SUSTAINABILITY
focused on improving specific issues, for example by using artificial intelligence (AI) to enhance efficiency and reduce waiting times at ports. Peixoto has also noticed several new businesses emerging that use blockchain and other technologies to make supply chains more transparent and accountable. “How we see the role of start-ups is that they can imagine new futures in ways that larger companies don’t,” she asserted. It is from this ability to imagine new ways of doing things that significant progress towards a more sustainable future will be achieved, especially with regards to shipping and aviation. She added that she believes larger existing companies, on the other hand, are too reliant on extrapolating solutions from the past. The role of consumers and regulation While start-ups have an important role to play in offering innovative solutions to tomorrow’s problems, it is crucial that large corporations also change their thinking and behaviour with regard to sustainability if a climate disaster is to be avoided. The panellists discussed three predominant ways this change can be motivated: through regulations, stakeholder activism and changing consumer demands. “Legislation is a very powerful, if not the ultimate, driving force,” contended Hummel, “but it does have its weaknesses”. He added that regulation is effective in local contexts, such as the EU, but harder to impose on industries with highly fragmented supply chains, the clothing industry being a good example. Peixoto said she felt that a global binding set of regulations was an unlikely solution. “It would be ideal if we had this harmonisation of legislation, but we know that these international legal environments are quite difficult. There’s a lot of flexibility, so there can be a lot of complexity in the implementation of regulations,” she explained. Moon suggested that people are the key to pushing for sustainable transition, both through organised employee activism such as mass walk-outs and through their consumer choices. Hummel shared this sentiment: “You are very powerful as a voter, but you are even more powerful as a consumer.” Timmer summarised the discussion by putting forward the need for cooperation. This means getting start-ups, investors, large corporations, universities and regulatory frameworks to collaborate with each other to facilitate a more sustainable existence. The vital thing to remember is that every person has their own part to play.
the commercial stage, we’re talking in the region of €200 million and more.” However, despite the potential benefits of such technology to the environment and long- term profits, investors are often put off by the risks inherent in scaling up a technology from the research stage. This can pose a serious challenge for new start-ups. “You have to de-risk the process strategically and step by step,” maintained Hummel. Moon agreed: “Typically, venture capital investors would not want to take a technology risk at all if possible – and especially not a fundamental research risk. They will jump into the picture when there is a market and you have a product that people want like crazy,” she remarked. She believes that regulations need to be brought in that compel large corporations to pay for polluting behaviours. This would make markets, particularly those such as the textile industry that requires products to be sold on a massive scale in order to generate noticeable profits, much more competitive for new, eco-friendly start-ups. Finding new solutions Putting a cost on pollution might make markets more competitive, but for what reason should potential investors chance putting their funds into new start- ups in comparison with large existing corporations? The former will always be the riskier venture, it is true, but it is also where innovation takes place. Developing new processes and technologies will be a key part of sustainable transition. Only 55 per cent of the necessary decrease in carbon emissions by 2050 can be reached with technologies that are currently in commercial use. The other 45 per cent is reliant on the scaling-up of technologies that are either in the early stages of implementation or still in the research phase, according to Timmer. Dr Inês Peixoto is a postdoctoral researcher at Aalto University School of Business whose research focuses on the transition to low-carbon business in the shipping and aviation industries. The need for innovation is particularly urgent in these industries if climate targets are to be reached. As Peixoto explained, the average lifespan of commercial transportation vessels is around 30 to 40 years, meaning that decisions made by shipping companies about which fuel technologies to purchase now will shape the industry for decades to come. Due to exceedingly high levels of capital investment, it can be difficult for start-ups to break into the shipping and aviation industries in a big way. However, there are several promising ventures
BIOGRAPHY Hannu Seristö is a professor of international business at Aalto University School of Business and CEMS academic director at Aalto University
Ambition | DECEMBER 2022/JANUARY 2023 | 37
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