1. Overview

Climate change is progressing at an alarming rate, and mitigation requires decisive action from the government, local and regional authorities, businesses and citizens. Climate Leadership Coalition, founded by the Finnish Innovation Fund Sitra, Neste Corporation, Fortum, KONE Corporation, Outotec, Caverion Corporation and ST1, believes that profitable, sustainable business is the most efficient way to respond to global environmental challenges and calls on businesses and other
organisations to take faster action to combat climate change. The coalition was founded on 18 June 2014.

Purpose

The purpose of the coalition is to affect businesses’ and research organisations’ competitiveness and ability to respond to the threats posed by climate change and the scarcity of natural resources, as well as to improve their ability to exploit the business opportunities related to these. The coalition promotes international best practices and their implementation. The basic idea of the coalition is that profitable,
sustainable business is the most efficient way to respond to global environmental challenges.

In order to implement its purpose the coalition is:

  • aggregating organisations and private persons who promote the objectives of the coalition
  • gathering and sharing information to its members on global environment-related trends and comparing best practices implemented in other countries
  • initiating development projects that support the purpose of the coalition
  • making proposals to ministries and public organisations on developing the innovation system and research programmes
  • organising seminars and events to raise awareness and to find new business opportunities
  • operating as a collaborative body between its members and representing its members in international cooperation organisations
  • identifying Finnish know-how to use as a model for efficient mitigation of climate change and communicating this on international fora

Changes in the operating environment

2018 marked the emergence of a broader public awareness of the magnitude and severity of climate change. The extreme heatwave in Europe that resulted in large-scale crop damages, followed by the IPCC report in the autumn sparked a new level of crisis awareness in citizens and political leaders.

The IPCC report illustrated that average global warming of 2 degrees would set off irreversible ecosystem changes with extremely harmful effects to food production, weather patterns, Arctic nature and many other natural phenomena affecting human living conditions. The report concluded that global warming should be kept below 1.5 degrees.

A group of scientists led by Johan Rockström of the Stockholm Resilience Centre introduced a concept entitled Carbon Law, which states that global carbon emissions should be halved decade, first by 2030, then by 2040 and then again by 2050 and the remaining emissions should be offset via
carbon sinks by 2050. CLC’s board concluded that the Carbon Law sets a good framework and ambition level for mitigation actions towards the 1.5 degree target.

In November the European Commission presented its strategic long-term vision for a prosperous, modern, competitive and climate-neutral economy by 2050. The strategy opens a thorough debate involving European decision-makers and citizens at large as to how Europe should prepare itself towards a 2050 horizon and the subsequent submission of the European long-term Strategy to the UN Framework Convention on Climate Change by 2020. The Commission looked into eight pathways to reduce greenhouse gas emissions. Two pathways would enable greenhouse gas neutrality and 1.5 C degree ambition by 2050. The Commission’s analysis is informed by a detailed modelling of pathways across all sectors of the economy. These pathways are “what if-scenarios” and plausible options to achieve a climate neutral Europe. CLC, along with Nordic counterparts Haga Initiative (Sweden), Concito (Denmark) and Zero Emission Resource Organisation (Norway) concluded that the strategy illustrates that new, ambitious climate targets are achievable.

In December world leaders convened in the UN Climate Conference in Katowice, Poland. The main accomplishment of the 24th COP was the completion of the “Paris Rulebook”, a set of principles and guidelines for the execution of the Paris agreement. Overall, the COP was deemed reasonably successful, given the increase of anti-climate-policy sentiment in global politics.

Number of members, operations and finances

In 2018, eleven new organisational and five individual members joined the CLC. The new member organisation are City of Espoo, City of Pori, City of Porvoo, City of Tampere, Demos Effect, Finance Finland ry, OP Group, Pöyry, Sanoma Group, University of Helsinki and Wärtsilä. The new individual
members are Anders Wijkman, Anneli Pauli, Risto Volanen, Louis Blumberg and Markku Kulmala.

The coalition held two meetings during 2018. The coalition’s statutory spring meeting was held 18th of May 2018, and the autumn meeting on 21st of September 2018. The autumn meeting involved electingreplacements for three Board members who were due to retire by rotation: Minna Arve, Pertti Korhonen and Henrik Ehrnrooth . Board members Minna Arve and Henrik Ehrnrooth were re-elected and Jorma Ollila and Jaakko Eskola were elected as new members. Kati ter Horst, Tuuli Kaskinen, Merja Kivelä,
Markku Markkula and Antti Vasara were elected as deputy members. CLC joined EIT Climate-KIC, a European knowledge and innovation community, working towards a prosperous, inclusive, climate-resilient society founded on a circular, zero-carbon economy.

