A Rising Tide Lifts All Boats:

How Capitalism in America can Benefit from the Nordic Experience

by Christina Cairns, EMBA22

In the era of rising temperatures, declining ecosystems and increased strife due to rapid climate change, there is a lesson to be learned from the Nordic countries: a rising tide (thanks to sea level rise) can indeed lift all boats.

I recently visited Sweden for work and while riding the train into downtown Stockholm, I couldn’t help noticing the advertising displayed everywhere, touting not a company or its latest products, but a plea for everyone to do their part to reduce global greenhouse gas emissions (GHGs) to mitigate climate change. 

In the US, I’ve become accustomed to frequent advertisements for companies showcasing their best efforts to reduce their carbon footprint and “go green.” On my flight through London, I watched repeated ads from a certain bank talking about its major renewable energy investments (although no mention of its financing of coal power plants halfway across the world). But nowhere had I seen such a dedicated campaign asking consumers to change their GHG-heavy ways. 

Manifesting and accounting for the intrinsic and moral value of nature through sustainable business practices seems nearly lost in many countries and cultures, but in Scandinavia, it seems practically second nature, woven into the fabric of everyday civic life. It is ingrained not only as an individual responsibility but also a corporate necessity; in fact, Nordic companies are some of the most vocal proponents of climate action. Scandinavia’s focus on collective environmental and social responsibility versus individual achievement marks an important diverging point from the U.S., whose tradition of competition and winner-take-all approach (à la Milton Friedman) can actually deter innovation and stifle economic growth.

Robert Strand, a professor at the University of California Berkeley and the Director of the Center for Responsible Business at the Haas School of Business, starkly asserts in his new book, Sustainable Vikings, “Our efficiency advancements without consideration for sustainability now threaten our existence.” These chilling words capture the inevitable result of the social inequalities and unsustainable overuse of Earth’s natural resources at the hands of man in the last 200 years, since the start of the Industrial Revolution. However, he assures us, not all is lost- there are proven ways to avoid catastrophe. His book specifically chronicles the many valuable lessons that Nordic countries have to teach the rest of the world regarding how to achieve a more equitable, efficient and effective capitalism that benefits everyone- not just the one percent- and effects a higher standard of living and long-term prosperity through embracing business practices that prioritize social equality and environmental sustainability. 

Strand writes about “stakeholder capitalism” as an alternative to shareholder capitalism, where a business is held accountable to the best interests of all living things impacted by its operations as opposed to just its human CEO and shareholders. Using this broader definition, businesses must consider and address any potential negative externalities by incorporating these costs into the corporate bottom line. This business model inherently lends itself to mitigating many social and environmental issues, from pollution and habitat destruction to racial bias and discrimination. It also perpetuates what Strand coins a “Me-We-Me” approach instead of the traditional “Me-Me-Me” approach in thinking about the larger systems at play, as opposed to focusing solely- and myopically- on profit alone. 

Now that society at large has finally accepted that climate change is really happening due to rising CO2 levels– after nearly 65 years of scientific proof thanks to the Keeling Curve – and have identified its root causes – anthropogenic activities emitting over 40 million tons of greenhouse gasses every year – it is time for all of us to act on the stakeholder principle and embrace the responsibility to be the change we want to see in the world. With the largest CO2 footprints, businesses must be at the forefront of that change; they are the ones using and reaping significant profit margins from those resources- but only for as long as they last. In fact, their very survival depends upon it as much as Mother Nature’s. 

What does this mean in practice? To start, companies must go beyond acknowledging the causes of and preparing for the consequences of climate change to taking responsibility for their part, both historically and in the future- ultimately weaning themselves off unsustainable resource use and unfair labor practices. Unlike much of the world where this change would need to be mandated, in Nordic countries most companies voluntarily act with the understanding that social and environmental impacts directly affect their bottom line; this is not a subjective matter of political leaning but evidenced through data and research. Strand points out that “Politics and science are generally aligned in the Nordics, where science guides political discourse and broader public debates.” Nordic customers as well not only demand corporate accountability and equity, but know that these objectives truly make sound financial sense. 

Nordic corporations also recognize that true responsibility and sustainability begin with taking care of the very people they employ. Examples of this include paid parental leave, tuition and training reimbursement and unlimited sick leave. American corporate players must likewise learn that they have an invaluable role to play in supporting the creation of a well-functioning, sensible society by supporting their staff members’ personal wellness as well as incorporating diversity, social equity and inclusion along with environmental sustainability principles and practices into the very fabric of their business plans and operations if they want to succeed. If not, they risk being overwhelmed by the tide.