In conversation: Lars Mallasch, Alessa Lux and Peter Bartsch, moderated by corporAID publisher Bernhard Weber (from left to right)
corporAID: In which direction is the topic of sustainability moving and what are the effects of the pandemic?

Mallasch: The pandemic had a particularly strong operational impact, to varying degrees in the various countries. What we saw during the crisis is that targeted collaboration between companies, governments, international organizations and NGOs can make a huge difference. And how quickly you can actually drive developments forward and react to changes in any environment. From our point of view, this is a key learning effect, and it is important to build on it when it comes to sustainability. In concrete terms, this means for our activities in the areas of sustainability to rely even more than before on cooperation with a wide range of partners. 

Bartsch: The crisis has made people even more aware that sustainability is a must and cannot be pushed aside. Due to the difficult situation caused by the lockdown and the associated decline in business, the focus of some companies was on crisis management. But in principle, many companies have used the time of the crisis to work out the issue of sustainability more intensively and to approach it more strategically. We feel that very strongly. 

The crisis has made people even more aware that sustainability is a must.

Lux: At the moment, companies are also faced with a lot of environmental, social and corporate governance regulations. This is also reflected in the thinking and approach in the current strategy processes of my customers. Companies have recognized that they have to change fundamentally and have to put their current business model to the test. So you can see that both companies and consumers have become more aware of sustainability. It is undisputed that sustainability is the defining theme of our present and future. 

What are the specific challenges for companies? 

Mallasch: I would like to differentiate what you have said, Mrs Lux. One is the regulatory environment and the other is of course society, which looks very closely. We see this in our new employees, for example. They are very interested in what the company is doing in the area of ​​sustainability. And it is not enough to meet any criteria, you have to show what you can actually do. I believe that serious and tangible engagement with sustainability will be an important differentiator in the future. 

Bartsch: Today sustainability is firmly integrated into our strategy. And here it is important to set up the appropriate governance, to anchor the topic in all functions in the company. We are growing, we have new investments like in Brazil and Thailand. Here I have to include the topic of sustainability in the planning right from the start. But also with every new research project, we use clear criteria to determine the impact that can be expected on the environment or society.

Lux: I see a field of tension here. On the one hand, companies have to become operationally active in the short term because many have set themselves major sustainability goals by 2025 or 2030, and if they do nothing now, most topics will probably be pretty tight. On the other hand, the challenge lies in developing an overall strategic direction that is more progressive than continuing with existing strategies. When I help our customers develop a vision for their company, then we try to imagine the future in the year 2050 - and this is not about any regulations. At the same time, it may work for some companies for a few more years if they continue as before and just meet the bare minimum. But: Both along the value chain and from consumers, the pressure is increasing to gradually become more sustainable. In the case of companies that have neglected to deal with sustainability more than just superficially, I ask myself whether they will really manage to keep up.

Strategic can also mean: it will happen in ten years, and we will see how we get there.

Mallasch: I am always a little skeptical when it comes to expressing strategic ideas. Strategic can also mean: it will happen in ten years, and we will see how we get there. Sure, there has to be a vision. We too have long-term goals that we know are extremely difficult to achieve. But it is crucial that you set yourself measurable goals. This enables us to ascertain where we are, and then we can define the path to achieve the goal and work through it in cooperation with science and stakeholders. Anything else would ultimately only be communication measures that basically do not create any added value. 

Bartsch: We see it exactly the same way: there must be clear goals. The transparency that is increasingly required means that you really have to show what you have achieved. Greenwashing will certainly be more difficult for companies, as can already be seen today.

Mallasch: In addition, in the medium term most of the larger companies will not be able to avoid measurable goals anyway, as the financial market is moving more and more towards sustainability and demands target indicators that simply have to be delivered. 

Lux: I think it's good that financial instruments are increasingly linked to green factors. Because with internal goals I can always look for a way out of not doing it after all or find an explanation as to why I didn't make it. But if there is a risk that it will suddenly become incredibly expensive or that the financing will fall, then I have to achieve certain goals in any case. I think it's part of the process that companies need some leverage to move. 

Mallasch: A healthy area of ​​tension is certainly important. Nonetheless, we are commercial enterprises. This means that sustainability and economic success have to go hand in hand and sustainability even leads to the development of successful business models. It is a fact that there is also pressure from the financial market, especially if you are a listed company. In my opinion, however, the change in thinking is more important: that we want to find attractive business opportunities for ourselves in the area of ​​sustainability. That does not necessarily mean that you now have to fundamentally transform the company, but that you take a fresh look at the core processes and can definitely find new opportunities for business cases or investments there. In the past few years we have invested 500 million euros in our energy generation. This is a positive business case because we have increased our energy self-sufficiency and, at the same time, our CO2-Emissions could be reduced. 

What do you expect from politics? 

Mallasch: What would be important to me is that we have transparency and consistency in the planned and set activities. It is also important not to forget how complex industries are and how quickly regulations can therefore become complex. From my point of view, the devil often lies in the details. One example is the use of biomass as a primary fuel. This is a wrong way. In my opinion, biomass should first be used for other purposes and only burned at the very end. On the other hand, one shouldn't forget how strong the influence of the consumer is: Reacting to customer needs is even faster than developing regulations. This means that when consumer behavior changes on a broad basis, we see a much faster reaction from entire industries than regulations could ever bring about. 

Bartsch: Without these regulations, change is still too slow, if only because of competitiveness. Climate change is a global issue, so regulations at EU level are important. However, these must also be coordinated globally, otherwise it will be difficult to determine CO2-Implement goals. Cooperation within the economy plays an important role: as a textile industry, for example, we have recognized that there are problems and that we have to do something together. Of course there is a legal framework, but we now go hand in hand, and certain standards that have been jointly defined by the industry are also incorporated into the regulatory framework. 

The influence on the actions of companies by consumers is stronger today than ever before.

Lux: It must come down to global solutions because the European Union will not be able to solve global problems on its own. It affects consumers as well as industry, finance and governments. The influence on the actions of companies by consumers is stronger today than ever before. For example, increased transparency requirements in conjunction with social media give companies the opportunity to actually notify them when something does not fit. If, for example, a large fast food chain decides to replace plastic straws with paper straws, even though these are much more harmful to the environment. Personally, things can't go fast enough for me. I have experienced both the extreme heat in Pakistan and the air pollution in China myself. These are circumstances that I do not wish for anyone, and from this experience I expect a lot more dynamism. In the knowledge that change comes with many hurdles and a lot of complexity. 

Bartsch: I also think that it has to go faster and that more radical approaches are necessary - if only because of the complexity of these transformation processes. When we discuss the circular economy, we need countless stakeholders plus the legislator in order for a business case to come about. We just have to think differently. This is also the case with intellectual property: you have to share a lot more here, otherwise you won't be able to find solutions quickly enough. It's a really big challenge. 

Mallasch: An important learning experience is the power of collaboration and the knowledge of what can be achieved in a short time. Provided that you are ready for the use of large resources and that there is an association of different stakeholders who align their interests with a common goal. So it is important that the EU go ahead, but it would be even more important if we agreed on a goal at global level and then worked towards it together. 

Thank you for the interview.

The interlocutors

Peter Bartsch is Head of Corporate Sustainability at the Upper Austrian fiber manufacturer Lenzing.

Alessa Lux, Senior manager at the consulting company KPMG, accompanies companies in strategic transformation projects.

Lars Mallasch is Group Technical & Sustainability Director at the packaging and paper group Worlds.

Photos: Mihai Mitrea