The CLC’s operations were financed mainly by membership fees. Income from membership fees, grants and other sources amounted to EUR 480.130,00 (EUR 377.630,00 in the previous year) and expenses to EUR 525.050,52 (EUR 405 024,01). The coalition’s assets stood at EUR -13.134,97 (EUR 31.785,55) at the end of the year. The coalition’s income and expenses for 2018 had been estimated at EUR 430.100,00 and EUR 391.799,02 respectively at the autumn meeting of 2017. The coalition grew
faster than planned. Due to the timely needs key projects such as influencing EU climate policy, CLC used external services more than planned and the costs were higher than budgeted in fall 2017.

2. Action plan targets and progress

Flagship projects

CLC has three on-going long-term flagship projects: 1) Civic engagement and proactive procurement, 2) Effective carbon pricing and 3) Nature-based solutions to climate change.

Civic engagement and proactive procurement

Choices made by households amount to as much as 68 per cent of Finland’s consumption-based carbon footprint. This is why CLC has chosen civic engagement and proactive procurement as one of our key focus areas. A key effort in this area is the annual Zero-emission Day on 21 September, which highlights the role of schools and businesses in enabling more climate-friendly choices for consumers. The 2018 Zero-emission day was our biggest to-date, with 25 member companies participating. The role of
consumers was also highlighted in our two events focusing on sports and climate change – one organised in Helsinki and one in the UN Climate Conference in Katowice. At the end of the year the decision was made to set up a top-management think tank focusing on civic engagement and public
procurement. The think tank is lead by Mr Taavi Heikkilä, CEO of the S-group and Ms Minna Arve, mayor of Turku.

Effective carbon pricing

CLC works to encourage the EU to develop a more systemic solution via measures such as extending and strengthening the emission trading system (ETS) while simultaneously improving longevity and predictability to fully support and encourage large-scale investments to decarbonisation. In 2018 CLC together with its counterparts in Sweden, Norway and Denmark drafted a call out to demand more ambitious climate policy in the EU. The call-out details three key objectives for EU leaders:

  • Set a target for achieving net-zero emissions at the latest by 2050 or earlier taking the IPCC findings into account.
  • Based on the targets, agree on a binding carbon budget for the remaining GHG emissions.
  • Revise and align the 2030 and 2040 targets with the net-zero target.

The call-out was signed by Peter Damgaard Jensen, CEO of PKA, Jorma Ollila, Former Chairman of Nokia Corporation and Royal Dutch Shell, Odd Arild Grefstad, CEO of Storebrand Group, Marcus Wallenberg, Chairman of SEB, Henrik Ehrnrooth, Chairman of CLC, Nina Ekelund, Executive Director
of Haga Initiative, Christian Ibsen, CEO of CONCITO and Marius Holm, CEO of Zero. By end of year, signatories exceeded 80 Nordic companies and organisations.

View the full call out. View the up-to-date list of signatories.

Nature-based solutions to climate change

The role of carbon sinks in forests and agricultural lands in climate change mitigation is crucial and was further highlighted by the IPCC report. CLC is working together with Pöyry Management Consulting to set up a research project to create a solid and accurate, satellite-based system for calculating forest carbon sinks. Such a system is, in CLC’s view, a necessary prerequisite for including natural carbon sinks or forest-based offsets in the EU ETS. To support and speed up this initiative, CLC set up a Forest theme group and made the decision to set up a top-management Forest think tank in 2018. The theme group is led by Mr Petteri Pihlajamäki, Director, Pöyry Management Consulting and the think tank by Mr Karl-Henrik Sundström, CEO, Stora-Enso. The topic of forest offsets was further explored in 2018 together with Louis Blumberg, who has had an instrumental role in including forest offsets in the California cap and trade system.

Theme groups

In 2018 CLC had eight operational theme groups: carbon handprint and footprint, circular economy, civic engagement, construction, energy, finance, forest and transport.

