7 October 2016

How do you sleep at night?

Matti Lievonen

Jerry Brown, the Governor of California, contacted me and asked me to visit him. I was not too enthusiastic at first. I thought that this would be another useless round of handshakes. I could not have been more wrong. The governor had actually put aside a lot of time, and we talked for a couple of hours.

Lobbyists from the conventional oil industry had told Brown that renewable fuels are a scam. He wanted to know if that was true.

I told him my own views. And a lot has happened since. Seven cities in California have already switched to using of 100% renewable diesel.

Walnut Creek was the first to do so. At the beginning of last year, the City of San Francisco also adopted NEXBTL from Finland as the fuel for all of its diesel-powered vehicle fleet. The Mayor of San Francisco is currently Neste's most important sales agent.

The amount of renewable natural resources that our planet can produce in a year was already consumed in August. If all of the people in the world had the consumption habits of Finns, the threshold would have been exceeded already in April.

Finland is a big country. The winters are cold and the distances long. We can well justify our lifestyles and consumption habits with the special characteristics related to our location. However, the Paris Agreement on climate highlighted the fact that every country will have to take concrete action to mitigate climate change.

A more sustainable view of life is supported by the objectives that the United Nations General Assembly approved last year. They have also changed the way companies think. It is the responsibility of the operational management and board members of all major corporations to ensure that future business is built on low-carbon solutions.

It will not be easy. Not all influential figures are taking the change seriously enough. Reviewing only a narrow sector or over a short timespan can also impede the right view of the situation from emerging. Many of us Finnish corporate leaders emphasize the Finnish perspective too much, even though it has little or no effect on the global change.

Some companies will end up in a difficult situation when they notice that the low-carbon future can result in cannibalizing their current products. Yet operational management and board members must have the courage to leave businesses that might be profitable right now, but whose sustainability will be questioned the day after tomorrow.

Managers have to look into the future and recognize the areas where they can be leaders. It is necessary to listen to customers and sometimes even build up the courage to create completely new markets. Ideas outside the conventional mindset must be sold to legislators and customers alike.

Based on experience, I know that there are no shortcuts – not even for producers of sustainable products. But the work pays off. Our company has been able to make good profits from renewable products and increase shareholder value for a couple of years already.

I believe that Finnish companies can find a place in the world that is clearly more significant than their size – one that makes energy use more efficient, replaces fossil raw materials with bio-based raw materials and exchanges old consumption habits for more sustainable ones.

It is nicer to fall asleep in the evening when you can influence the world in which you children and grandchildren will live. How do you sleep at night?

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Matti Lievonen, Neste
Matti Lievonen
President & CEO, Neste