are important milestones, but not sufficient to secure a sustainable world and a business sector that is growing sustainably. They impel us to act now, but according to a 2050+ perspective.
But looking at growth in a 2030+ perspective, is where sustainability strategies, and ambitions become really tricky and much less palpable – and Carlsberg is no exception.
“With the Carlsberg Foundation as a “long-term investor”, one can say that there is a commitment to think very long and to ensure that we are a successful and sustainable company for the next 100 years.”
“We are operating in an uncertain, turbulent and digital world, where challenges are accelerating at high speed and a company’s executive team rarely hold position for more than 5-10 years,” says Flemming Besenbacher, underlining that although in fact the accelerating challenges call us to look beyond 2030, the current turbulence also hinders our ability to think beyond 2030.
However, this does not mean that the message of looking beyond 2030 does not resonate with Flemming Besenbacher. He argues that we must begin to see business and growth from a long-term ethical point of view: “We must begin to understand that investment is a form of ethical commitment to future generations and their future. Everyone has a huge responsibility – from individuals to businesses, organizations and governments,” says Flemming Besenbacher.
Long-term ownership enables long-term focus
Carlsberg is owned by the Carlsberg Foundation and this ownership structure very much influences the brewery’s ability to focus on long-term sustainability goals. Several studies show that long-term ownership, such as foundation ownership, give companies better conditions to strategize for long-term growth, and the certainty to invest in long-term innovation and research – in comparison with, for example companies owned solely by shareholders.
According to the chairman, this kind of ownership is an enabling factor in Carlsberg’s long-term sustainability strategy:
“With the Carlsberg Foundation as a “long-term investor”, one can say that there is a commitment to think very long and to ensure that we are a successful and sustainable company for the next 100 years. There is no expiration date on our ownership. Consequently, the Carlsberg Foundation clearly supports the Carlsberg’s management to think long-term and dare to invest in new innovative projects,” says Flemming Besenbacher, stressing that this kind of ownership makes long-term investments possible through stability:
“This ownership structure contributes to and reminds us of Carlsberg’s purpose. It creates a company, where the management can work better on a long-term basis and go into projects where the return on investment may not be seen in the next quarterly reports. And it attracts and retain talents. They appreciate that our profits are donated to science, art and the humanities, and that Carlsberg has a clear purpose to pursue perfection and create a better tomorrow for all of us”.
One example is Carlsberg’s new “Snap Pack” – a new sustainable packaging that eliminates 76% of the plastic used in a conventional six-pack of beers. Fully implemented, it can reduce the total amount of plastic waste by 1,200 tonnes globally – amounting to 60 million plastic bags a year. This is a solution that demands a lot of investing in innovation and implementation – and where the ROI is only visible in the long-term.
Partnerships are key
Besides harmonizing the short-term and long-term outlook, a main driver in reaching the SDGs and accelerating the 2050 sustainable transformation is to engage partners through collaborations – consequently, it is a cornerstone in Carlsberg’s 2030 strategy.
“In order to succeed in implementing these ambitious goals, we need to establish a wide range of partnerships with other companies, universities, research institutions and NGOs – in short, collaborate with competent people with different experience, knowledge and insight, than we ourselves have,” Flemming Besenbacher says pointing to the importance of SDG17 – Partnerships for the Goals:
“I think partnerships are the way forward to a more sustainable world simply because the challenges we face are so huge and complex that no player can solve them alone. It demands an effort from all parts, thus the most important goal of all the 17 SDGs is perhaps number 17, which is about establishing partnerships and working together towards clear goals.”