21 May 2016

Mistra CE in two extensive futures studies

In the past year, Mistra’s Chief Executive Åke Iverfeldt has worked in two advanced groups that, in various ways, have studied Sweden’s future prospects in terms of competitiveness and sustainable business opportunities. In April, both groups issued their final reports.

The Royal Swedish Academy of Engineering Sciences has been conducting a project entitled ‘Resource-Efficient Business Models — Greater Competitiveness’. This has involved studying how a circular economy can maximise the value of various resources. In a more sustainable society raw materials can be used more efficiently, and reused more, than at present. Åke Iverfeldt has been a member of the steering group for the project, which Mistra has also part-funded.

In April, the steering group issued its report on the whole project, Resource Efficiency — Policy Development to 2050. Reports from the various subprojects will be issued at the end of May or beginning of June.

The project has engaged some 45 companies in five sectors: input goods, infrastructure, capital goods, consumer products and food. Although the work was based on these five sectors, it became clear in the course of the project that an overview of these industrial sectors is also necessary to attain resource efficiency.

‘It was good initially to have a more traditional structure, which meant that we were able to gather all the stakeholders in each value chain. But it subsequently became clear how vital it is to work multisectorally as well. It’s far from certain that new resource-efficient business models are best developed within sectors or industries, or even whether the sectors we have today will be the same in 2050,’ says Åke Iverfeldt.

Studying future prospects for the Government

Iverfeldt has also been assisting as an independent expert in the Government’s group investigating future prospects for ‘Sustainable investments for a green transition and competitiveness’ (Hållbara investeringar för grön omställning och konkurrenskraft). The group’s work had an extremely open mandate connected with Sweden’s climate targets, and this initially caused some confusion about the actual way of working. But when the dust settled, according to Iverfeldt, interesting ideas emerged from intensive discussions and unconventional thinking.

‘It was an extremely creative intellectual process in which ideas were thrashed out in a very exciting way. We represented no one but ourselves and our collective experience, and the group increasingly took on the nature of a think tank with a clear system perspective.’

Iverfeldt, who took part in the future prospects group not as a representative of Mistra but as an independent expert, played a particularly proactive part in the discussions about green investments. In April the group presented its final report, ‘Shifting to Sustainability and Competitiveness’ (Omställning till hållbarhet och konkurrenskraft).

Green investment bank proposed

One of the group’s recommendations in the final report is a state-owned green investment bank. This should be able to eliminate market failures and foster the investments in sustainable solutions that society needs, but where the market currently acts with too short a time frame or misjudges the risks.

‘It’s important to emphasise that this kind of bank must have normal, businesslike yield requirements. Instead, the key is to have the correct, advanced expertise in the area of sustainable investments and also to have an incentive structure that promotes long-termism both for the individual and for the organisation,’ Iverfeldt says.

As a model for the right expertise and long-termism, he mentions Generation Asset Management, the investment fund run by Al Gore and David Blood, which has successfully managed to distinguish potential winners among environmental technology companies to invest in. The fund, in which Mistra was the first investor, has succeeded better than most in combining sustainable investments with a high return.

Iverfeldt also points to the fact that smaller Swedish ecotechnology companies seeking growth at present find it hard to secure capital for the purpose. They are not prioritised by investors and lenders. The purpose of a green investment bank includes helping to develop Swedish environmental technology companies along commercial lines.

For Mistra, the CE’s participation in both groups is advantageous for the Foundation’s analysis of global developments, which is the basis for future research initiatives.

‘It’s among the most enjoyable sidelines of my work I’ve had, and I believe Mistra will benefit from it. It became a natural part of Mistra’s global monitoring,’ Iverfeldt concludes.

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