Swedish companies lead the way with SBTi commitments

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I used the SBTi dashboard to see how companies in the Nordics compare. It is probably no surprise that Sweden leads the way, but I didn’t expect Norway to be in last place.

  • Sweden: 482
  • Denmark: 306
  • Finland: 191
  • Norway: 157
  • Iceland: 12

In fact, Swedish companies make up for 42% of all 1,148 Nordics who have set targets or commitments.

If we compare these commitments to the relative size of our economies, Sweden still leads. Probably the big surprise to me is Norway. By many measures, Norway leads the world in sustainability initiatives. So why are they in last place here?

An interesting study titled Climate change adaptation in Norwegian businesses – Awareness, integration and barriers from last year doesn’t address SBTi directly, but looks at perceived barriers to climate change adaptation in Norwegian companies. Their analysis shows the main problems are:

  1. Costs
  2. Uncertainty related to effectiveness
  3. Staffing
  4. Lack of knowledge and competence
  5. Unclear regulations

Maybe the real problem is how net zero doesn’t conceptually work with oil and gas, which makes up about 20% of Norwegian GDP. The good news is that at least two of the biggest Norwegian firms, Kongsberg Gruppen and Telenor, have made SBTi commitments. SBTi just released their new standards for financial institutions, which should encourage other industries to commit.

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The worse risks aren’t the hidden ones – they are the mispriced ones

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The Science Based Targets Network can help uncover hidden risks, as well as price them.

Source: SBTN

Warren Buffett made his fortune by understanding and properly pricing risks. When Berkshire Hathaway takes a financial hit, Buffett almost always acknowledges the problem was not missing a risk; it was mispricing it.

In 1997 he wrote: “A pernicious aspect of catastrophe insurance, however, makes it likely that mispricing, even of a severe variety, will not be discovered for a very long time.” We can replace the phrase “catastrophe insurance” with “climate change” and the statement is still valid.

When you look through a company’s annual reports you can see they recognise the financial risks of climate issues. Most of these risks aren’t hidden, but are they properly priced?


Here is where the Science Based Targets can help. The purpose of the SBTs is not to put a euro sign on these risks, but rather to identify, measure and mitigate specific pressures, including land/sea use change, resource exploitation, pollution, climate change and invasives species.

The SBT process is extremely valuable in other ways, such as complying with the Corporate Sustainability Reporting Directive (CSRD) and pricing risks. The SBT process encourages companies to integrate climate-related issues into risk management and decision-making.

These risks can include:

  • Higher cost of capital
  • Stranded legacy assets or business models
  • Higher insurance costs and higher chance of catastrophic events
  • Reputational damage
  • Loss of access to raw materials or critical resources
  • Litigation

It is difficult to accurately price these risks, but it is nearly impossible to price them without first objectively measuring at-risk resources or processes, such as through the SBT process.

In the SBTN’s excellent introductory module they have a slide which explains how their process can help a company identify risks. They should also emphasise how SBTs can be the first step in pricing those risks. There is a lot of added value from the SBT process which isn’t immediately apparent.

Learning from failure: the net zero gap

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You have more arrows. If you miss your mark then try again.

Christoffer Wilhelm Eckersberg – Three Spartan boys practicing archery (1812)

What happens when you realise you aren’t going to reach your climate goals? This uncomfortable question is becoming more urgent for companies and countries. Falling short on net zero promises is an embarrassment, but it is also a chance to improve.

In June 2019, Finland was praised when the then-new Government announced an ambitious plan to be net zero by 2035. Six years later the annual review has admitted the country is far from meeting their goals. The Climate Change Performance Index estimates Finnish emissions are about 47% higher than they should be, based on the country’s own commitments.

It is not only countries who are falling behind their goals: only 16% of large corporations are on track to be net zero by 2050. More companies are setting goals, with the number of companies applying to the Science Based Target Initiative (SBTi) up 30% year-to-date. This is good news, but setting a goal and reaching it are two entirely different things.

So what happens when a country or company falls behind their goals? Here is a suggested process to follow so you can learn from your mistakes and improve your performance.

1) Analyse the original goal-setting process

Why did the organisation choose these goals?

How were the goals decided?

Who were the decision-makers, and did they have all the necessary information at the time?

Were the goals realistic?

2) Identify the problems

Collect and analyse data to quantify what went wrong, and why.

What was in your control?

What wasn’t in your control?

Did you identify potential risks and develop contingency plans? If so, how did that process work?

3) Determine corrective actions

Broadly, you can change your goals, change your behaviour or change both.

There is nothing wrong with failing to meet a goal, it happens to every organisation which sets goals. In fact, if you meet every goal you aren’t being ambitious enough. The important thing is to use the lessons learned from your failure analysis for your path forward. In the race against climate change, transparency and course correction are just as important as ambition. Missing the mark doesn’t mean giving up; it means moving forward smarter.

Want to talk green? Contact me at info at davidjcord.com.