Carbon handprint and footprint

The aim of the Carbon footprint and handprint theme group is to follow the national and international programs/initiatives to decrease carbon emissions and contribute & share good practises in carbon quantification, mitigation and communication. The chairman of the group in 2018 was Tiina Pajula, VTT. Actions of the group included the follow-up of the developments of PEF (product environmental footprint), SBT and Carbon Handprint project that was completed by the end of year. VTT and LUT
University alongside with Finnish companies (many of them members of CLC) published a method and guidelines for evaluating and communicating on the carbon handprint of products. Carbon handprint guidelines can be found online: https://www.vtt.fi/sites/handprint/. The idea of the Carbon Handprint project was first initiated by Carbon footprint and Handprint theme group. The group organised four meetings including two co-meetings with other theme groups. Invited speakers from various expertise areas were attending each meeting.

Circular economy

The Circular Economy (CE) group exists to help CLC-members discover circular business opportunities & implement CE business models by offering information, support and new initiatives to take part in
as well as a forum for peer sparring and dialogue. In 2018 the group met two times with 23 member organizations taking part, the chairman of the group was Daniel Kaufmann from Sitra. Key themes included helping CLC members in the transition to CE business models through the “Playbook
methodology”, as well as a joint meeting with Construction theme group and information exchange on relevant CE topics.

Civic engagement

The objective of the Civic engagement theme group is to encourage citizens to reduce their carbon footprints, the chairman of the group was Sari Siitonen from CLC. The main action in 2018 was to organize Zero Emissions Day and CLC’s Fall Meeting. All together 25 member organizations were running a number of campaigns at their customers, staff and other stakeholders. Many organizations were also delivering outreach initiatives with local schools. Zero Emissions Day event of schools was organized in cooperation with Economic Information Office TAT, the Finnish National Agency for Education, Myrskyvaroitus-Storm Warning and Pohjois-Tapiola Upper Secondary School. Nordic project “Citizen empowerment to mitigate climate change in Nordic countries” was planned with Finnish Environment Institute (SYKE), Sitra and VTT (in the beginning of 2019 SYKE took a lead for seeking funding for the project). 21 member organizations have named their participants in this theme group. The theme group had four meetings, of which one was a joint meeting with the Carbon footprint and handprint theme group.

Construction

The Construction theme group focuses on new solutions and assessment methods for low carbon building. In August the chairman of the group, Riikka Holopainen from VTT, was replaced by Tarja Häkkinen from VTT, since Holopainen departed to a non-CLC-member organisation. The group emphasizes the significance of building refurbishment. The group has concluded that new methods will be needed by all actors of the value chain to consider embodied GHG impacts in addition to energy related operational impacts. Also cities will need new methods to be able to consider GHG targets in all building related procurements. Construction theme group had three meetings in 2018 – the last one was a combined meeting together with the Circular economy theme group.

Energy

The Energy theme group focuses on advancing a smart, flexible and low-carbon Nordic energy market. In 2018 the group focused on how to further the steps outlined in Jorma Ollila’s report to the Nordic Council of Ministers. The group drafted a list of five key actions for Nordic energy ministers and
proceeded to draft a proposal on how to ensure funding and personnel resources for research activities necessary to realise the actions. The group met two times, and 14 member organisations participated in the group’s activities. The chairman of the group was Kaisa Hernberg from CLC.

Finance

In 2018, The Financial Theme Group had 4 miniseminars. The issues covered included themes related to TCFD and it’s implementation, EU ETS, South Korean holistic climate strategy and the Californian climate policy model. In 2019, the task of the Theme Group is more clearly than earlier to support CLC’s member companies’ efforts to apply TCFD in their reporting and daily work. In this purpose, the group will arrange 4 miniseminars. In the membership of the group, representatives of 26 CLC’s members are included. The chairman of the group was Timo Tyrväinen from CLC.

Forest

The Forest theme group focuses on accelerating the development of forest carbon measurement and accounting platform (called Biocarbon Monitoring Platform). Other focus areas include forest offsets and related market-based instruments, as well as sustainability and consumer/end user perspectives. The chairman of the group was Petteri Pihlajamäki from Pöyry.

Transport

The objectives of the Transport group are to help CLC-members to jointly develop and offer solutions for reducing carbon emissions from transport and traffic. Currently, the work focuses on creating a Pan-Nordic platform for testing and implementing clean, carbon-neutral transport solutions, setting up common targets and a co-Nordic market for biofuels, and support the advance of electric transport and its infrastructure integration with the common electricity system. In 2018 five meeting were held, and more than ten member organisations participated actively. The chairman of the group was Juhani Laurikko from VTT.

