by Ulrika Wedberg, Head of Sustainable Business, Sandvik Group
Innovation, business and the improvement of the human condition have long been intertwined. When George Westinghouse and Thomas Edison competed for the contract to electrify America in the 1880s, their motivation was money. But electricity also lit up dark streets and modernised households.
What this and forthcoming decades must now add to the equation is planet Earth. We are at a critical juncture, when pursuing profitable growth without factoring in the protection of the environment is simply not enough.
Sandvik, a high-tech global engineering group, is one company spearheading this paradigm shift within its own industry. Sandvik develops and manufactures tools and tooling systems for advanced metal cutting, as well as advanced materials such as stainless steels and alloys. It offers equipment and software solutions for the mining industry too.
Allying great business with great causes has always been in the company’s DNA. “At Sandvik, energy consumption and environmental considerations are critical to product and process development,” says Tomas Eliasson, Executive Vice President and CFO.
Additive manufacturing is a case in point. By leveraging cutting-edge 3D printing technology for components in complex shapes and forms, we can add layers of materials rather than machining or cutting them away, thus reducing resource and energy needs as well as waste. This is exactly why Sandvik decided to expand into this territory a couple of years ago. As well as improving productivity considerably, combining legacy methods with additive manufacturing also enables both Sandvik and its customers to make their operations more sustainable.
From corporate responsibility to sustainable business
Before extreme weather incidents and harrowing pictures of environmental pollution threw sustainability into sharp focus, we had corporate responsibility. Corporate responsibility was typically seen by businesses as a necessary exercise that added costs, brought no benefits and eroded competitiveness.
If businesses are to be truly sustainable, the subject must be paid more than just lip service. As Eliasson explains, “sustainability should never be considered an add-on by any business. Rather, it needs to be fully integrated into everything we do.”
And Sandvik puts its money where its mouth is, with sustainability becoming the most important driver of research and process development within the company. “We understand the need for the world to make the shift to new business models and new thinking in line with the UN’s Sustainability Goals and the Paris Climate Agreement,” adds Björn Rosengren, President and CEO.
So much so that Sandvik has set itself the target of achieving 90 per cent circularity by 2030. To avoid the traps of blue-sky thinking, it has also implemented a system of enablers such as the Ideas Hub, a sustainability idea programme, and the Sustainable Business Partner award, while also incorporating the milestones of its sustainability programme into its performance management system.
The business case for sustainability
Customers who buy Sandvik products and solutions can both provide a safer workplace for their employees and reduce their ecological footprint. Sandvik’s electrified and automated mining machines enable human employees to work from the surface, cutting diesel emissions to zero. The company buys back drills and inserts from its customers after they lose their cutting quality and recovers precious tungsten and cobalt from them, thus closing the loop of the circular economy.
All these processes make perfect business sense too. For example, making tools from recycled cemented carbide, the number one cutting tool material, requires 70 per cent less energy than making them from virgin materials; compressors fitted with Sandvik’s proprietary valve steel are up to 50 per cent more energy efficient. Innovation driven by sustainability can give a significant boost to the bottom line.
In January 2019, the World Economic Forum officially selected Sandvik’s plant in Gimo, Sweden as a “lighthouse” site, one that “comprehensively deploys a wide range of industry 4.0 technologies and use cases at scale, while keeping humans and sustainability at the heart of innovation”. Further proof that technological advancement and sustainability can go hand-in-hand to pave the way for dynamic long-term profitable growth.