Council Post: Why US Tech Investors Should Expand For Sustainability

Director of the Americas with Innovation Norway, bridging the gap for large U.S. tech companies looking to expand into the Nordic Region. 

International expansion requires international thinking. As U.S. tech companies consider new opportunities abroad, they must consider not only potential profit but also customer sentiment, operational ease and regulatory friendliness.

With threats like climate change and economic unrest, I believe only regions that prioritize sustainability can offer both the security and the profitability that businesses require for long-term commitments.

For context, “sustainability” refers to efforts that focus on meeting today’s needs without compromising future generations. Sustainability is comprised of three pillars — economic, environmental and social — which are also known as profits, planet and people.

Some societies have a higher awareness of and willingness to act on sustainability goals. If your company agrees that sustainability is important and that companies increasingly will be measured on their ability to meet sustainability goals, I believe such efforts could translate into sound long-term investments with positive ripple effects on many levels. Indeed, the world’s most sustainable companies have a higher return on investment than their peers that are less focused on sustainable development goals.

Why Sustainability Matters Now

I help international companies enter the Norwegian market, and through this experience, I have seen hundreds of businesses becoming increasingly focused on their environmental impact. These companies are concerned about their environmental footprint and what they can do to reduce it, rather than creating specific products to sell that help climate mitigation efforts. We are already seeing the effects of climate change in many regions, such as the fires in California, the increased number of hurricanes in the Atlantic, and the coastal flooding in the U.S. and around the world. Therefore, my team is seeing an increased demand to expand to sustainable regions.

Countries that prioritize sustainability can help businesses get a clearer picture of their short-term and long-term opportunities in the region. Nations that do not prioritize sustainability might attempt to woo international investment by downplaying environmental issues, but business leaders should be wary of such pitches.

I believe countries that address issues like climate change by tackling them head-on instead of sweeping them under the rug are worth considering if you’re expanding your business. In my experience, the best regions for investment accomplish this by defining sustainability metrics that tie into business goals, helping companies draw a direct line from sustainability to long-term financial returns.

Sustainability does not refer only to environmental concerns, however. Economic sustainability plays a factor as well. Countries with thriving middle classes, for example, demonstrate an ability to withstand economic turmoil than countries with major issues of wealth inequality. New generations want to work for and buy from businesses that take their positions as stewards of the world’s resources seriously.

CEOs and other leaders must think about the entire length of the value chain as it stretches across the world. Local outreach matters, but so do global concerns like sustainable supply chain management, fair labor practices, recycling policies and environmental stewardship. For example, goliaths in big tech, like Microsoft and Amazon, are competing for talent and the hearts and minds of consumers by pledging their commitment to sustainability.

From my perspective, sustainability will grow in importance in the future. I predict that consumers and workers will continue to demand better from businesses, and they will reward the most sustainable enterprises with their talent and their spending. Businesses with an eye for expansion should take this opportunity to expand in the right direction.

Tips For Expansion

There are a number of countries you can consider expanding into, such as France, Norway, the U.K. and more. Wherever you choose, it’s important to keep a few best practices in mind:

1. Adapt to the local business culture by employing local staff to complement experienced company representatives. Make sure to align the country’s culture with your company’s culture. Both must align.

2. Employees will want you to live your values of sustainability both in terms of the products and services you sell and your internal business operations. Don’t only focus on the environment; it’s just as important to view sustainability through a well-rounded lens that addresses other important issues.

3. Involve your employees in innovation and decision-making. Particularly within traditional industries, I’ve found that trade unions are often highly valued resources in sustainable countries. There are many good examples of how good collaboration between union leaders and executives results in better bottom- and top-line results for the organization, as well as talent retention of motivated employees.

4. Build trusted local relationships, particularly company to company. If a foreign company enters a region such as Norway, a good brand name internationally is a good start to kick off the company-to-company relations.

5. Look at your business processes to find opportunities to incorporate the local community. For example, the waste heat from your data center could be used to heat local homes or warm up the local aquaculture product. Each location will have its natural advantages and challenges; your business will benefit from one and could help address the other.

Sustainable Businesses Looking Ahead

It’s easy to feel overwhelmed about where to go next when considering business opportunities. If you want to jump-start your work on sustainability, consider expanding to a country that is ahead of the pack.

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