Other activities

During the first quarter, CLC joined forces with the Nordic consortium, led by the Haga Initiative, which interviewed the top management of 38 Nordic companies on their climate strategies and objectives. The key result was that more than 75 per cent of the companies said they could reach net-
zero GHG emissions, given the right policy environment.

During the second quarter, CLC joined the Annual Meeting of the Carbon Pricing Leadership Coalition led by the World Bank Group and the International Monetary Fund. The coalition consists of 32 national
and sub-national governments, 150 leading businesses and 67 strategic partners, including CLC. CLC was invited to give a presentation and development proposals to the CPLC.

In October, the Office of the President of the Republic of Finland invited CLC to collaborate in finding means to reduce the carbon footprint of the Office by at least two-thirds by February 2024. On 6 December, CLC was represented at the President’s Independence Day reception, which had an environmental theme.

In November CLC organised a series of meetings and presentations with Louis Blumberg, who has had an instrumental role in developing the California cap and trade system.

During the last quarter, CLC launched a campaign to reduce black carbon, and co-organised a sport and climate event in Helsinki with Sport and Sustainability International, as well as a side event at COP24 in Katowice with the Estonian government. VTT and LUT University published a guidebook to evaluate the carbon handprint of products. The project idea was developed with Carbon footprint and Handprint theme group.

In December, several CLC members joined the climate seminar convened by the Prime Minister, with 170 actors from different sectors of society. Jorma Ollila presented the proposal to agree ambitious and clear climate targets and to plan a more systemic solution for emission reductions within the EU.

On 12 December, Prime Minister Juha Sipilä gave a speech in the European Council which also addressed climate issues. He demanded a 1.5 °C target and proposed carbon sinks be included in the emission trading system as one development action.

3. By-laws, members and organisation

By-laws

The coalition’s by-laws can be found in Appendix 1.

Members

In 2018, eleven new organisational and six individual members joined the CLC. At the end of the year, the coalition had 53 organisational members and 18 personal members. The coalition’s organisational members are (as of 31 December 2018)

Aalto University
ABB
Castren & Snellman
Caverion
City of Espoo
City of Porvoo
City of Tampere
City of Turku
Demos Effect
Energiateollisuus
Ensto
Fazer
Finnish Environmental Institute SYKE
Finance Finland ry (Finanssiala)
Finnair
Finnish Innovation Fund Sitra
Fortum
Gaia
Gasum
HELEN
IBM Finland
Iin Micropolis
Ilmarinen
Kojamo
KONE
L & T
Lappeenranta University of Technology LUT
Neste
Nokia
Nordea
OP Group
Outotec
Porvoon Energia
Pöyry
Raisio
Sanoma Group
S-Group
SEB
St1
Stora Enso
Teknologiateollisuus
Telia Company
Turku Energia
Turku University
University of Helsinki
Uponor
Vaisala
Varma
VR Group
VTT
Wärtsilä
Åbo Akademi University
Ålandsbanken

There were 18 personal members: Raimo Sailas, Petteri Taalas, Tapio Kanninen, Jaana Husu-Kallio, Sirpa Pietikäinen, Veikko Välilä, Kari Mäkinen, Timo Tyrväinen, Henrik Ehrnrooth, Petteri Korhonen, Jorma Ollila, Matti Rihko, Ben Banerjee, Anders Wijkman, Anneli Pauli, Risto Volanen, Louis Blumberg, Markku Kulmala.

The CLC’s member businesses represent more than half of the market value of the Nasdaq Helsinki stock exchange.

Organisation

The coalition’s statutory autumn meeting on 21st of September 2018. Henrik Ehrnrooth, Minna Arve and Pertti Korhonen were due to resign by rotation and it was recorded that Mikko Kosonen resigned from the board membership in September 2018.

Henrik Ehrnrooth and Minna Arve were re-elected and Jorma Ollila and Jaakko Eskola were elected as new members of the board. Kati ter Horst, Tuuli Kaskinen, Merja Kivelä, Markku Markkula and Antti Vasara were elected as deputy members.

In 2019, the composition of the Board is as follows: Henrik Ehrnrooth (Chairman), Jorma Ollila (Vice Chairman), Minna Arve, Jaakko Eskola, Pekka Lundmark, Risto Murto, Karl-Henrik Sundström and deputy members: Kati ter Horst, Tuuli Kaskinen, Merja Kivelä, Markku Markkula, Antti Vasara.

Mari Pantsar was set as the The Secretary of the Board, Jouni Keronen carried on as Executive Director and Kaisa Hernberg carried on as Development Director.

4. Decision-making process

The coalition’s statutory spring meeting was held 18th of May 2018, and the autumn meeting on 21st of September 2018. The autumn meeting involved confirming the action plan, estimates of income and expenses and the amounts of joining and membership fees for the following calendar year.

Income for the year 2019 was estimated at EUR 500 150,00 and the expenses at EUR 504 234,00 at the autumn meeting. The membership fee for organisational members was set at EUR 10,000/year for large organisations
and at EUR 5,000/year for businesses with a turnover of less than EUR 50 million. The annual fee for personal members is EUR 10/year. Joining fee was not set for the new members.

5. Internal administration

The Board held 11 meetings in 2018, 8 of which were per capsulam. The coalition’s auditors are PricewaterhouseCoopers Oy. The auditor-in-charge is Authorised Public Accountant Jukka Paunonen and the deputy auditor is Authorised Public Accountant Taru Mäenpää.

6. Financial review

The CLC’s operations were mostly financed by membership fees. Income from membership fees, grants and other sources amounted to EUR 480.130,00 (EUR 377.630,00 in the previous year) and expenses to EUR 525.050,52 (EUR 405 024,01) in 2018. Profit/loss for the year 2018 amounted to EUR -44.902,52 (EUR 3.937,90). On the date of the financial statements, the coalition’s assets stood at EUR -13.134,97 (EUR 31.785,55).

The coalition grew faster than planned. Due to the timely needs key projects such as influencing EU climate policy, CLC used external services more than planned and the costs were higher than budgeted in fall 2017.

7. Communications

In terms of communications, the year 2018 was a successful one for the CLC. The number of members increased considerably, and through members ́ own channels messaging of operations increased and diversified. The CLC also gained national attention in several widely circulated media.

The coalition ́s communications network is open for communication and corporate social responsibility professionals from all member organizations, and participation rate has been high. The network ́s mission is to profile the coalition and its Executive Director in the media, learn and share from members ́ good practices and function as a channel to inform about CLC activities and goals.

The network has meetings approximately four times a year, each time hosted by a different member organization to showcase their respective corporate social responsibility projects and discuss current news and issues of the CLC. Guest speakers are also invited to the meetings.

The Communications network is chaired by Unna Lehtipuu, from Framilla Finland Communications Agency. She also coordinates press releases and media relations of the CLC and other communicational issues, being approximately two working days a month. The coalition also sends electronic newsletter to its ́ members on current affairs and activities, now coordinated by Anna Taimisto. All membership and current events news are regularly published on CLC ́s own website, both in Finnish and English, and circulated widely on social media channels.

The coalition featured regularly in the media throughout the year. The CLC and members of the communications network were active in disseminating information about their respective organizations’ climate action on the Zero Emissions Day (21 September 2018), and key persons of CLC staff were interviewed on media in this context.

The coalition published six press releases in 2018, on the STT Press Services, as follows:
28.11.2018 Businesses encourage climate negotiators to increase ambition”
9.10.2018 Proposal on the “carbon law” by Finnish companies
20.9.2018 The Zero Emission Day Press Release: Domestic consumption responsible for 70% of carbon emissions.
13.6. 2019 Nordic Call to update EU climate targets
22.5. 2018 CLC calls smarter energy markets for Nordics
12.4. 2018 Leading companies call for Nordic Leadership on climate change.

The Call to update EU climate targets was widely covered by the Finnish business magazine Talouselämä. The capital newspaper Helsingin sanomat and other media covered events hosted by CLC: The Sports and climate
event and the visit of Director Louis Blumberg, on California Climate Programme, hosted by CLC (20.11.2018).

Two opinion pieces by the coalition ́s CEO Jouni Keronen and other specialists published in Helsingin sanomat also received a good amount of attention. The key persons of CLC also gave several radio interviews on topics related to CLC activities. CLC was also mentioned several times in other media context, f.g. a column in Turun Sanomat (August 26th), which refers to an increased knowledge of CLC activities and importance.

8. Afterword

The Board’s assessment of the year 2018 is that the coalition met and even partially exceeded its targets. The prioritised flagship projects progressed as planned, the number of members grew by more than expected, and the coalition expanded on a Nordic level and internationally. The coalition’s bioeconomy know-how, which is important from the perspective of climate change, increased thanks to new members. The CLC’s Board is pleased with the coalition’s progress.